N777UA
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RE: UAL Loan Denied

Fri Jun 18, 2004 8:44 am

The article released on chicagotribune.com stated that the boards decision was based on their belief that United was capable of surviving bankruptcy without the loan guarantee....something that CEO Glenn Tilton stated a week or so ago.
 
InnocuousFox
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RE: UAL Loan Denied

Fri Jun 18, 2004 8:45 am

I can't blame them... it's a dangerous situation.
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
Guest

RE: UAL Loan Denied

Fri Jun 18, 2004 8:45 am

That would be good news then. If anyone is going to go, it should be US Airways first, not that I want to see any go.

[Edited 2004-06-18 01:46:29]
 
JBLUA320
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RE: UAL Loan Denied

Fri Jun 18, 2004 8:47 am

BoeingGoingGone,

You make it sound like there is a systematic process as to which airlines should go out of business first... care to elaborate?

JBLU
 
InnocuousFox
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RE: UAL Loan Denied

Fri Jun 18, 2004 8:53 am

"You make it sound like there is a systematic process as to which airlines should go out of business first... care to elaborate?"

Yeah, whoever is in the worst shape goes first. It's all very orderly.  Insane
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
Guest

RE: UAL Loan Denied

Fri Jun 18, 2004 8:53 am

I'd hate to see any airline go before US Airways which has been unhealthy for so long that I wouldn't touch them with a ten foot pole. I'd also add I wouldn't mind seeing one or two of the market sucking LCC's fall apart as well.

Anyone can suck the life out of a solid O&D market like JFK to LAX, but it takes a real airline to serve a small city, even if it's done at a loss. When JetBlue actually flies somewhere that involves risk I'll strip and run naked through the streets. I'm certain this will never happen, so don't have a heart attack. Unfortunately, the side effect is that the major carriers suffer. Don't give me the "it's competition" crap either.
 
aa777flyer
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RE: UAL Loan Denied

Fri Jun 18, 2004 8:58 am

Actually I see this as a GOOD thing for UAL. Since UAL will beable to restructure without the governments help, it is better to do it independantly without government getting their hands in on UAL's business.
The TSA was created to make the post office look efficient!
 
NIKV69
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:01 am

BoeingGoingGone,

I am with you, I would like to see US go first. UA seems to be able to survive, I hope they do I am flying them in three months!

As for LCC going it doesn't seem likely. Even though I would choose CO over WN or B6 the majority of people out there love them. They are here to stay.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
JBLUA320
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:02 am

I'd hate to see any airline go before US Airways which has been unhealthy for so long that I wouldn't touch them with a ten foot pole. I'd also add I wouldn't mind seeing one or two of the market sucking LCC's fall apart as well.

Im probably missing the point, BUT...

It is the nature of the game for airlines to rise and fall throughout time, and that the industry always semi-recovers (atleast) from a loss... but what is the method behind actually WANTING an airline (several in your case) to go under? It might help a legacy, but it still hurts people in the end.

If jobs are going to be lost, isn't it most fair for the jobs to come from the airline that can't pull through (regardless of how long they have been in trouble)? I guess it depends mostly on your management, but survival of the fittest should be in full effect. If that means kissing goodbye to a legacy, as much as it'd suck, what can you do about it?

I dont understand why USAirways should go out first simply because its been struggling the longest. Have they been milking the federal banks THAT much? I know I see this industry through largely inexperienced eyes, but if an airline has been in trouble for a year and goes under before an airline thats been struggling for ten, is it really "violating" the rules of the game, or is it merely unfair because your not getting your desired outcome?

Not trying to ruffle any feathers... just make sense of this in my head

JBLU




 
aviatortj
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:03 am

Well I will be sure to continue to help out by flying them as often as I can. In all of the times I have flown them, they continue to amaze me with their excellence in service. Good luck UAL.
 
Guest

RE: UAL Loan Denied

Fri Jun 18, 2004 9:05 am

If US goes, 34 million people shift to the other carriers making them all more than viable due to the new increased demand. UAL also has a much better route structure and fewer people (general public) are affected. I look at it from the standpoint of how it will affect the industry. USAirways, bad for employees, good for the industry. UAL bad for both.
 
JBLUA320
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:06 am

Fair enough  Smile

JBLU
 
NIKV69
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:06 am

Yes I have to agree, all my flights with UAL have been great, good service and on time! Clean planes as well. I think they will survive.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
Blackbird1331
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:07 am

You mean, Darwin rules. Business, just business.
Cameras shoot pictures. Guns shoot people. They have the guns.
 
