atlaaron
Posts: 973
Joined: Mon Apr 24, 2006 11:30 pm

Concerns About UA

Sun Apr 29, 2007 1:06 pm

Ok, so I am curious how concerned we should be about the financial future of UA? It can't be a good sign when everyone else (basically) posted a profit but UA fresh out of BK still could not. How likely is it for UA to end up back in BK? I hate to say it but I think they NEED a merger.

I think they have a great product but apparently just do not have costs in line.
 
xjramper
Posts: 2318
Joined: Wed Dec 10, 2003 1:10 am

RE: Concerns About UA

Sun Apr 29, 2007 1:41 pm

I wouldn't call UA "fresh out" of BK. It has been over a year since they exited and for the entire fiscal year of 2006, they posted a $440 million profit. For what they have been through, give them a chance.

XJR
Look ma' no hands!
 
atlaaron
Posts: 973
Joined: Mon Apr 24, 2006 11:30 pm

RE: Concerns About UA

Sun Apr 29, 2007 2:01 pm

Quoting XJRamper (Reply 1):
and for the entire fiscal year of 2006, they posted a $440 million profit.

That's not true. According to United's own website:

Since its emergence from reorganization, for the eleven months ended December 31, 2006, the new UAL reported net income of $25 million, an improvement of $423 million, excluding reorganization items, versus the corresponding eleven month period of 2005.
 
deltal1011man
Posts: 4640
Joined: Mon Sep 19, 2005 9:17 am

RE: Concerns About UA

Sun Apr 29, 2007 2:26 pm

Quoting ATLAaron (Thread starter):
I hate to say it but I think they NEED a merger.

i think that one is going to happen no matter what. UA and CO have wanted to merge as long as DL and NW have wanted to merge. The only problem is who will AA go with? US?

i see in the next 2years
UA and CO merge
DL and NW merge
AA and ?? merge
and US is left out to dry
New airliners.net web site sucks.
 
atlaaron
Posts: 973
Joined: Mon Apr 24, 2006 11:30 pm

RE: Concerns About UA

Sun Apr 29, 2007 2:36 pm

Quoting DeltaL1011man (Reply 3):
The only problem is who will AA go with?

AA would like to see government rules change in regards to foreign airline ownership. They would like to be with BA, IMO. If the other airlines merge that you mentioned watch AA begin lobbying hard for reform, and look for them to get what they want, again IMO.
 
xjramper
Posts: 2318
Joined: Wed Dec 10, 2003 1:10 am

RE: Concerns About UA

Sun Apr 29, 2007 2:51 pm

Quoting ATLAaron (Reply 2):
Since its emergence from reorganization, for the eleven months ended December 31, 2006, the new UAL reported net income of $25 million, an improvement of $423 million, excluding reorganization items, versus the corresponding eleven month period of 2005.

Oops...i saw that they had an operating earning of $447,000,000 in 2006.

XJR
Look ma' no hands!
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: Concerns About UA

Sun Apr 29, 2007 2:51 pm

Quoting ATLAaron (Reply 4):
AA would like to see government rules change in regards to foreign airline ownership. They would like to be with BA, IMO. If the other airlines merge that you mentioned watch AA begin lobbying hard for reform, and look for them to get what they want, again IMO.

UA has been lobbying for this much harder than any other airline. I could see UA/LH get much closer if the rules are relaxed.
 
atlaaron
Posts: 973
Joined: Mon Apr 24, 2006 11:30 pm

RE: Concerns About UA

Sun Apr 29, 2007 2:58 pm

Quoting FriendlySkies (Reply 6):
UA has been lobbying for this much harder than any other airline. I could see UA/LH get much closer if the rules are relaxed.

I agree. Especially since they do not have a merger carrier in the US at the moment. CO would rather go it alone.
 
legend500
Posts: 141
Joined: Sat Jul 30, 2005 5:05 pm

RE: Concerns About UA

Sun Apr 29, 2007 2:59 pm

I don't really think AA need do anything in a case of mergermania. After the bitter TWA pill, AA should be happy to hub-up and battle from its fortress.

