FL370
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Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 1:56 am

i thought i could start a new thread on this, the other one was getting a little too long. here's the thing, my dad works at UA, and he hasn't heard anything about UA and their plans for ordering the 787.


fl370


P.S the 787 would look nice in UA's new colors.
 
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Stitch
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 2:19 am

If UA management has indeed committed to inking a deal, then I would think Boeing would be reporting 35 787 UFOs by now.

Also, if UA management is confident enough of the deal's firmness to leak the deal to Dc10s4ever, I would think it would have been leaked to Chicago and/or Seattle news sources.

Still, we'll know one way or the other by Friday.
 
roseflyer
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 2:25 am

Quoting FL370 (Thread starter):
here's the thing, my dad works at UA, and he hasn't heard anything about UA and their plans for ordering the 787.

Well it depends on what your father does. Companies use to give information like this internally before they announced it, but that practice has pretty much gone away for all but internal matters. Too many people divulge information and investors can get misled. So I would expect a new order to definitely be kept within the divisions that are necessary for it to happen. We'll have to wait for an official press release, but rumors like this although unsubstantiated do sometimes come true.

On another note, I'm sure that some people in UA management know that there is buzz going on about the possibility of a 787 order.
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DAYflyer
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 3:25 am

I bet the whole thing is rubbish.
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mcdu
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 4:16 am

They kept the KWI announcement quite. That city was not even rumored when it was announced so an airplane order could be out there. Also, TK is saying more -400 bids this month and next. Interesting in that we are not slated to get any additional 400's to need a bid and the attrition is very light in that fleet. Something is up but no one is talking. Tilton is good at playing his cards close to his vest.
 
NDSchu777
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:26 am

I certainly hope this is true, but count me in the skeptical crowd. If I remember right, didn't Tilton make a statement a few months ago that United won't be looking to officially purchase new airplanes for another year or two? Also, I'm sure they'll want to carefully evaluate the A350XWB as well.

Anyway, a 787 in the United livery would look great! And as long as we're dreaming, it would be great if they were the launch customer for the 747-8i and the 777-300ER wouldn't look too bad in their fleet either.
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:31 am

Quoting DAYflyer (Reply 3):
I bet the whole thing is rubbish.

Why, It has been 5 years since UA ordered any aircraft. There fleet of 777 are new but there 767 fleet needs replacing. The 787 would be perfect.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
F14ATomcat
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:35 am

Boeing doesn't list orders as UFOs until an actual order has been made.
 
ikramerica
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:41 am

Quoting Boston92 (Reply 6):
There fleet of 777 are new but there 767 fleet needs replacing. The 787 would be perfect.

Exactly. The 788 would be the plane they need. The 350X is a different animal, and would be under consideration when it comes time to replace the 777s, not the 767s.
Of all the things to worry about... the Wookie has no pants.
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:45 am

I have a feeling that once the 787 is out for a year or so, Boeing will orders galore. I don't know if I can say the same for Airbus and there A380.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
Ken777
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 1:03 pm

How strong is the market for 744s to be converted to freighters? Is it strong enough that Boeing would be able to put together a deal with UA where UA gets the launch discounts on a few 748i's and a good deal on the 787s?

Outside of the potential for the 748i added under a very good deal to a 787 order I'm going to sit back, relax and wait to see if this week brings an order.
 
FL370
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 1:34 pm

i recall that a few years back, UA had some really good connections with boeing. i think around the time the 777 was introduced. UA got all sorts of discounts from boeing
 
ikramerica
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 3:34 pm

Quoting Boston92 (Reply 9):

What does that have to do with the topic? Are you just trying to get the A380 crowd worked up (pro and against)?
Of all the things to worry about... the Wookie has no pants.
 
columba
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 4:33 pm

Quoting Boston92 (Reply 9):
I have a feeling that once the 787 is out for a year or so, Boeing will orders galore. I don't know if I can say the same for Airbus and there A380.