Guest

RE: UAL Loan Denied

Fri Jun 18, 2004 9:10 am

Who's the hell is Darwin?  Smile/happy/getting dizzy
 
InnocuousFox
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:15 am

"Who's the hell is Darwin?"

It's fascinating to see how this thread has evolved.
Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
 
deltaffindfw
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:16 am


Charles Darwin

Survival of the fittest...
 
PDPsol
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:21 am

As with all firms under Chapter 11 protection of the United States Bankruptcy Code, UA is operated under an 'Estate' which represents the interests of all its creditors. If UA's managers can convince its Creditors Committee and the bankruptcy judge overseeing its case it has a CREDIBLE plan to operate profitably and offer creditors SOME return, UA would be able to emerge from bankruptcy. Of course, its shareholders will never, ever see anything...

Unfortunately, UA has NO credible plan to operate profitably. Its creditors would most likely be thrilled to accept a less-than 50 cent return on their claims. The problem lies in UA's inability operate under ANY scenario, even if ALL its creditors were wiped out.

Airlines do not possess liquid assets; their 'strategic' value cannot be easily transferred to others and their hard assets may not be worth much in today's environment.

So... the Air Transport Supervisory Board made the RIGHT decision by refusing to offer loan guarantees to UA.
 
PDPsol
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:25 am

I should caveat my last post with:

UA cannot operate profitably under any scenario, given its current cost structure.

Of course if UA were to implement policies to radically reduce its cost structure, then it would be able to operate profitably. However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require.
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:32 am

I agree with some of the others in saying that ultimately this could be a good thing for UAL. This means if they want to survive,k they need to make the unpopular cuts, and get it done. I believe that it is possible for them to do this, and ultimately think that it is the rght decision.

J
 
United1
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:34 am

I wouldn't count United out quite yet This was plan A, United going away is plan Q we're now on B. In other words we have a long way to go before UA going under becomes a reality. Remember UA was turned down because the feds feel that United can survive without a loan not because the situation is hopeless.

This is not a bad thing actually this could turn out to be a very good thing. Accepting a loan guarantee from the government would have put many restrictions on United and prevented it from expanding for years. And as we all know no airline has ever shrunk itself to profitability. This probably means that an equity investor will have to step forward/be found and life will go on.

Should be interesting to see what Plan B is if nothing else... Smile

later
Chuck
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
FLY777UAL
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:43 am

"However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require."

...and those employees as well as the working conditions would be which ones, exactly? As I can remember, all of the employee groups gave up quite a bit salary and working condition-wise in order to help the company succeed...

F L Y 7 7 7 U A L
 
United1
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:45 am

PdPsol wrote:
"However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require"

Where do you get that idea from? UA's current Union contracts (all of which were negotiated in BK) were all reached consenualy. No one had a contract forced upon them in court and based on what I hear coming out of WHQ most of the employees seem rather optimistic even happy the direction that things are going.

Chuck


[Edited 2004-06-18 02:48:28]
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 9:50 am

here do you get that idea from UA's current Union contracts (all of which were negotiated in BK) were all reached consenualy. No one had a contract forced upon them in court
***

Tell that to the union group that refused the companies offer and thus forced the company into Chapt 11 in the first place.

Now, the writing is on the wall, and if they want to keep their jobs, they will have to take the cuts that are offered, or they will be maning the shake machine at McDonalds.

I think they'll get it done

J
 
FLY777UAL
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:01 am

Artsyman:

"Tell that to the union group that refused the companies offer and thus forced the company into Chapt 11 in the first place."

...now would that be the same union group which later reached and signed new salary and work rules?

The writing has been on the wall for quite some time, and each group has been more than willing (since BK) to step up to the plate in order to save their jobs. You talk about them as if they are just plain stupid and ignorant to the fact that the company needed them to make the appropriate cost reductions.

F L Y 7 7 7 U A L
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:07 am

You talk about them as if they are just plain stupid and ignorant to the fact that the company needed them to make the appropriate cost reductions.
***

Not at all, I was just referring to the poster above that implied that the workers were not responsible for any of this and all agreed to everything that was asked of them. Many of us remember "Highest paid until the last day" type mentality, and the complete refusal to give an inch for most of the last few years.

While they eventually caved in, there was a lot of hassle along the way, not the easy cake walk that the poster above tried to imply. If you read my posts, they are fairly pro UAL survival.