Back to UA...it's concerning that their margins already seem pretty thin this close to BK. I don't think it's a big problem yet...but certainly not good news with fuel prices going up.

We'll have to wait and watch.
 
floridaflyboy
Posts: 1500
Joined: Sat Jun 03, 2006 3:26 pm

RE: Concerns About UA

Sun Apr 29, 2007 3:06 pm

One thing we have to remember on the foreign merger thing, is that even if the rules were relaxed, that doesn't mean the Department of Justice would approve a merger or even a closer tie-up between two carriers. Heck, they don't approve all mergers here within the United States, let alone ones with foreign companies.
Good goes around!
 
IADLHR
Posts: 612
Joined: Wed Apr 27, 2005 10:25 pm

RE: Concerns About UA

Sun Apr 29, 2007 10:55 pm

Quoting Floridaflyboy (Reply 9):
One thing we have to remember on the foreign merger thing, is that even if the rules were relaxed, that doesn't mean the Department of Justice would approve a merger or even a closer tie-up between two carriers. Heck, they don't approve all mergers here within the United States, let alone ones with foreign companies

Exactly, it could also get harder go get one arrpoved if, as expected, the democrats win the White House in 2008. As it is, now, with the democrats controlling congress it would be harder even now than it was a few years ago.
 
HighFlight1996
Posts: 16
Joined: Thu Jun 09, 2005 8:53 am

RE: Concerns About UA

Sun Apr 29, 2007 11:08 pm

Just as the financials are not all that exciting, I am even more concerned about passenger discontent. While I will not claim to be UA's best customer, I do feel I have enough experience with them to make comments (44 flights this year, 600+ in last 10 years). There ability to provide a competitive product - cost, ontime flights, quality product (amenities, cabin service, etc.) compared to other US carriers is what is going to send them back IMO. The amount of passenger discontent on the plane and in the terminals is increasing rapidly on a weekly basis. For what I am asked to pay for their product, it just is not worth it any longer - and those feelings seem to increase on a weekly basis based on my discussions with other passengers. I have tried to be a loyal customer - even going so far as to pay more for their flights versus some of their competitors, but it just isn't worth it anymore. There are no benefits to it. So, the point of all these comments, is that while I was willing to pay more in the past, I am already diverting my travel to other carriers. Considering I was paying fairly high-priced fares, this will cause problems. (And I am not naive enough to think that it is my contribution alone that will lead to even further deterioration in their financials, but it is the combination of myself and enough other passengers).
 
UAL777UK
Posts: 2132
Joined: Sun Nov 20, 2005 1:16 am

RE: Concerns About UA

Sun Apr 29, 2007 11:42 pm

I fly UA alot, mostly Internationally, I flew from LHR-SFO-SYD most recently, all legs were in F. I agree that there are inconsistances in each flight but my most worrying aspects of those flights was the crews. Some of the SFO crews working over the Pacific were just quite frankly an emabarrasment. I just dont understand how someone at the base where they are departing doesmn't pull them aside and has a word with them. Hair was a mess, chewing gum etc. Dont get me wrong that does not go for all of them but it only takes one or two to let the sidse down and on this trip it did and I might add that its not the first time I have noticed this, over th Pacific!. However on the LHR-SFO-LHR legs it was like flying with another airline.......totally different, very smart........come on UA, get it sorted!!
 
cirrusdriver
Posts: 115
Joined: Thu Nov 23, 2006 1:29 pm

RE: Concerns About UA

Mon Apr 30, 2007 12:54 am

Quoting ATLAaron (Reply 2):
excluding reorganization items.

Those lawyers and executive compensation add up, dont they? Knowing UA management, they will start laying off more worker bees while taking enormous pay raises for themselves. They will call it "key employee retention", and lobby for more ways to screw the passengers and its employees through mergers and bankruptcies. What a mess! I am sure that all you CEO cheerleaders on A.net can justify Titlons pay and bonuses. It's ok though, nothing wrong here, just give us your money..........  banghead 
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: Concerns About UA

Mon Apr 30, 2007 1:15 am

While Q1 was disappointing primarily due domestic RASM, I would not worry about UA financials at the moment. If you dig into the numbers they are on pretty good footing, building up huge cash reserves (almost $4B), and paying off debts quite well ($1B on Q1), while cost are running even below plan.