As Ikramerica already said what does that have to do with the topic ?
Also the 787 and A380 are totally different airplanes with a whole different markets. If you have to compare Airbus and Boeing again for another time
you should have choosen the A350 instead of the A380.
You would not have compared the A330 with the 747-400 either, do you ?
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
UAL777UK
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 5:08 pm

I hope the order is true but I will beleive it when I see it. What I do beleive though is that Boeing will be dangling a very juicy carrot to UA to go with the 747-8i as well.
 
FriendlySkies
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 10:17 pm

Didn't Tilton say that UA wouldn't order any new airplanes until at least 2008? Or was that just for deliveries...
 
cobra27
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 10:41 pm

Quoting Boston92 (Reply 9):
I don't know if I can say the same for Airbus and there A380.

I don't know if I can say the same for 747-8I. They are both more eficient per seat than 787, but the 787 will outsell them at least 4 to o1.
 
DAYflyer
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Tue Aug 29, 2006 11:51 pm

Quoting Boston92 (Reply 6):

I seriously doubt any more orders for the 787 are coming this year from US legacy carriers, they just dont have the financial strength to do it right now. One profitible qaurter does not an airline make.
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Stitch
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 12:54 am

Quoting Ken777 (Reply 10):
How strong is the market for 744s to be converted to freighters? Is it strong enough that Boeing would be able to put together a deal with UA where UA gets the launch discounts on a few 748i's and a good deal on the 787s?

Some of it would depend on how UA structured their flight crew pay rates. I know 744 flight crew make the same as 772 flight crew, but I don't know if the 748 (along with possibly the A380 and 773 just for completeness sake) were included, as well. If UA has to pay their 748 crew more, that is going to impact the financial's. Plus UA will have to take GE power on the 748 (which, admittedly, they will have to take on the 787's, as well in such a case), which also is going to add costs.

Quoting FL370 (Reply 11):
i recall that a few years back, UA had some really good connections with Boeing. i think around the time the 777 was introduced. UA got all sorts of discounts from Boeing

Well UA used to be part of Boeing in the early 1900s. And UA was part of the "Working Together" team that helped develop the 777, as well as the launch operator (if not customer).

Quoting DAYflyer (Reply 17):
I seriously doubt any more orders for the 787 are coming this year from US legacy carriers, they just dont have the financial strength to do it right now. One profitable quarter does not an airline make.

I suppose if the rumor is true, it could hinge on how the deal is structured. If Boeing allows UA to apply the $65 million they have as "factory credit" (so a bit less then $2 million a frame), then there is no cash out of pocket up front. And if Boeing allows UA to defer the "progress payments" until the frames are actually laid down (in, say 2009,) and allows UA to cancel without penalty (or any additional penalty other then the $65 million) up to that time, then it really isn't costing UA anything to secure 35 slots. If their financial's support all 35 (or a lower amount) come 2009, they start making progress payments and all is good. If not, then they walk away from money that they couldn't use for general operating expenses, anyway.
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 12:58 am

Quoting Columba (Reply 13):
As Ikramerica already said what does that have to do with the topic ?
Also the 787 and A380 are totally different airplanes with a whole different markets. If you have to compare Airbus and Boeing again for another time
you should have choosen the A350 instead of the A380.
You would not have compared the A330 with the 747-400 either, do you ?

What? Calm down. Both are the two companies newest creations, and all I said was I think 787 will have more orders after it is out for a year or so.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
Tan Flyr
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 1:05 am

Quoting DAYflyer (Reply 17):
I seriously doubt any more orders for the 787 are coming this year from US legacy carriers, they just dont have the financial strength to do it right now. One profitible qaurter does not an airline make.

Generally, I would agree 100% with you. Emember that NW & CO have orders in and they ARE legacy carriers.
The rock and hard spot that AA,UA & DL find themselves is if a few more significant sized orders from foreign carriers are placed, they will find themselves more years out than prudent planning would permit.

Thus, since AA & DL have the "gentlemens agreement", perhaps they have a way to secure some slots sooner?? Probably only a few people know..and so far it doesn't seem as if they are talking. UA may be in a bit of a tighter fix and really need to find a way to at least put some deposits down.

