hoya
Posts: 452
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UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 7:53 am

Four major lenders - JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank A.G. and General Electric Capital Corp. - will provide UA with $3 billion in exit loans. This is more than what UA was hoping for, which was roughly $2.5 billion. Looks like these lenders think UA's business plan may actually work.

Also, UA posted a $113 million operating profit in July, and finished July with $2.8 billion in cash. Looks like UA is on the slow path to recovery. More here:

http://chicagobusiness.com/cgi-bin/news.pl?id=17564
Hoya Saxa!!
 
flypdx
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 7:55 am

Good news for UA! I hope my favorite airline can make it through!
 
AirRyan
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 7:56 am

Wow, that's outstanding - that's more of an operating profit in one month than they have turned in an entire quarter for a long time! Hopefully it will be nothing but good times for them in the future!
 
Airbuff
Posts: 136
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:07 am

I certainly do wish them nothing but good things.
Where am I going, and why am I in this handbasket?
 
aerohottie
Posts: 702
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:15 am

Excellent results considering the price of fuel at the moment.
Hopefullt this is the end of UA troubles.
What?
 
exFATboy
Posts: 1887
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:19 am

At the risk of sounding pessimistic, the debt burden that UA will operate under with this financing concerns me...a case can be made for trying to seek equity financing instead.

However, just the fact that they have the financing in place - and not only turned an operating profit in July but would have turned a profit overall if not for reorganization costs, is good news for UA.
 
whitehatter
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:20 am

Quoting Hoya (Thread starter):
. Looks like these lenders think UA's business plan may actually work.

It's probably more a case of them protecting their existing position with UA. If the lenders can see a clear strategy then they can be persuaded to go 'double or quits', or something along those lines anyway!

They will want to try and get their original pre-bankruptcy money back (or some of it at least depending on how much they have discounted those debts) so would look favourably on United and advance them some more. That way UA can trade itself out of trouble.

They certainly won't be doing it of they have any major doubts, so it does look good for UA's future. And good luck to them all, especially the workers who have had to suck it up and give back plenty to see UA come through this in one piece.
Lead me not into temptation, I can find my own way there...
 
AMSSpotter
Posts: 263
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:24 am

Great news for United, the airline many people thought was doomed.
I wish United all the luck, I've always had good experiences with them!
 
unitedgirlie
Posts: 96
Joined: Thu Aug 11, 2005 6:49 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 8:34 am

lets hope they can afford us new uniforms now

not that I am shallow or anything

much!
 
cslusarc
Posts: 553
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 9:23 am

It doesn't sound good that UA will emerge with $3 Billion of DEBT financing and $0 of EQUITY financing.

I think UA NEEDS to raise an equal $3 Billion in EQUITY financing. I don't know any inverstor who would rationally invest in a loss making enterprise with little hope of recovery.
--cslusarc from YWG
 
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OzarkD9S
Posts: 4723
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 9:24 am

$1 billion for each year in BK. Not bad.

If they had stayed in for a fourth year would they have gotten $4 billion?

Best of luck to UA and the employees.
Next up: STL-OAK-RNO-LAS-ICT-STL
 
legacytravel
Posts: 385
Joined: Sat Aug 20, 2005 2:05 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 9:59 am

To the best damn airline out there congratulations. And to every one of the most professional and courteous employees of UAL who have had to suffer through this. Congratulations. I look forward to booking all my clients on UAL for years to come and I will see you in Oct for a family trip.
Mark in MKE
I love the smell of Jet fuel in the Morning
 
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yyz717
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 10:20 am

Quoting Cslusarc (Reply 9):
It doesn't sound good that UA will emerge with $3 Billion of DEBT financing and $0 of EQUITY financing.

I agree completely. I have not been following the UA Chap 11 shenanigans too closely (Canada has its own bankrupt STAR alliance carrier for entertainment) but I presume this debt equity is from major creditors who really have no choice but to play ball.

With the same incompetent mgmt and militant work force in place, the future does not look bright for UA, even without this proposed debt load.

