Beaucaire From Syria, joined Sep 2003, 5252 posts, RR: 24 Posted (6 years 7 months 4 days 1 hour ago) and read 6319 times:
UAL Corporation the holding company whose primary subsidiary is United Airlines, reported a third quarter net loss of $779 million or $252 million, if non-cash, net mark- to-market losses on fuel hedge contracts and certain accounting charges are excluded, despite an increase of $946 million in consolidated fuel expense..
In pre-wallstreet opening the share-price gained 4%.
The company said on Tuesday its third-quarter net loss amounted to $779 million, or $6.13 per share, compared with a profit of $334 million, or $2.21 per share, a year earlier. Excluding one-time items, the carrier said it lost $1.99 per share.
The carrier said its hedge-related losses amounted to $519 million, but noted that it saw a cash gain of $17 million on contracts that settled during the third quarter.
WorldTraveler From , joined Dec 1969, posts, RR:
Reply 2, posted (6 years 7 months 4 days ago) and read 6263 times:
these numbers are very bad. UA can blame it on fuel which is significant but their revenue performance is very weak. Despite pulling capacity on the Pacific, Latin, and domestic, they underperformed AA, CO, and DL which have already reported.
There will be a lot of blood shed in the 4th quarter by the network carriers because of overly aggressive hedges by all the network carriers- and perhaps some LFCs but UA alone seems unable to get traction on generating decent revenue.
It is hard to imagine they have a future as a standalone airline. They have the cash to weather the downturn but with several quarters of this kind of performance - with or without fuel issues - UA will be in a position where it will be back in C11 -which may be necessary for them to merge w/ anyone - or they will engage in an asset sale so the acquiring company has the ability to stop the flow of red ink which seems to be in the DNA of UAL.
AA1818 From Trinidad and Tobago, joined Feb 2006, 3462 posts, RR: 4
Reply 3, posted (6 years 7 months 4 days ago) and read 6243 times:
Usually one time items can be ignored which tend to make the results look rosy, but if UA is hedged at that high rate for more than just this quarter, then the mark to market losses on hedges cannot be ignored. Ouch UA! Let's hope with the low-ish oil price that all the US majors can turn things around.
“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
Charles79 From Puerto Rico, joined Mar 2007, 1334 posts, RR: 5
Reply 4, posted (6 years 7 months 4 days ago) and read 6240 times:
Grim news for one of my favorite carriers. I've always enjoyed good service and pleasant F/As at United, they have a strong workforce but I wonder how committed can they remain when these kind of results are announced. Anyone know how is their workforce morale, are employees loosing faith in the market? I've always known them to be fighters...
Beaucaire From Syria, joined Sep 2003, 5252 posts, RR: 24
Reply 5, posted (6 years 7 months 4 days ago) and read 6223 times:
I would imagine the United finance management has considered changing hedging at lower rates those last weeks-can't imagine them just sit idle and watch oil-rates sink without acting.
While I agree that the figures are bad,there are some signs of improvement in some areas ( Atlantic trafic,overal revenues,cash at hand..)
To those who anticipate they will just dissapear-that is the most unlikely scenario of all-they simply have to scale their business to the accessible market they have -which they do anyhow,since they lay off staff and reduce capacity;
Agree that that was one glaring point in the picture. UA only managed a 0.7% increase in Total Operating Revenues, which is quite paltry compared to increases at AA, CO, and DL of 8.0%, 8.8%, and 9.0% respectively during the same period.
Remember that now is also the time that airlines are showing double-digit increases from Other Revenues, primarily all those extra fees (bags, ticket changes, etc.) - AA, CO, and DL all showed hefty double-digit percentage increases in this area, whereas UA actually went the other way and dropped about 3.3%.
Ptugarin From United States of America, joined Sep 2006, 326 posts, RR: 0
Reply 9, posted (6 years 7 months 3 days 23 hours ago) and read 6057 times:
On a side note, as a frequent flyer who collects United miles, is it now a bad idea to keep "investing" in their miles or even if something happens to the airline, their miles will be honored by someone else?
Iloveboeing From United States of America, joined Oct 2005, 803 posts, RR: 0
Reply 12, posted (6 years 7 months 3 days 23 hours ago) and read 5867 times:
Quoting Beaucaire (Reply 17): Well at least the financial community seems to think they are not yet dead in the water,otherwise their shares would not move from 5$ six weeeks ago to nearly 14 $ this morning...
Maybe shareholders are hoping that UA will merge with CO and the Tilton gang will step down...
Mm320cap From United States of America, joined Jul 2004, 235 posts, RR: 3
Reply 14, posted (6 years 7 months 3 days 22 hours ago) and read 5776 times:
Quoting Ptugarin (Reply 9): On a side note, as a frequent flyer who collects United miles, is it now a bad idea to keep "investing" in their miles or even if something happens to the airline, their miles will be honored by someone else?