Actually, AA is almost in the same pot..as has been discussed to death on here, the replacement for the A-300-600's..Sometime soon an order or deposits will have to placed.

So, we wait...and hope that all the US carriers can eek out some profits and get back in the picture.
 
jacobin777
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 1:21 am

Quoting Stitch (Reply 18):
Well UA used to be part of Boeing in the early 1900s. And UA was part of the "Working Together" team that helped develop the 777, as well as the launch operator (if not customer).

The only carrier which hasn't purchased the 777 who was part of the "Working Together" team was QF... mad ....but I'm still hoping to see the 777 in QF colours.. pray ...

Now that UA HQ will be a few blocks away from Boeing HQ, maybe Boeing will have more special invites for UA with large mock-up frames of the 787 and 747-8I in UA colours.. biggrin 
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UAL777UK
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 1:21 am

Quoting Stitch (Reply 18):
I suppose if the rumor is true, it could hinge on how the deal is structured. If Boeing allows UA to apply the $65 million they have as "factory credit" (so a bit less then $2 million a frame), then there is no cash out of pocket up front. And if Boeing allows UA to defer the "progress payments" until the frames are actually laid down (in, say 2009,) and allows UA to cancel without penalty (or any additional penalty other then the $65 million) up to that time, then it really isn't costing UA anything to secure 35 slots. If their financial's support all 35 (or a lower amount) come 2009, they start making progress payments and all is good. If not, then they walk away from money that they couldn't use for general operating expenses, anyway.

You have a point. I dont beleive that UA will not ask Boeing for some very favourable deal on deposits here and that whilst Boeing would not be happy to just accept anything that UA put on thr table, they will be able to negotiate some deal which has everybody walking away with a smile on their faces.
If UA were to suggest a deal that saw them take options on a large order for 787's and with that they tempted Boeing with an order for the 747-8i, a deal could surely be struck IMHO anyway!
 
columba
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 2:23 am

Quoting Boston92 (Reply 19):
Both are the two companies newest creations, and all I said was I think 787 will have more orders after it is out for a year or so.

The Mercedes R class and the BMW Mini are also the newest creations of these two companies and still don´t compete with each other.
No doubt that the 787 will have more orders than the A380 because they are not too many airlines around that will have the need for a 747/A380 sized plane but rather need a A350/787 sized aircraft for their longhaul network. The A380 has a very limited market with just a few major carriers.
I have no intention to start an A vs B argument but you can not compare the 787 and the A380 it is like apples and oranges.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 3:09 am

Quoting Columba (Reply 23):
I have no intention to start an A vs B argument but you can not compare the 787 and the A380 it is like apples and oranges.

There was never a comparison. I said that "I think" that when the 787 comes out, there would be an increase orders, but when the A380 comes out, there will be a decrease in orders. Never any comparison. This is just what I think. You can think what you want.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
787engineer
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 7:41 am

Quoting Boston92 (Reply 24):
There was never a comparison. I said that "I think" that when the 787 comes out, there would be an increase orders, but when the A380 comes out, there will be a decrease in orders. Never any comparison. This is just what I think. You can think what you want.

What do you mean by a decrease in orders? A decrease in order rates or are you implying there will be cancellations after EIS? The order rate is already pretty low  Yeah sure, if they get any sort of order the "rate" will obviously go up. IMO, The A380 will no doubt pick up a few orders after it proves itself service. Will it pick up as many orders as the 787 if it proves itself in service, of course not. The market for the A380 is so much smaller than the 787/A350's
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 7:45 am

Quoting 787engineer (Reply 25):
Will it pick up as many orders as the 787 if it proves itself in service, of course not. The market for the A380 is so much smaller than the 787/A350's

Everybody but me are comparing the two planes. If the A380 ever does "prove itself service", then you can argue with me. I bet the A380 wont ever prove itself.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
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Stitch
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 11:44 am

Since this thread is about UA and a rumored 787 order by them, can we please move the A380 and 787 program success comments to another thread? Thanks.  Smile
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 11:50 am

Quoting Stitch (Reply 27):
Since this thread is about UA and a rumored 787 order by them, can we please move the A380 and 787 program success comments to another thread? Thanks.