Here are some comments by analysts about the carriers results last week.


Bear Stearns
Cash is King. With no aircraft deliveries in sight, the free cash flow potential remains powerful. Our combined 2007 and 2008 estimated free cash flow at UAL equate to over 61% of UAUA's $4.4 billion equity market capitalization. Extend the analysis out to 2009 and the potential free cash flow could cover the entire current market cap. After paying down roughly $1bn in debt ahead of schedule in 1Q and continued strong cash flow projections, UAL may soon be in a position to use some of this enormous cash.

Lehman
On a relative basis, we continue to favor UAUA shares given valuation.

Morgan Stanley
Cost improvements remain on track. In 2006, United forecasted $400 million in cost savings for 2007, $135 million of which was realized in 2006. Management reiterated that it is on track to achieve the remaining $265 million of projected cost savings in 2007.

Merrill Lynch
Mar Q results lighter than expected UAL reported Mar Q loss per share of $1.32. Excluding special items, Mar Q loss per share is $1.31. While the headline result was disappointing, if we were to adjust for all special items as well as the deferred revenue from Mileage Plus, net loss for UAL would have been about $44 million, which is $14 million lower than our estimate. As some do not view all of the one-timers as truly one-timers, it probably makes sense to look at United on a cash flow basis. In that regard, the company generated $626 million of cash from operations for the quarter.
From the desert to the sea, to all of Southern California
 
jetjeanes
Posts: 897
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RE: Concerns About UA

Mon Apr 30, 2007 1:21 am

United will be able to pull out. they have done an excellant job so far
i can see for 80 miles
 
N174UA
Posts: 860
Joined: Thu Jun 01, 2006 4:17 pm

RE: Concerns About UA

Mon Apr 30, 2007 1:57 am

Quoting HighFlight1996 (Reply 11):
I am even more concerned about passenger discontent.

 checkmark  This is one of their biggest concerns right now. Same goes for US.

Quoting Laxintl (Reply 14):
If you dig into the numbers they are on pretty good footing, building up huge cash reserves (almost $4B), and paying off debts quite well ($1B on Q1), while cost are running even below plan.

 checkmark  Yes. Look at the short term and long term cash inflows. They are the most important. You can have a month or a quarter of loss, but if you're cash flow positive, you're in good shape in the long run. United's assets (I should say those that were mortgaged during Ch. 11) are no longer collateralized, and United was able to lower the interest rate on its debt. They are focusing on cleaning up the balance sheet, which is necessary regardless of whether they want a merger or not.

Quoting Laxintl (Reply 14):
it probably makes sense to look at United on a cash flow basis. In that regard, the company generated $626 million of cash from operations for the quarter.

Yep. See above.
 
lincoln
Posts: 3133
Joined: Mon Nov 01, 2004 11:22 pm

RE: Concerns About UA

Mon Apr 30, 2007 2:16 am

Quoting DeltaL1011man (Reply 3):
i think that one is going to happen no matter what. UA and CO have wanted to merge as long as DL

Unless I missed something, UA has wanted to merge with CO, but CO has absoultely no desire to merge with UA.
CO Is My Airline of Choice || Baggage Claim is an airline's last chance to disappoint a customer || Next flts in profile
 
atlaaron
Posts: 973
Joined: Mon Apr 24, 2006 11:30 pm

RE: Concerns About UA

Mon Apr 30, 2007 2:34 am

Well I am sure there is passenger dicontent, I just find it hard to believe that it is any worse than any other airline. If you hang around A.net long enough there will be a thread with 100+ posts about dicontent at AA also. There seems to be plenty of complaints coming out regarding US as well. I will say I don't read many complaints about CO.

While full planes certainly don't equal profits it does show passengers are booking, and I have a flight booked with UA in May that I can't even get seat assignments for because it is full. Their loads are doing well at least from my experience so far in 2007. BTW my itinerary is CLE-ORD-SJU-ORD-CLE.