I think the fact that despite losing millions per day, UAL continues to give free drinks, free headphones and all the rest showed that they were not willing to make the serious cuts required.

Now, UAL will be forced to get a grip on reality, and I think it could be a wonderful thing for them, but if they continue to insist on being everyones best friend, flying to everywhere, giving free booze and free headphones etc, they will go the way of the dodo bird.

J

[Edited 2004-06-18 03:10:28]
 
United1
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:12 am

Artsyman:

The Mechanics Union voting down the contract didn't send UA into BK. BK was virtually a foregone conclusion whether or not that contract had been accepted by the members.

Chuck


I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:18 am

Chuck, You could be right, but the common perception from the media and from the industry in general, was that that decision was the final straw that forced the issue. I agree with you that the writing was on the wall.

J
 
FLY777UAL
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:29 am

Okay...now I see! Sorry about that!

Just wondering, though, from your point of view--do you really feel that the headphones and liquor on international flights will make that much of a cost difference?

Internationally especially, the free liquor has become something that UA not only needs to be somewhat competitve with foreign airlines, but also something that frequent flyers have come to expect. A 100K flyer would be mortified (first of all if he didn't get his upgrade!) if he was expected to pay $5 for a drink being stuck in Economy. The headphones go along with United's "gate to gate" marketing plans, and the royalties from the movies shown aren't really that much at all for UA to pay. As I see it, the liquor and headsets are quite a negligable cost for the product enhancement which it offers...

F L Y 7 7 7 U A L
 
United1
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RE: UAL Loan Denied

Fri Jun 18, 2004 10:30 am

Artysman:
I'll give you one thing the mechanics Union can be very intense/stubborn sometimes it seems to there own detriment. I never could quite figure out why they are like this either my dad was a Mechanic for United for 30 years and I remember him always being stressed out during contract negotiations because it was completely unpredictable of how they were going to vote.

Chuck
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
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airzim
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RE: UAL Loan Denied

Fri Jun 18, 2004 11:42 am

United1,

And as we all know no airline has ever shrunk itself to profitability.

Can you say Continental?
 
NWAFA
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RE: UAL Loan Denied

Fri Jun 18, 2004 11:52 am

UAL did NOT deserve the Loan. It is now time for them to act like every other company and be responsible! It makes me nervous as my sister is a FA with them!

THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
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STT757
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:26 pm

"And as we all know no airline has ever shrunk itself to profitability"

I'll strongly disagree with that statement, I'll use the most successful Corporate turn around (probably ever) with CO.

When they entered bankruptcy in the early 1990s they were flying DC-10s and 747s to Sydney, Auckland, Melbourne, Brisbane, Cairns.

Flying 747s from SEA-Tokyo

They had a major hub in Denver

They purchased Eastern's LGA slots and were operating a mini hub there.

They were expanding their A300 fleet.

CO turned around because Gordon Bethune went in there with Greg Breneman and Larry Kellher and cleaned house.

They shut down the flights to Australia and New Zealand, sold the SEA-Tokyo flight, closed the Denver hub, shut down the CAL Lite airline and started to retire the A300 fleet and standardize around Boeings.

It worked brilliantly for them, this whole notion of UAL going through this process and coming out virtually the same airline is nonsense. They need to shrink the airline to something that is not only more manageable, but more profitable.

It's obvious the way they are set up now will not work, they need to rationalize their operation.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
cx123
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:34 pm

Don't know why CO is shutting doen the AUS routes??? It is the most profitable route now.
 
ramerinianair
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:35 pm

Boeinggoinggone,
I just read your post and all I can say is AMEN TO THAT!!!!!


-S.R.
W N = my Worst Nightmare!!!!!
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:40 pm

from your point of view--do you really feel that the headphones and liquor on international flights will make that much of a cost difference?
***

Those items alone obviously cannot save United, but they are symbolic of general UAL policy of trying to be everything to everyone. They fly everywhere, often, and basically have an utterly fantastic route network, but much of their network is not efficient, and much of it is losing money.

United will now be forced to cut what doesn't make them money, and focus on the things that do make them money. I can also understand that their image maybe slightly tarnished from the changes, and they will certainly let some people down, but who cares, what's more important... if you keep flying to please everyone, then you will eventually let all of them down in Chapt 7, so why not just make the cuts, get healthy and get on with it.

J
 
N79969
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:56 pm

If it doesn't kill you, it just makes you stronger. As a UAL quasi-partisan, I am glad that UA did not get this loan guarantee out of a kind of tough love that I feel for them. They are a great company in many ways.