Agreed.

I know UA will order 787, just the question is when. Maybe next (this week), maybe not.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
manni
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 12:00 pm

Quoting Boston92 (Reply 26):
I bet the A380 wont ever prove itself.

I can't wait to hear your arguments.  Yeah sure

Quoting Boston92 (Reply 24):
but when the A380 comes out, there will be a decrease in orders.

I can't wait to hear your arguments.  rotfl 

Quoting Columba (Reply 23):
you can not compare the 787 and the A380 it is like apples and oranges.

More like apples and melons.  Wink

Quoting Stitch (Reply 27):
Since this thread is about UA and a rumored 787 order by them, can we please move the A380 and 787 program success comments to another thread?

 checkmark 

Apart from the rumour spread by the topicstarter of part 1 of this topic, has there been any other source detected that claims a similar story?
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gigneil
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 12:07 pm

Quoting Boston92 (Reply 26):
I bet the A380 wont ever prove itself

Can you back that up?

N
 
Boston92
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 12:10 pm

Quoting Manni (Reply 29):
I can't wait to hear your arguments.

Okay.

Quoting Manni (Reply 29):
Apart from the rumour spread by the topicstarter of part 1 of this topic, has there been any other source detected that claims a similar story?

Mostly just rumors from UA employees, telling their family who tells us. Like a game of telephone, but that never works out.  eyebrow 
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
JayinKitsap
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Wed Aug 30, 2006 10:31 pm

Quoting Manni (Reply 29):
Apart from the rumour spread by the topicstarter of part 1 of this topic, has there been any other source detected that claims a similar story?

I think this rumor has more basis than the LH threads where LH will be ordering a boatload of 380's, no 350's, no 340's, etc. and Boeing need not apply. 90% of the posters have little clue as to the specific planes LH will be replacing so as to match good candidates for quantity and type.

UA is facing a serious issue of needing new high efficiency planes and will be too far out on the wait list if they postpone any significant amount of time. Waiting 6 months now before ordering might mean two added years before first delivery if the 787 is ordered. I suspect that 787 production is at least 70% booked now in 11 & 12, & 50% in 13, so as few as 60 orders could shift availability by 2 years. A similar situation may occur on the 747 line. I think for pricing considerations additional 777's would not be in UA's consideration.

I personally think that UA will use their current deposit monies with both A & B and will stay with B on the long haul & A on the short haul.
 
JAAlbert
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 1:58 am

Okay, so it's now "next week" -- where is the order announcement???
 
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Stitch
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 2:52 am

Quoting JAAlbert (Reply 33):
Okay, so it's now "next week" -- where is the order announcement???

Maybe UA and Boeing will announce it on Friday after the market's close to let Wall Street analysts chew over it's significance and impact over the weekend.  Smile
 
787engineer
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 3:40 am

Quoting Boston92 (Reply 26):
Everybody but me are comparing the two planes. If the A380 ever does "prove itself service", then you can argue with me.

Uh. . . I don't think 'everybody' is comparing the A380 with the 787. If you read my post you would see I agree with you that the 787 will get a lot more orders than the A380 if both prove themselves in service. I don't think anyone would argue with that.

Quoting Boston92 (Reply 26):
I bet the A380 wont ever prove itself.

Only time will tell on that one. I think the A380 is looking pretty good as far as performance is concerned. But the VLA market is much smaller than the 787s and I don't think that will change much over the next 20-30 years.
 
worldtraveler
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 3:54 am

UA’s restructuring plan to get out of bankruptcy assumed no significant capital expenditures for 5 years which makes the 2008 ORDER date plausible if they met their plan.

However, UA just reported the lowest operating profit margin of any airline in the US. UA has the highest costs in the industry, despite three years in bankruptcy.