Quoting Lincoln (Reply 17):
Unless I missed something, UA has wanted to merge with CO, but CO has absoultely no desire to merge with UA.

Nope, I believe you are correct.


Also, let the predictions begin on what UA will do with all of this cash they are building. I believe I read somewhere recently that they do not expect any aircraft orders in the "near" future.
 
777fan
Posts: 2256
Joined: Wed Jan 04, 2006 12:09 pm

RE: Concerns About UA

Mon Apr 30, 2007 3:02 am

Quoting Legend500 (Reply 8):
I don't think it's a big problem yet...but certainly not good news with fuel prices going up.

You're right - fuel prices will continue to be a thorn in UA's side. IIRC, their BK reorg plan was based upon $50/bbl oil; it hasn't been close to that in some time and probably won't any time soon. The best solution to that problem will be to continue to hedge fuel prices and stress performance efficiency. New a/c (787?) or winglets down the road will help with the fuel burn issue as well.

Quoting HighFlight1996 (Reply 11):
I am even more concerned about passenger discontent.

No doubt - I'm also a UA P/E and attempt to give UA the benefit of the doubt whenever I can but have noticed that on at least my last few flights, the crews appear to do little more than ride along with the pax. The service is robotic at best and indifference abounds. I normally shy away from providing online feedback but felt compelled to do it after my last segment (ORD-BWI) in which a pax toting a stroller for her daughter was allowed to bring it onboard only to find that there wasn't any overhead storage room left (hello, closet?!). The FA publicly chastised the poor woman because she "should've known better" than to expect there to be room left on a full a/c. Instead of offering to help, she went on to claim that it was "impossible" to check the stroller because the cargo door was closed (it does open up again, right?!). Unreal.

Quoting ATLAaron (Reply 18):
I have a flight booked with UA in May that I can't even get seat assignments for because it is full

I found the same thing. Flights between any of the DC area airports and ORD are pricing out at a minimum of $192.80 for weekends (THU-SUN or FRI-MON) between now and August. FWIW, WN isn't any cheaper, nor does it offer more flights.


777fan
DC-8 61/63/71 DC-9-30/50 MD-80/82/83 DC-10-10/30 MD-11 717 721/2 732/3/4/5/G/8/9 741/2/4 752 762/3 777 A306/319/20/33 AT
 
n844aa
Posts: 1266
Joined: Fri Jul 18, 2003 10:38 am

RE: Concerns About UA

Mon Apr 30, 2007 3:06 am

Quoting Lincoln (Reply 17):
Unless I missed something, UA has wanted to merge with CO, but CO has absoultely no desire to merge with UA.

I think CO may have been very interested in UA's routes and some of their assets, but the sticking point was probably who would be in control. CO would love to regain a hub at DEN (past and present leadership has said as much) and maybe have IAD to relieve some of their EWR operations, but only if Houston was running the show.
New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
 
deltal1011man
Posts: 4640
Joined: Mon Sep 19, 2005 9:17 am

RE: Concerns About UA

Mon Apr 30, 2007 3:12 am

Quoting Lincoln (Reply 17):
Unless I missed something, UA has wanted to merge with CO, but CO has absoultely no desire to merge with UA.

When US failed to buy DL they both wanted to merge if......(look down)

Quoting N844AA (Reply 20):
I think CO may have been very interested in UA's routes and some of their assets, but the sticking point was probably who would be in control. CO would love to regain a hub at DEN (past and present leadership has said as much) and maybe have IAD to relieve some of their EWR operations, but only if Houston was running the show.

CO wants to be control just DL wants to be in control if they merge with NW
New airliners.net web site sucks.
 
n844aa
Posts: 1266
Joined: Fri Jul 18, 2003 10:38 am

RE: Concerns About UA

Mon Apr 30, 2007 3:18 am

Quoting DeltaL1011man (Reply 21):
CO wants to be control just DL wants to be in control if they merge with NW

Right, but by all accounts, CO is the better-run airline. They've avoided bankruptcy since the ... pre-Bethune unpleasantness, and have remained solvent since then. Plus employee relations and customer satisfaction have remained strong throughout. Not to say that UA management hasn't done a good job with a difficult situation, but I'd rather see CO's management team take the helm of a combined airline.
New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
 
scorpy
Posts: 165
Joined: Sat Dec 23, 2006 6:26 pm

RE: Concerns About UA

Mon Apr 30, 2007 3:28 am

Quoting N844AA (Reply 20):
I think CO may have been very interested in UA's routes and some of their assets, but the sticking point was probably who would be in control. CO would love to regain a hub at DEN (past and present leadership has said as much) and maybe have IAD to relieve some of their EWR operations, but only if Houston was running the show.