United.....sinking?
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
galapagapop
Posts: 861
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 10:56 am

I think everyone and their Grandma made a operational profit this past July(except DH, as this is A net), so that shouldn't be the focal reason as to why they'd get these loans (at least I hope not). But the challenge will be them making a net profit and keeping an operational profit during the winter months. Not to mention them getting that cost structure reorganized and hopefully spend 1.5B for fuel hedgingBut its finally good to see them on their way and without government handouts.
 
aerobalance
Posts: 4308
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:43 am

Go UA!

It must be the new paintjob.....
"Sing a song, play guitar, make it snappy..."
 
FriendlySkies
Posts: 3540
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:52 am

Surprised nobody has said it...Airbus isn't listed as one of the lendors...bye bye A380/A350 rumors!

EDIT: Yes I know this isn't final but I still believe those rumors are pretty much dead.

Also note UA would have made a $76 mil NET profit last month if it weren't for reorganization expenses.

[Edited 2005-08-26 04:57:58]
 
galapagapop
Posts: 861
Joined: Sat Feb 26, 2005 2:15 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 12:12 pm

Quoting FriendlySkies (Reply 15):
Also note UA would have made a $76 mil NET profit last month if it weren't for reorganization expenses.

DH almost made a profit last month if you exclude fuel costs......
Almost is not in the black.
 
ual777
Posts: 1491
Joined: Thu Aug 14, 2003 6:18 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 2:17 pm

Quoting Yyz717 (Reply 12):
With the same incompetent mgmt and militant work force in place, the future does not look bright for UA, even without this proposed debt load.

Yyz717 this is an extremely ignorant statement that is totally wrong. If management is SO incompetent, then why are they exiting bankruptcy intact? UA did not sell their Heathrow slots, Pacific rights, or close any hubs. They went in as the number 2 US carrier and are emerging as the number 2 carrier.

In addition how are the work groups "militant"? Oh I forgot how all three work groups went on strike last year forcing UA into Chap. 7.....  Wow!

Please post something relevent and at least remotly based on fact before you post something so ignorant and insulting to the thousands of UA employees who have made enormous strides and sacrifices for United.

Quoting Galapagapop (Reply 13):
I think everyone and their Grandma made a operational profit this past July

Um, wrong. DL is burning through 2 million dollars a day. DH didn't. US and NW still have to report, so I don't think this qualifies as "everyone and their grandma".

Furthermore. There is a HUGE difference between UA and DH. UA made an operational profit INCLUDING fuel DH did not; and while I normally live by the "almost only counts in hand grenades and nuclear weapons" philosophy, only a blind man would not see the difference between the two carriers.

In closing, I would dare say UA is almost or is as strong as CO and AA and due to the termination of the pension plan, will have a lower debt load than AA and possibly CO when they emerge this winter.

Good work UA leaders, employees, and family. We're ready to rock and roll again!
It is always darkest before the sun comes up.
 
PyroGX41487
Posts: 246
Joined: Sun Oct 31, 2004 3:06 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 3:09 pm

This great, great news! I hope that this stops the UA-bashers for the time being... Big grin
 
uadc8contrail
Posts: 1636
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 3:21 pm

I agree completely. I have not been following the UA Chap 11 shenanigans too closely (Canada has its own bankrupt STAR alliance carrier for entertainment) but I presume this debt equity is from major creditors who really have no choice but to play ball.

With the same incompetent mgmt and militant work force in place, the future does not look bright for UA, even without this proposed debt load.

United.....sinking?


YYZ717--will you post the same dribble that has been spewing out of you when your beloved red tail files ch11 or when the great southern airline files???and stays in bk court as long as ual?????of course not...
bus driver.......move that bus:)
 
gigneil
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Joined: Fri Nov 08, 2002 10:25 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 3:43 pm

Quoting Uadc8contrail (Reply 19):
Canada has its own bankrupt STAR alliance carrier for entertainment)

No it doesn't.

N
 
uadc8contrail
Posts: 1636
Joined: Thu Sep 11, 2003 1:23 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 3:51 pm

neil,
the above quote is from from our neighbor to the north that doesnt have a clue that the maple leaf tail has actually exited bk a while ago......
bus driver.......move that bus:)
 
uadc8contrail
Posts: 1636
Joined: Thu Sep 11, 2003 1:23 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 6:05 pm

It doesn't sound good that UA will emerge with $3 Billion of DEBT financing and $0 of EQUITY financing.