UA is doing nothing to convince anyone that it should be loaned the billions of dollars that it takes to order new aircraft.
 
ikramerica
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 4:08 am

Quoting WorldTraveler (Reply 36):
UA is doing nothing to convince anyone that it should be loaned the billions of dollars that it takes to order new aircraft.

But they could lease them, as placing 787s elsewhere should UA default will not be a problem.
Of all the things to worry about... the Wookie has no pants.
 
katekebo
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 4:20 am

Quoting WorldTraveler (Reply 36):
UA’s restructuring plan to get out of bankruptcy assumed no significant capital expenditures for 5 years which makes the 2008 ORDER date plausible if they met their plan.

Orderring the aiplanes now does not necessarily imply an immediate huge cash outlay. I think a customer like UA could place an order with less then 10% downpayment, maybe as low 5%, and still reserve delivery slots. The payment of the remaining amount would be done prior to delivery. The UA name still has a lot of leverage.
 
worldtraveler
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 4:50 am

The point is not what kind of terms UA could get but that UA is using its existing assets more poorly than any other carrier. Financiers would be hard pressed to loan ANY money to a company that is at the bottom of its peers in terms of financial performance.

The sad reality is that UA is exhibited some of the same problems that it had prior to bankruptcy – the highest costs in the industry, poorest profit performance, and markets that are highly susceptible to economic downturn and LFC incursion (esp. the California markets if Virgin America is launched). After spending three years in bankruptcy, to continue to be at the bottom of the industry despite having some of the industry’s most coveted routes raises some serious questions.
 
CTHEWORLD
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 4:56 am

Quoting WorldTraveler (Reply 36):
UA has the highest costs in the industry, despite three years in bankruptcy.

Where are you getting this information?
 
SeeTheWorld
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 5:05 am

Quoting WorldTraveler (Reply 39):
The point is not what kind of terms UA could get but that UA is using its existing assets more poorly than any other carrier. Financiers would be hard pressed to loan ANY money to a company that is at the bottom of its peers in terms of financial performance.

I'm not sure what that means, but in terms of assets, at least UA has some valuable assets versus your beloved Delta.

Quoting WorldTraveler (Reply 39):
The sad reality is that UA is exhibited some of the same problems that it had prior to bankruptcy – the highest costs in the industry, poorest profit performance, and markets that are highly susceptible to economic downturn and LFC incursion (esp. the California markets if Virgin America is launched). After spending three years in bankruptcy, to continue to be at the bottom of the industry despite having some of the industry’s most coveted routes raises some serious questions.

While UA still has many issues, they also receive some of the highest premiums in the industry. While AA and CO had better premiums then UA recently, UA has closed the gap and in some entities has moved ahead. And, if you want to talk about LCC incursion, look in your own backyard. Also, Virgin America is a paper airline whose chances of approval are probably less than 50/50, but AirTran continues to grow and prosper.

Regardless, the issues you raise have very little to do with whether UA will order aircraft imminently or not. Wasn't it you (or was it your brethren) who has been trying to convince us that DL is about to order 777s. Perhaps they are, and perhaps UA is as well, but "People in glass houses ... "

The idea that a carrier still in bankruptcy with a lot left to do before it gets out (and only one good quarter under its belt) with no valuable "HARD" assets is in any better position to order aircraft than a carrier not in bankruptcy with valuable LHR and NRT slots and one of the highest premium yields is laughable.

The fact is: UA and DL both have a lot of work ahead before they're out of the woods, but at some point, they are both going to need some new aircraft.
 
worldtraveler
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 9:07 am

All of the airlines in question have released their information publicly. Comparisons of industry financial performance is available from several industry analysts or you can do the research yourself. What I quote are facts.

I don't personally want to see Virgin America launch because I don't believe they are an independent US company but that is another discussion. The point is that they are going to be heavily focused on California and that means they are going to impact UA more than any other airline. You had best hope Virgin America stays grounded if you want UA to survive.