United is in one of the strongest cash positions in the industry. While I don't agree with the aggressiveness of their capacity cuts, they are in a good position financially. With almost $3 Billion in cash, $3 Billion in unencumbered assets, and access to capital in this difficult market, I would say your Mileage Plus miles are as safe at United as they could be with any airline. With an operating loss of $150 million in one of the toughest quarters in history, and cash reserves like they have, United (love them or hate them) is going to be around for a long, long time. Take a look at the stock price today.
PlateMan From United States of America, joined May 2007, 924 posts, RR: 0
Reply 16, posted (6 years 7 months 3 days 21 hours ago) and read 5555 times:
The numbers are actually better than expected in operating costs...
You all are quick to judge when you know nothing about financial results and instead take it out on your one bad experience with the airline...read the entire picture, look at the stock price and then you can see what really happened.
ConcordeBoy From , joined Dec 1969, posts, RR:
Reply 18, posted (6 years 7 months 3 days 21 hours ago) and read 5503 times:
Quoting Ptugarin (Reply 9): if something happens to the airline, their miles will be honored by someone else?
...depends on if anyone sees a compelling reason to assume that liability (i.e., a new customer base that they otherwise might not have acquired on their own). If not, they'd be more than happy to let it die.
FlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 19, posted (6 years 7 months 3 days 21 hours ago) and read 5464 times:
Quoting WorldTraveler (Reply 2): these numbers are very bad. UA can blame it on fuel which is significant but their revenue performance is very weak. Despite pulling capacity on the Pacific, Latin, and domestic, they underperformed AA, CO, and DL which have already reported.
I think that people in this forum need to be less influenced popular opinion on this board and more influenced by business sense and reality. I don't agree with Glenn Tilton, et. al., over at UA and their strategy, but their methods are financially effective.
Their loss was less than Wall Street expected, aside from fuel hedges, they aren't doing badly for the market.
UA is not being run like an airline aficionado's airline, it's being run like a financial manager's airline.
Quoting Mm320cap (Reply 15): United is in one of the strongest cash positions in the industry. While I don't agree with the aggressiveness of their capacity cuts, they are in a good position financially.
Their extreme cuts make good sense for a market in recession. They are trimming the old, expensive parts of the fleet. Their fleet is fairly new, decently outfitted, they have a good employee pool, terrific hubs, and amongst the most expansive route networks. What they are doing is cut the routes which aren't that profitable and focus on money making routes.
Ideally, I'd like to see UA like they were 10 years ago, when they were the biggest airline on earth, with flights all over the map, but the world and aviation industry is very different now. Even the mega airlines like AF/KL and the "merger of addition" DL/NW are trimming.
UA is doing fine. This forum should catch on to what Wall Street knows, UA is not going anywhere. We'll see Midwest, Frontier, US Airways drop before we see UA dropping.
UA, CO, AA, and DL are solvent.
"Let the world change you, and you can change the world"
WorldTraveler From , joined Dec 1969, posts, RR:
Reply 21, posted (6 years 7 months 3 days 21 hours ago) and read 5379 times:
Quoting Panamair (Reply 6): Remember that now is also the time that airlines are showing double-digit increases from Other Revenues, primarily all those extra fees (bags, ticket changes, etc.) - AA, CO, and DL all showed hefty double-digit percentage increases in this area, whereas UA actually went the other way and dropped about 3.3%.
and UA led the increases.
Quoting Charles79 (Reply 16): If they can charge $300 more than DL while they charge extra fees and cut costs then that's how you make a profit.
but they underperformed on an aggregate basis.
there are all kinds of personal reports that can be given but in the end the only thing that matters is what is reported to Wall Street.
United1 From United States of America, joined Oct 2003, 6437 posts, RR: 9
Reply 23, posted (6 years 7 months 3 days 20 hours ago) and read 5307 times:
Quoting WorldTraveler (Reply 23): Quoting FlyDreamliner (Reply 21):
they aren't doing badly for the market.
yes, they are. read above.... they underperformed on revenues. UA has the industry's best assets (hubs, routes a/c) yet they continue to underperform on revenues.
True they do have some of the best assets in the business, but that also means that they operate on some of the most highly contested routes in the industry and are subject to an incredible amount of competition across their network. Its no surprise that UAs takes a little longer to recover then some of their peers do.
As for missing on revenue UA came in on the high end of what Wall Street was expecting for revenue, how is that under performing?
As much as you continuously seem to want to believe that every airline is doing badly, save one, everyone is doing fairly well in this climate and FAR better then what was expected at the beginning of the year.
UA has some work to do and some challenges to overcome but no more then any of their peers int he industry do.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!