I think UA NEEDS to raise an equal $3 Billion in EQUITY financing. I don't know any inverstor who would rationally invest in a loss making enterprise with little hope of recovery.



--cslusarc from YWG



CSLUSARC,
im not a betting man BUT.....I would rather have ual in 3 bln $$$$ worth of debt than deltas 20+bln dollars worth of debt................
bus driver.......move that bus:)
 
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yyz717
Posts: 15689
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 9:43 pm

Quoting UAL777 (Reply 17):
Quoting Yyz717 (Reply 12):
With the same incompetent mgmt and militant work force in place, the future does not look bright for UA, even without this proposed debt load.

Yyz717 this is an extremely ignorant statement that is totally wrong. If management is SO incompetent, then why are they exiting bankruptcy intact? UA did not sell their Heathrow slots, Pacific rights, or close any hubs. They went in as the number 2 US carrier and are emerging as the number 2 carrier.

In addition how are the work groups "militant"? Oh I forgot how all three work groups went on strike last year forcing UA into Chap. 7.....

If mgmt were competent, UA would be profitable. But UA is bankrupt.

If UA unions were not militant, then UA unit costs would be higher. But they aren't.

The future remains bleak with the same failed people running the airline (mgmt and staff).

Quoting Uadc8contrail (Reply 21):
neil,
the above quote is from from our neighbor to the north that doesnt have a clue that the maple leaf tail has actually exited bk a while ago......

I used the wrong tense and typed "has" instead of "had". My bad. Let's not divert attention from the current incompetence at UA. This is a thread about UA problems, not AC semantics.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
777boi
Posts: 120
Joined: Thu Jan 20, 2005 8:22 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 9:53 pm

All the best to UA... have always had good experiences with them.. hope there is many more to come!
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 10:17 pm

Quoting Yyz717 (Reply 23):
The future remains bleak with the same failed people running the airline (mgmt and staff).

You really sicken me. All you do in UA threads is talk about how failed and useless the employees are. Are you trying to tell me it's the EMPLOYEES fault that the company is in bankruptcy? Here's a little advice: if you don't know anything about the situation, DON'T POST ABOUT IT! If it weren't for those "useless" and "failed" people going out to work everyday while their pay is cut, benefits are dissolved, and retirement erradicated, United wouldn't exist. Because those same "failed people" still go to work with a smile on their face and are giving the best damn service they have in years.

And btw, most of the management team that put UA in bankruptcy doesn't work for UA anymore.
 
tockeyhockey
Posts: 880
Joined: Fri Feb 04, 2005 10:57 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:10 pm

what are the chances that some of that exit funding goes toward an order of some brand new 787s?!
 
ual777
Posts: 1491
Joined: Thu Aug 14, 2003 6:18 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:27 pm

Quoting Yyz717 (Reply 23):
If mgmt were competent, UA would be profitable. But UA is bankrupt.

If UA unions were not militant, then UA unit costs would be higher. But they aren't.

What part of operational profit do you not understand? Excluding bankruptcy charges they WERE profitable. Read!

As to your second sentance, you state that if the unions were NOT militant then costs would be HIGHER? Explain. Either I'm not in tune with some new economic philosopy or you are not making any sense. Please back up what you say with fact.
It is always darkest before the sun comes up.
 
RAMPRAT980
Posts: 584
Joined: Sun Mar 13, 2005 1:06 am

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:38 pm

So the first three billion dollars in profit, they make, goes to the creditors to pay off the loan. That sounds like a whole lot of money to me.

Good luck UAL
With gun control there can be no democracy.. With gun control there can be no Freedom
 
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garpd
Posts: 2308
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RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:42 pm

This is great news.

I just hope UA managment can get it right. Perhaps they should hire Bethune!
arpdesign.wordpress.com
 
UA744Flagship
Posts: 1433
Joined: Tue Jul 13, 1999 1:55 pm

RE: UA To Get $3 Billion In Exit Financing!

Fri Aug 26, 2005 11:55 pm

Quoting UAL777 (Reply 27):

What part of operational profit do you not understand? Excluding bankruptcy charges they WERE profitable. Read!