And, See, UA's financial performance has everything to do with their ability to borrow more money. If you don't understand it, I suggest you go file for bankruptcy and then apply for a mortgage and then you'll understand.

How many assets means nothing if UA can't use them to generate higher returns. Let me reiterate slowly. UA had the lowest operating profit margin of any major airline in the US for the most recent quarter.

Obviously those revenue premiums are not overcoming their even more premium costs.

[Edited 2006-08-31 02:10:02]
 
bistro1200
Posts: 312
Joined: Sat Nov 01, 2003 7:13 am

RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 9:55 am

Quoting RoseFlyer (Reply 2):
Companies use to give information like this internally before they announced it, but that practice has pretty much gone away for all but internal matters. Too many people divulge information and investors can get misled.



Quoting Mcdu (Reply 4):
Something is up but no one is talking.

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Measure to the millimeter, mark with a crayon, cut with an axe.
 
SeeTheWorld
Posts: 1090
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 11:55 am

Quoting WorldTraveler (Reply 42):
All of the airlines in question have released their information publicly. Comparisons of industry financial performance is available from several industry analysts or you can do the research yourself. What I quote are facts.

You quoted one fact: UA's operating margin. I suggest you sit down and read all the analyst reports because I have read them all cover to cover. Most analyst agree that Delta has the most work to do before they are out of the woods. While NW has imminent issues with its F/As, many analyst suggest that their cost cutting has been more extensive than any other carrier and if they can get through the labor issues (which I believe they will), they are going to be extremely competitive on costs. Most analyst also agree that UA costs are still a problem.

Everyone's passenger unit revenues (total revenues and operating margins, year-over-year) are all up significantly; and while UA had one of the lower operating margins, in the past few quarters their domestic premium has pulled even to and in a couple of quarters (including 2Q06) surpassed AA and CO. DL's yields still lag their competitors, hence their unprecedented international expansion. If you want more analyst views and other facts, I'll be happy to provide you more tomorrow when I have my files in front of me. Go ahead and give me all your biased comments, and I'll address them one by one.

Quoting WorldTraveler (Reply 42):
I don't personally want to see Virgin America launch because I don't believe they are an independent US company but that is another discussion. The point is that they are going to be heavily focused on California and that means they are going to impact UA more than any other airline. You had best hope Virgin America stays grounded if you want UA to survive.

Just because AV is based in SFO doesn't mean they will be heavily focused on California - the jury is still out on where they plan to fly, if ever. There is one point we do agree on and that is I also don't believe they are an independent company - at least as the laws currently read - regardless of whether one agrees with the current ownership laws are not. I have serious doubts about VA's application. However, I believe VA is irrelevant to the discussion about whether UA will purchase aircraft in the near future or not. If you want to make this discussion about "what ifs," DL is in a much more precarious position than UA, i.e. if there is a terrorist attack, another accident, $100/bbl oil, a recession, et. al.

Quoting WorldTraveler (Reply 42):
And, See, UA's financial performance has everything to do with their ability to borrow more money. If you don't understand it, I suggest you go file for bankruptcy and then apply for a mortgage and then you'll understand.

Again, I will reiterate that UA is currently in a better position to borrow money than DL because: 1) They aren't currently in bankruptcy and 2) They actually have assets that other carriers would pay real money for - LHR and NRT. Please tell me what unique assets DL has that could be used as collateral that UA doesn't have.

Quoting WorldTraveler (Reply 42):
How many assets means nothing if UA can't use them to generate higher returns. Let me reiterate slowly. UA had the lowest operating profit margin of any major airline in the US for the most recent quarter.

It's not how many assets, World, it's assets that can be sold, i.e. collaterized, and Delta has none. Having the lowest operating profit margin in one quarter does not make your case. You can reiterate it as slowly as you'd like, and you can say it over and over, it still won't make DL the best carrier in the world and UA on the brink of liquidation.

Quoting WorldTraveler (Reply 42):
Obviously those revenue premiums are not overcoming their even more premium costs.