This may have also looked more attractive before the open skies agreement as it would have given them heathrow access, which was not available to them - buying slots would be much cheaper than buying UA.
 
roseflyer
Posts: 9606
Joined: Fri Feb 13, 2004 9:34 am

RE: Concerns About UA

Mon Apr 30, 2007 3:33 am

This is just my personal opinion, but I seriously hope that there are not any more large airline mergers. Airfares in the summer can be quite expensive, and more competition will keep the fares lower.
If you have never designed an airplane part before, let the real designers do the work!
 
B757FAN
Posts: 16
Joined: Fri Jun 26, 2009 1:02 pm

RE: Concerns About UA

Mon Apr 30, 2007 4:21 am

I don't foresee a DL / NW merger and even less of a merger between CO / UA. IMHO a much better merger would be DL / AA, and NW / UA. CO and US Air should be the two hung out to dry. I say this because they basically have the same aircraft fleets and it would make it easier as well as more cost effective when it comes to crew scheduling and training. Just my $0.02. Also I have worked for both CO and US Air and both are real pains in the neck to work for / with.
 
VictorKilo
Posts: 170
Joined: Wed Jul 05, 2006 7:39 am

RE: Concerns About UA

Mon Apr 30, 2007 4:40 am

UA may be generating cash now, but I wonder if they are taking the steps they need to take now so that they can remain competitive in the future. On the domestic side, the competition remains fierce. One of UA's strengths is its strong positions in three of the top five metro areas of the US (LA, SF, Chicago), as well as its strong positions at IAD and its major hub at DEN. However, the kind of markets that UA is strong in are also markets where strong LCC competition exists. Looking at the 2006 Q3 O&D, for example, markets where UA competes with WN, FL, B6, or TZ account for 91% of the O&D traffic in markets where UA flies from ORD - not even counting competition from AA. And in DEN, not only can 86% of the O&D traffic choose a nonstop flight on F9, but 45% of the O&D traffic can choose between nonstops on UA, F9, and either WN, FL, or B6. I'm not trying to judge whether UA has it harder than any other major, I'm just saying that the domestic side of UA faces its share of competition.

For me, the most worrisome thing about UA's position is that, post-bankruptcy, they don't seem to have a clear plan for how to better position themselves going forward domestically. Sure, what they were able to do in bankruptcy helped, but UA is not at a place where they can stop improving. I don't see a DL, CO, and to a lesser extent NW strategy of converting domestic capacity to international capacity. I don't see a strategy like AA's of opportunistically removing capacity from the system (such as not renewing the leases on the ex-TW 757's).

UA cannot afford to take the advice of the band Modest Mouse and just float on and hope everything will be OK. If they do, they will find themselves either back in BK (maybe not today, maybe not tomorrow, but soon), or forced into a merger under terms that favor their merger partner.
 
scorpy
Posts: 165
Joined: Sat Dec 23, 2006 6:26 pm

RE: Concerns About UA

Mon Apr 30, 2007 4:45 am

Quoting B757fan (Reply 25):
and NW / UA.

What could they possibly have to gain from this? Fleet commonality is over-rated when you consider the sizes of the fleets of the main american carriers.

Both UA and NW are both weak to south america, the south west of the USA and New York and moderately weak to Europe. They dont' really offer anything of value to each other.