As to your second sentance, you state that if the unions were NOT militant then costs would be HIGHER? Explain. Either I'm not in tune with some new economic philosopy or you are not making any sense. Please back up what you say with fact.

UAL777, thanks for keeping the idiots in check.

I was outraged at these inane comments as well...

Welcome to my RU list!
no wire hangers!
 
galapagapop
Posts: 861
Joined: Sat Feb 26, 2005 2:15 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:04 am

Quoting UAL777 (Reply 17):
Um, wrong. DL is burning through 2 million dollars a day. DH didn't. US and NW still have to report, so I don't think this qualifies as "everyone and their grandma".

Furthermore. There is a HUGE difference between UA and DH. UA made an operational profit INCLUDING fuel DH did not; and while I normally live by the "almost only counts in hand grenades and nuclear weapons" philosophy, only a blind man would not see the difference between the two carriers.

In closing, I would dare say UA is almost or is as strong as CO and AA and due to the termination of the pension plan, will have a lower debt load than AA and possibly CO when they emerge this winter.

No UA is not even close to AA's and CO's level they just turned an operational profit (good work still) but its been 3+ years and they still are climbing into debt. They probably will not make a profit any Quarter this year and possibly next so it will be 4 years of losses. AA and CO run a tight shift and did not do so with the help of an admiring judge who allowed pensions to be dumped, leases to be reduced, and collectors kept at bay. And even after some very big help from CH11 they still can't turn an overall profit, even though an operational profit is a very good start. AA and CO would be turning in major profits if they had that treatment especially no pensions. So no UA is not as strong nor anywhere close for that matter. But no doubt last month was some fresh air for the stale old carrier.

[Edited 2005-08-26 17:09:25]
 
TPASXM787
Posts: 1667
Joined: Tue Mar 29, 2005 6:31 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:05 am

Whew...coming out of bk with another $3bln in debt...best of luck to UA...I hope they make it...
This is the Last Stop.
 
ual777
Posts: 1491
Joined: Thu Aug 14, 2003 6:18 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:18 am

Quoting Galapagapop (Reply 31):
AA and CO run a tight shift and did not do so with the help of an admiring judge who allowed pensions to be dumped, leases to be reduced, and collectors kept at bay. And even after some very big help from CH11 they still can't turn an overall profit, even though an operational profit is a very good start. AA and CO would be turning in major profits if they had that treatment especially no pensions. So no UA is not as strong nor anywhere close for that matter. But no doubt last month was some fresh air for the stal old carrier.

This is where I disagree: When I say almost or as strong, I am talking operationally. Yes pensions were dumped, that I not being debated at all. However, I am only asking you to look at the financial report. Bankruptcy is a VERY expensive process. If I'm not mistaken, UA is giving tax lawyers something around 10-12 million dollars a month.

Again I will state UA has less debt than most of the other majors since they dumped their pensions. Its heart-wrenching for the employees, but it gives UA an enourmous amount of breathing room and allows them to take on exit financing. Every carrier has their own way to become profitable and while UA's is not by any means "employee friendly" it had to be done. Drastic times call for drastic measures and Tilton did what he had to do. In business today the old saying "The end justified the means" applies here (and de-frauding investors doesn't count). UA has done and is doing what it needs to do to become profitable.

Finally, they are not "stale". They were the first to get the 777. They adapted to the market with Ted and with P.S. While undeniably Ted is barely above break-even right now, P.S. is a smashing success. The business travelers are flocking to P.S. right now and I can say with certainty that the First class and Business loads are VERY good. Very very good.

While I respect your opinion, this is not the same UA that was seen in 2000. In a year or two all here will see.
It is always darkest before the sun comes up.
 
LJ
Posts: 4103
Joined: Wed Nov 17, 1999 8:28 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:26 am

Quoting RAMPRAT980 (Reply 28):
So the first three billion dollars in profit, they make, goes to the creditors to pay off the loan. That sounds like a whole lot of money to me.

It's more like 3 billion + a very high interst rate charge every year + a very big fee for the arrangers upfront so that they recoup their losses even if UAL goes down the drain.

Quoting WhiteHatter (Reply 6):
It's probably more a case of them protecting their existing position with UA. If the lenders can see a clear strategy then they can be persuaded to go 'double or quits', or something along those lines anyway!