I do not believe that UA should get a leg up on its competition in the US or overseas. If United exits bankruptcy (which I think it ultimately will) intact and independently it will emerge stronger, financially and in terms of moral morale, than it would have had it received a loan guarantee.

This is the kick in the pants that is going to push United and its employees to excel...or so I hope.
 
United Airline
Posts: 8766
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RE: UAL Loan Denied

Fri Jun 18, 2004 12:58 pm

SO MEAN AND SO UNFAIR!!!!!! US AIRWAYS GOT IT and why not United Airlines????

Is it a MUST that they have to further downsize or do further cuts?
 
Alpha 1
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RE: UAL Loan Denied

Fri Jun 18, 2004 1:02 pm

Actually I see this as a GOOD thing for UAL. Since UAL will beable to restructure without the governments help..

Say that again? They haven't even turned in a business plan, waiting for this bailout, and you tell us that it's somehow good for UA? And if that's the case, why does UA sound so perplexed in not getting the loan?

I agree with some of the others in saying that ultimately this could be a good thing for UAL. This means if they want to survive,k they need to make the unpopular cuts, and get it done.

No wonder you're on my RR, Artsyman.  Smile Well said, and you hit the nail squarely on the head with that one. Maybe this wakes them up to make the tough decisions.

Should be interesting to see what Plan B is if nothing else...

I don't think they even have considered a Plan B, while waiting for the government money.

Don't know why CO is shutting doen the AUS routes??? It is the most profitable route now.

Oz was never profitable for CO. Never.
 
StevenUhl777
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RE: UAL Loan Denied

Fri Jun 18, 2004 1:28 pm

“A majority of the board believes that the likelihood of United succeeding without a loan guarantee is sufficiently high so as to make a loan guarantee unnecessary,” the board statement said.

The quote above was taken from an MSNBC article on the denial of the loan.

Think about that statement for just a minute...what the ATSB is saying in not so many words is that UAL has done a good enough job restructuring on its own, management convinced them UA is a viable carrier on the rebound, and will succeed. So, from the board's perspective, why give out $1.6B for nothing? And on top of that, analysts and JP Morgan were so confident in what management presented to the ATSB that they backed it up with another round of financing for UAL of approximately the same amount! Again, if UAL is doing so well, and can secure money from JP Morgan, why the need for 'guvmnt' cheese?

And anyone who has read the fine print (i.e. the 'strings attached') to this ATSB loan, it's the kiss of death. I just can't believe that management was so ADAMANT about pursuing it.

I'll bet a latte that Tilton and Brace go to JP and negotiate a financing package. In turn, JP gets a few people on the new reeemerged UAL board, as well as a fair amount of input in future strategizing.

Just my .02.



And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
wgw2707
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RE: UAL Loan Denied

Fri Jun 18, 2004 1:33 pm

I think it's probable that Cx123 was referring to Continental Micronesia, which historically has been one of the more valuable assets for CO. The unprofitable non-stops from the US were of course discontinued (that market can barely support UA and QF) but Continental continues to serve Australia, flying to Cairns from the Guam hub. It's almost surrealistic to think of Continental and Northwest operating the way they do in Asia...

United should be alright I think, if the ATSB had said United did not present a viable business plan (which if I recall was what they said regarding Vanguard, Midway and National) then there would be greater cause for alarm.

-WGW2707
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 1:49 pm

what the ATSB is saying in not so many words is that UAL has done a good enough job restructuring on its own, management convinced them UA is a viable carrier on the rebound, and will succeed. So, from the board's perspective, why give out $1.6B for nothing?
***

This is a stretch of the facts, what they were actually saying is that UAL has it within their power to fix themselves if they choose to, and therefore should not be given the loan protection.

Things are not good at UAL, yes they have improved no end, they have done plenty, but face it, even after all that, and even while still not paying all their bills, they still lost 459 million dollars (over 5 million per day) in the first quarter of this year.

While this second quarter will be better, it will still not make them money, and most of the improvement from the second quarter is down to the second quarter being a busier quarter, not down to UAL changes. I am sure that there will be days when UAL will make money this year, but the financial health of the carrier is based on the entire year.

At the end of this year, no matter how you slice it, UAL will still have lost about a billion dollars and probably more, and this just cannot be dismissed away as irrelevent, and it cannot be ignored by those making comments like "Hence UAL has done a outstanding job of reinventing itself and lowering costs to effectively compete with LCC.