UA and CO have what the other covets, however the price and complexity is likely too high for this to ever happen, not to mention the ego battle of who would be in control.
 
vega
Posts: 1161
Joined: Sat Aug 27, 2005 8:56 am

RE: Concerns About UA

Mon Apr 30, 2007 4:47 am

UA and US (again) - much more favorable political and industry environment than during the prior attempt. IF US goes with the 787 (instead of the A350XWB), this relationship could easily materialize.
We are but a moment in this vast Universe and when gone we will never have existed.
 
deltal1011man
Posts: 4640
Joined: Mon Sep 19, 2005 9:17 am

RE: Concerns About UA

Mon Apr 30, 2007 5:02 am

Quoting B757fan (Reply 25):
I don't foresee a DL / NW merger and even less of a merger between CO / UA. IMHO a much better merger would be DL / AA, and NW / UA. CO and US Air should be the two hung out to dry. I say this because they basically have the same aircraft fleets and it would make it easier as well as more cost effective when it comes to crew scheduling and training. Just my $0.02. Also I have worked for both CO and US Air and both are real pains in the neck to work for / with.

What will DL gain from AA......yes a larger Latin America route map but thats about it(and DL would be back in DFW)
what will DL gain from NW.......The largest (US carrier) in Asia , the largest carrier ion the midwest and a hub in AMS.
Fleets will be worked out if NW is in control i cant tell you if they will go Airbus or Boeing but if DL is in control then they will go all Boeing, so it would be worked out.

Quoting N844AA (Reply 22):

Right, but by all accounts, CO is the better-run airline. They've avoided bankruptcy since the ... pre-Bethune unpleasantness, and have remained solvent since then. Plus employee relations and customer satisfaction have remained strong throughout. Not to say that UA management hasn't done a good job with a difficult situation, but I'd rather see CO's management team take the helm of a combined airline.

CO is a much much better Airline than UA (better run at least(i have be on CO and will be on UA over the summer so ill know then)
New airliners.net web site sucks.
 
ekskycargo370
Posts: 136
Joined: Tue Mar 07, 2006 4:46 am

RE: Concerns About UA

Mon Apr 30, 2007 5:15 am

I can't see UA being around for long,sad but true,ageing fleet,ageing crew,poor service.
 
HighFlight1996
Posts: 16
Joined: Thu Jun 09, 2005 8:53 am

RE: Concerns About UA

Mon Apr 30, 2007 5:36 am

Quoting ATLAaron (Reply 18):
Well I am sure there is passenger discontent, I just find it hard to believe that it is any worse than any other airline. If you hang around A.net long enough there will be a thread with 100+ posts about discontent at AA also.

Agreed, we can all find reasons to complain about any airline. I guess my experience is talking to fellow road warriors in the airports, in line, and with my colleagues. Living in Chicago, with over 3000 of my colleagues who regularly fly from ORD, my discussions have seemed to indicate that AA provides a better overall product than UA.

For those talking about CO, having done 2 years with them, I found their complete product (pricing, service, etc) far better than UA. If I had my dream scenario (AND BEFORE I GET SHOT DOWN, please read that I did say DREAM), CO would buy/merge UA. Then:
- Get rid of UA 733/5 and other fleet simplification steps
- Have some mainline service to LAS/MCO and other big convention destinations, instead of just the TED service
- FAA would take steps to make traffic more manageable in/out of ORD (as well as a few other airports) - there are just too many scheduled flights during certain hours that even in good weather, ORD is not capable of handling
- Simplify fare schedule

But then again, I am just dreaming.
 
Rbgso
Posts: 289
Joined: Thu Jun 29, 2006 11:15 pm

RE: Concerns About UA

Mon Apr 30, 2007 6:19 am

How about a USAir and Alaska Air merger? That looks like it might have a chance. Doesn't help much with trans-Atlantic routes, but the domestic route systems seem complementary.
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: Concerns About UA

Mon Apr 30, 2007 6:46 am

Quoting B757fan (Reply 25):
CO and US Air should be the two hung out to dry. I say this because they basically have the same aircraft fleets and it would make it easier as well as more cost effective when it comes to crew scheduling and training.

Let us see what is wrong with what you said.

#01. US is a strong Airbus carrier.
#02. CO is only Boeing!