I agree, moreover as UAL probably has to pledge some collateral for these loans. One can usually earn more from an almost dead company than from a company which doesn't have financial problems.
 
United Airline
Posts: 8766
Joined: Wed Jan 10, 2001 5:24 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:31 am

Hope UA will return to pre 2000 level in terms of size and profit one day....
 
1MillionFlyer
Posts: 1937
Joined: Wed Sep 08, 2004 8:55 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:59 am

Quoting Cslusarc (Reply 9):
I think UA NEEDS to raise an equal $3 Billion in EQUITY financing. I don't know any inverstor who would rationally invest in a loss making enterprise with little hope of recovery.

cluelessness rules on A.Net! this is the same guy that asked this gem of an idiotic question:
Should AC Buy DL's 21 Boeing 767-432ERs? (by Cslusarc Aug 24 2005 in Civil Aviation)

why should anyone think you know what you are talking about?

Quoting Yyz717 (Reply 12):
With the same incompetent mgmt

Let me guess you can solve all the problems singlehandedly ! Have you ever been in airline management?

Quoting RAMPRAT980 (Reply 28):
So the first three billion dollars in profit, they make, goes to the creditors to pay off the loan. That sounds like a whole lot of money to me.

wrong, have you heard of Term loans? the loans will not be "pay back as soon as possible"

Quoting LJ (Reply 34):
I agree, moreover as UAL probably has to pledge some collateral for these loans. One can usually earn more from an almost dead company than from a company which doesn't have financial problems

these banks already have these assets, they are releveraging the loans and changing the terms.
Golf Foxtrot you are cleared for departure
 
galapagapop
Posts: 861
Joined: Sat Feb 26, 2005 2:15 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 1:54 am

Quoting UAL777 (Reply 33):
While I respect your opinion, this is not the same UA that was seen in 2000. In a year or two all here will see.

They assumed 3 billion in debt, so obviously its not the same UA

Quoting UAL777 (Reply 33):
This is where I disagree: When I say almost or as strong, I am talking operationally. Yes pensions were dumped, that I not being debated at all. However, I am only asking you to look at the financial report. Bankruptcy is a VERY expensive process. If I'm not mistaken, UA is giving tax lawyers something around 10-12 million dollars a month.

Again I will state UA has less debt than most of the other majors since they dumped their pensions. Its heart-wrenching for the employees, but it gives UA an enourmous amount of breathing room and allows them to take on exit financing. Every carrier has their own way to become profitable and while UA's is not by any means "employee friendly" it had to be done. Drastic times call for drastic measures and Tilton did what he had to do. In business today the old saying "The end justified the means" applies here (and de-frauding investors doesn't count). UA has done and is doing what it needs to do to become profitable.

UA in many ways has more debt than any other carrier in the US. Their obligations alone just equal what carriers like AA, CO, and NW have in debt which includes pensions and other obligations that UA and US both dropped. UA is only competitive when they loose a huge pension debt, that says something about their mainline debt and their assets in hand. UA needs to improve a lot to be the efficient carrier like AA or CO. And who knows about those pensions? Other companies, not just airlines like DL and NW, but just normal union governed companies are considering dropping their pensions like UA did. UA's case started the leak that could cause a flood in the pension debate. UA's gamble is still on its roll and will not be decided until the government address's that issue. Now for the meantime UA can live it up and cruise at their present coarse but catastrophe could happen and that would put UA easily in the basement again. And if UA is smart they should throw out Tilton and get a competent CEO who will use this valuable time to increase margins and grab investors so they are braced and positioned for a worse case scenario.

None of this will not change the fact UA has been a loser for 3 1/2 years straight and were again for July. They should stop focusing on loans and more debt and work on becoming a winner. And you point out P.S. is a great way to start doing that. We've proved that customers will pay a premium to fly in style and comfort, so why not work with UA's high CASM and start more services that are high in RASM? Ted on the other hand has and is a bad idea in general, lower quality and not lowering fares enough on routes it flies to add PAX not to mention its not the kind of flight a good UA FF would like.