When the employees and the company as a whole admit to themselves that things are not good, and start cutting into the dead wood, they will be fine, but they need the guts to do it and make it happen before it is too late.
 
artsyman
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RE: UAL Loan Denied

Fri Jun 18, 2004 1:55 pm

I'll bet a latte that Tilton and Brace go to JP and negotiate a financing package
****

Steven, I'll take your bet. I say that none of those financial institutions will touch UAL with a hundred foot pole without the guarantee's from the government.

I feel good with this bet, either I win a latte, or I get the pleasure of knowing you guys keep your jobs... make it happen
 
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mariner
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RE: UAL Loan Denied

Fri Jun 18, 2004 2:17 pm

Steven:

But why are they going back to the ATSB?:

http://biz.yahoo.com/rc/040617/airlines_united_statement_1.html

"We do not believe that the Board was made aware of the important modifications United was willing to bring to the table."

Tilton and Brace spent most of Wednesday with the ATSB, so why didn't they make the Board aware?

cheers

mariner
aeternum nauta
 
N79969
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RE: UAL Loan Denied

Fri Jun 18, 2004 2:18 pm

" Think about that statement for just a minute...what the ATSB is saying in not so many words is that UAL has done a good enough job restructuring on its own, management convinced them UA is a viable carrier on the rebound, and will succeed. "

If you think about the statement for 1 minute and 1 second you will realize that they worded this statement to cover their ass in an election year in case UA folds--pure and simple. Illinois and California have a lot of electoral votes. If a loan guarantee were as low risk as you make it sound then a) UA would not need a government guarantee or b) the government would not hesitate to take it as the contingent liability would be approximately zero.

There is no denying that the employees of United Airlines have made big sacrifices and sincere efforts to help their company but it does not logically follow that it was "good enough" to save the airline in the long run.
 
StevenUhl777
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RE: UAL Loan Denied

Fri Jun 18, 2004 2:29 pm

they worded this statement to cover their ass in an election year in case UA folds--pure and simple. Illinois and California have a lot of electoral votes.

Maybe so...but the board was appointed by a Republican administration, and the chances that Bush will win CA or IL are slim and none. So, I don't think this decision has anything to do with politics. I wonder how much pressure Reps. Henry Hide and Dennis Hastert exerted over this issue, same as the California congressional delegation. Sure as hell not Gov. Ahhhhnold...he's already in Branson's pocket. Whether UA folds or not, it won't make a difference in the election in either state...Kerry is WAY ahead in both.

Maybe it's late, but I guess I don't see your point.
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
UAFAN17
Posts: 114
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RE: UAL Loan Denied

Fri Jun 18, 2004 2:39 pm

I just hope that UA does whats necesary to survive otherwise im stuck flying ATA to Aruba.  Crying
 
ual777
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RE: UAL Loan Denied

Fri Jun 18, 2004 2:43 pm

UA is a viable airline. They even stated they made a "small profit" in May. They also stated that fuel prices are 700 million dollars over their estimate. I personally think that Citigroup and JP will stick it through with them. UA is a viable airline, they have just been hit harder since 9/11 (due to SARS and the pacific, and no fuel hedges) than other carriers.
It is always darkest before the sun comes up.
 
artsyman
Posts: 4516
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RE: UAL Loan Denied

Fri Jun 18, 2004 3:00 pm

UA is a viable airline, they have just been hit harder since 9/11 (due to SARS and the pacific, and no fuel hedges) than other carriers.
***

UAL were losing millions per day long before 9.11, and secondly they did not make a proper profit in May, they still lost money hand over fist. They did report that if Fuel costs were lower (which they're not), and if this happened and that happened etc, that they would have made money. Making a profit of 38 cents in the summer months (assuming the fact that this is possible for them) does not mean much when they lose 5 million plus per day for the rest of the year.

Listen up, and listen clear. UAL employees on this board continue to suggest (as they have done for the last 2 years) that everything is fixed, that they are a healthy carrier, that Tilton says they don't need a loan, that they really making money (despite losing 459 million), that the atsb thinks that UAL is so great, and so healthy that they don't need any loans and lastly my favourite from today... which I quote "Hence UAL has done a outstanding job of reinventing itself and lowering costs to effectively compete with LCC

All the while UAL continues to lose fortunes and continues to change very little when truth is, if they made the relevent changes, and stop trying to pretend everything is ok, they could be ok.

I want them to be ok, and in truth I wanted to stay out of these threads, but I just cannot let comments like today's humdinger go by....

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