Yes, UA has a cost problem, which is partially offset by their revenue premiums. They have work to do, but we are talking about the likelihood that UA may order aircraft, and you once again bash UA while showing your incredible bias for DL. All I did was point out your bias, and everyone has their favortie carriers, but you still need to make an objective case. I admitted that DL and/or UA may or may not order new jets in the near future, but for you to intimate that DL has the ability to order new jets and UA doesn't based on your bias and one quarter's operating margin is ridiculous.
 
hz747300
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 3:26 pm

I would like to see United start a subsidiary in Hong Kong, which is locally owned. That way, there is a Star Alliance presence in one of the world's busiest cities. I think if they had a base of 787s there, then it would be easier for me to go to and from Sydney and Hong Kong. I guess what I am really saying is that I am tired of changing planes in Singapore  Smile

The 787 would help them with the Asia/Pacifc expansion between the United States, mini-hub in Tokyo, and the rest of Asia. They could re-enter markets which were not economical with larger aircraft.
Keep on truckin'...
 
worldtraveler
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Thu Aug 31, 2006 11:33 pm

Quoting SeeTheWorld (Reply 44):
and while UA had one of the lower operating margins, in the past few quarters their domestic premium has pulled even to and in a couple of quarters (including 2Q06) surpassed AA and CO.

You don’t get it. It doesn’t matter one hill of beans what UA’s premium in any part of the world is , their costs are way out of line with the industry – which is why UA could not generate profit margins in line with other carriers. I can’t understand how you can’t grasp that. Any company can have the best revenues in their industry but if their costs are so much higher than their competition, they will not be as profitable as long as pricing is equal (and for all practical purposes it is in the airline industry).

Quoting SeeTheWorld (Reply 44):
Just because AV is based in SFO doesn't mean they will be heavily focused on California

We can only go by what they filed with the DOT. Their DOT filing shows about 10 routes each out of SFO and LAX.

Quoting SeeTheWorld (Reply 44):
Again, I will reiterate that UA is currently in a better position to borrow money than DL because: 1) They aren't currently in bankruptcy and 2) They actually have assets that other carriers would pay real money for - LHR and NRT. Please tell me what unique assets DL has that could be used as collateral that UA doesn't have.

UA’s assets are all fully pledged as collateral. Remember that UA accepted an all-debt exit financing package. Their debt is not much different than what it was when they went into BK other than their pension obligations.

UA’s only advantage is that they aren’t in BK but they are not generating the profit margins that other carriers are and they are still highly leveraged.

UA could order aircraft but they will pay premium interest rates for them. Their financial fundamentals are not strong and they do not have the balance sheet strength that would allow them to be treated as an average risk borrower.

Quoting SeeTheWorld (Reply 44):
All I did was point out your bias

And all I have done is point out the financial reasons I don’t think UA will be spending much money soon. They could order aircraft but I don’t really think so.
 
NDSchu777
Posts: 389
Joined: Sat Oct 06, 2001 3:29 am

RE: Rumor: UA To Order 35 787's Next Week! PT2

Sat Sep 02, 2006 1:26 am

It's Friday and no big earth-shattering press release from United or Boeing. Seems all this rumor was, was a rumor. Although it was pretty unlikely I still see United ordering the 787 some time in the future. WorldTraveler definitely had some insights into the financials that would prevent UA from ordering immediately, but if they do want to grow and get an edge or just keep up with the competition, they will have to order new airplanes. That aging 767 fleet will cost them more in the long run to maintain than getting a brand new, fuel-efficient 787 fleet.
 
ksupilot
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Joined: Wed Jul 26, 2006 9:27 am

RE: Rumor: UA To Order 35 787's Next Week! PT2

Sat Sep 02, 2006 1:41 am

Since it looks like it isn't happening today, when do you think we might be seeing this order? By the end of the year? A year from now?
 
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United787
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RE: Rumor: UA To Order 35 787's Next Week! PT2

Sat Sep 02, 2006 1:43 am

I guess I can put the Champagne away.  Sad  cry   crying   frown