Cheers!
 
dforce1
Posts: 506
Joined: Thu Jul 07, 2005 4:16 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 3:02 am

What is the interest UA will have to pay on their new exit financing vs. their operating profit? Furthermore, I think it's awfully bold to say that UA is on its way to recovery after only one quarter of profit. However, I do recognize that they all have to start somewhere and this is a good start. So best of luck to UA and their diligent employees who performed so professionally during such a difficult three years. UA is a valued member of the Star Alliance and I would miss them if they were gone, not to mention that gorgeous livery.
 
kurt
Posts: 402
Joined: Sat Oct 06, 2001 10:04 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 3:15 am

Quoting Galapagapop (Reply 37):
Ted on the other hand has and is a bad idea in general, lower quality and not lowering fares enough on routes it flies to add PAX not to mention its not the kind of flight a good UA FF would like.

Why such UA-hate? Beats me. But this UA 1K is flying DEN-LAS tonight on Ted and it is just the kind of flight I like - a nice aisle seat in Economy Plus, drink chits in hand and a smile on my face!
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 3:22 am

Quoting Galapagapop (Reply 37):
Ted on the other hand has and is a bad idea in general, lower quality and not lowering fares enough on routes it flies to add PAX not to mention its not the kind of flight a good UA FF would like.

What more should UA do? The fares are competitive, the load factors are somewhere around 89% (on Ted, systemwide I think is like 81%), there's IFE (not the best but it's more than some have)...should the F/As start dancing in the aisles for you?
 
dforce1
Posts: 506
Joined: Thu Jul 07, 2005 4:16 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 3:50 am

Quoting FriendlySkies (Reply 40):
should the F/As start dancing in the aisles for you?

If it's the same girls as on Hooters air, then yes!  Smile
 
777adoration
Posts: 18
Joined: Thu Aug 25, 2005 10:57 pm

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 4:05 am

Quoting Cslusarc (Reply 9):
It doesn't sound good that UA will emerge with $3 Billion of DEBT financing and $0 of EQUITY financing.

I think UA NEEDS to raise an equal $3 Billion in EQUITY financing. I don't know any inverstor who would rationally invest in a loss making enterprise with little hope of recovery.

Thank you!
I work in that feild and this is completley true!
 
Mainliner
Posts: 359
Joined: Thu Aug 04, 2005 6:34 am

RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 4:08 am

Great news for United! I hope there's more good news to come in the next few years...all these bad vibes from UA bashers kind of wear me down sometimes.
Every flight counts.
 
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ua2162
Posts: 437
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 5:00 am

Ha! Going under? I doubt it! Where are all those people now? Great news, it looks like UA has nothing but good things to look forward to.
 
galapagapop
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 5:15 am

Quoting Kurt (Reply 39):
Why such UA-hate? Beats me. But this UA 1K is flying DEN-LAS tonight on Ted and it is just the kind of flight I like - a nice aisle seat in Economy Plus, drink chits in hand and a smile on my face!

UA-Hate?

I do not in anyway have anything against UA, flew them 3 weeks ago on P.S. and the flight was A+++ all the way. And I had the nicest FA helping me as well.
 
777adoration
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 5:34 am

It is not "UA hate" or bashing as some call it.
It is more a case of, if someone is "fronting" you that amount of money, they want something in return.Hence the need for UA too come up with EQ financing!
No lender is going to invest in something for a loss.
That's the real world.
I work with it everyday.
It is far from hate or bashing.
 
UAcosCS
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 7:08 am

Quoting Uadc8contrail (Reply 19):
With the same incompetent mgmt and militant work force in place, the future does not look bright for UA, even without this proposed debt load.

You will be getting your CO uniform via UPS ground. You'll see it in 3 or 4 Weeks, they are coming from Guam. Smile

Why are you ignoring me?
We had dreams and songs to sing, It's so lonely round the fields of Athenry.
 
MSY-MSP
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 8:35 am

One thing that seems to be missing from much of the understanding here is how charges in bankruptcy are calculated. Yes, they showed an operating profit, and yes they showed a loss when bankruptcy charges are added in. Now many here scream that they are still losing money. Well in July at least they made money, even after taxes are figured in. Now let me explain.

In bankruptcy, you enter in with a certian amount of debt. UA had a lot of debt when they went in. Throughout the process you negotiate with your creditors, you reject leases, you return property, you do a whole lot of things that need to be accounted for. Thus when UA returns a plane to the lessor or the bank they have to account for that. Well what happens is that they take a charge for that item. So if they returned a plane that had a $21M lease payment due on it (over the course of a lease) then they take the entire charge for the lease on one months statement. When they have an obligation relieved they take a charge for the entire amount of that obligation on that months statement. What is happening is that a lot of numbers are moving around on paper, but no money is changing hands.As mentioned before, in bankruptcy you must remove the entire debt at once. Hence the large paper losses seen in Bankruptcies.

Compare this to an airline not in bankruptcy. If they return an aircraft to the lessor, they still have to account for this. They can remove the plane from the asset side of the ledger, and take out the corresponding note/lease from the debt side. Depending on how the account for this lease on their books, they may take a charge or they may not take a charge. This appears as a one time charge on the books as a way to remove the liability from the books. If there are any penality fees for the return, those show up elsewhere.

What needs to be looked at is Operating profit of each airline and ignore the line items that appear as "one time charges" or "bankruptcy related charges". These numbers are accounting numbers and do not represent the health or weakness of a company. The net profit for a company in bankruptcy is the same as it is for all other companies. Income minus costs (and even in bankruptcy this includes the bills you may not have paid, but still have to account for). As on all statements you need to look for one-time charges or gains. These have nothing to do with determining the health of a company.

So in conclusion. A profit excluding one-time charges/gains is a good thing. A loss excluding those things is not good. AA, CO and UA all showed profits excluding one time charges. DL has lost a boat load of money without any one-time charges. NW and US are who knows.

As for getting $3B in finiancing. That is good. The lenders must believe there is a high likelihood of recovering this debt or they wouldn't make it. We also don't know how it is structured. It very well could be part debt part equity
 
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yyz717
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RE: UA To Get $3 Billion In Exit Financing!

Sat Aug 27, 2005 12:31 pm

Quoting FriendlySkies (Reply 25):
You really sicken me. All you do in UA threads is talk about how failed and useless the employees are. Are you trying to tell me it's the EMPLOYEES fault that the company is in bankruptcy? Here's a little advice: if you don't know anything about the situation, DON'T POST ABOUT IT!

Then you must get sick alot if benign analysis and non-emotional commentary get under your skin.

Yes, it is also the employees' fault when a company is in bankruptcy. Bankruptcy usually only occurs after spectacular and recurrent failures at the ownership, management AND employee level. The former 2 are usually guilty of horrendous strategic errors and poor cost control. The latter is invariably guilty of poor productivity, overly generous pay and benefits, restrictive and inflexible work rules.

Having worked for a mix of well run and poorly run companies over the course of my career, I can certainly speak to the impact that militant and inefficient employees and unions can have in sinking a corporation. Perhaps when you join the working world in a few years, you will have the same observations.

Quoting UAL777 (Reply 27):
What part of operational profit do you not understand? Excluding bankruptcy charges they WERE profitable. Read!

More than you I would say. Those bankruptcy charges were real and non-negotiable. Hence UA remains unprofitable.

Quoting UAL777 (Reply 27):
As to your second sentance, you state that if the unions were NOT militant then costs would be HIGHER? Explain.

I meant to say would be "lower". The militant unions and their inflexible work rules, poor productivity and overly-generous compensation keep unit costs unnecessarily high.

Quoting 1MillionFlyer (Reply 36):
Let me guess you can solve all the problems singlehandedly ! Have you ever been in airline management?

UA mgmt has been spectacularly incompetent. No doubt their corporate culture rewarded mediocrity, political correctness, and did not promote a slavish addiction to cost cutting.

Quoting FriendlySkies (Reply 40):
What more should UA do? The fares are competitive, the load factors are somewhere around 89% (on Ted, systemwide I think is like 81%), there's IFE (not the best but it's more than some have)...should the F/As start dancing in the aisles for you?

Costs remain too high. Further cuts to all union compensation is needed. Work rules need to be loosened to allow work sharing. Pilot & FA salaries should be reduced to the LCC level.

With an 89% load factor, fares can be raised.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.

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