So where is this same fleet you speak of?
You can cut the irony with a knife
 
cirrusdriver
Posts: 115
Joined: Thu Nov 23, 2006 1:29 pm

RE: Concerns About UA

Mon Apr 30, 2007 7:49 am

Quoting Rbgso (Reply 32):
How about a USAir and Alaska Air merger?

Oh, dear Lord, please don't. Talk about taking a perfectly good airline (still customer service and overall quality oriented) like AS and merging it with a lousy one like US!
 
ual777
Posts: 1497
Joined: Thu Aug 14, 2003 6:18 am

RE: Concerns About UA

Mon Apr 30, 2007 8:13 am

Quoting EKSkycargo370 (Reply 30):
I can't see UA being around for long,sad but true,ageing fleet,ageing crew,poor service.

Huh? They have positive cash flow, paid down debt by 1.4 billion, and their fleet age is about 12 years old. The crews are getting old but it is the same on every other US legacy carrier. UA lost $80 MILLION due to the Denver storm alone. Throw in the ORD storm and there is the majority of your loss. Further, as long as a positive cash flow is maintained, then the carrier is doing alright for the long-term. As a "Cargo Executive" you should know that.

UA needs to trim management positions and focus on the basics. If their planes are going out 85% full in January, then they must not be that bad.

Is UA's product as good as EKs? Of course not. However on the scale of US legacy carriers, they are certainly better than NW, US, and AA, probably better than DL, and just a shade below CO.
It is always darkest before the sun comes up.
 
mcdu
Posts: 900
Joined: Thu Apr 28, 2005 5:23 am

RE: Concerns About UA

Mon Apr 30, 2007 8:29 am

I am sorry I don't have the source for the following news article but it came from one of the new sites. Anyway, it is my opinion that Tilton is paying down debt to make the company attractive to a purchaser. I don't know if a suitor has been located and this is part of prenup but it is my opinion that Tilton is positioning us to be sold.

The only bright spot I see here is that with the debt being paid down it would indicate Tilton is trying to sell the airline as a whole entity rather than piece out portions of the company. As an employee I would prefer the entire airline being sold instead of parted out.

MCDU
----------------------------------------------------------------------------------------------------------------------------------------------------------

The company generated positive operating cash flow of $626 million, approximately $170 million higher than the comparable period in 2006. During the quarter, the company used cash to pay down $986 million of its original $3 billion exit facility and refinanced the remaining $2 billion. The transaction resulted in reducing net interest costs by $70 million per year, less restrictive covenants and released approximately $2.5 billion of collateral. The company reduced its outstanding debt by an additional $331 million through payments of other scheduled debt maturities. Total on and off balance sheet debt reduction in the quarter was $1.4 billion.
 
flightopsguy
Posts: 299
Joined: Tue Jan 04, 2005 9:51 am

RE: Concerns About UA

Mon Apr 30, 2007 8:53 am

Quoting HighFlight1996 (Reply 31):
FAA would take steps to make traffic more manageable in/out of ORD (as well as a few other airports) - there are just too many scheduled flights during certain hours that even in good weather, ORD is not capable of handling

With OMP (ORD Moderization Program) things will get worse, not better, for the next several years. Ask people in the know about config Plan B and permanent closure of taxiway B.

Flightcaps at ORD are a joke. Check FSM anytime after 17Z and see if there are only 84/hr. Use 1/2 bars for an even better picture. ORD is the most fragile (ATC-wise) it's been since the DSR replacement project a few years ago.
A300-330 BAC111/146/J31/41 B99/1900 CV580 B707-777 DC8/9/10 L188/1011 FH227/28/100 SB340 DO228 EMB2/170 CR2-900 SH330-60
 
floridaflyboy
Posts: 1500
Joined: Sat Jun 03, 2006 3:26 pm

RE: Concerns About UA

Mon Apr 30, 2007 9:23 am

Quoting Rbgso (Reply 32):
How about a USAir and Alaska Air merger?

I don't think this would happen. First of all, Alaska Airlines and US Airways have very very different corporate cultures, and are significantly different operations. Also, Alaska Airlines is a quite successful company and doesn't need to merge.
Good goes around!
 
SkyyMaster
Posts: 1082
Joined: Sun Feb 11, 2007 7:34 am

RE: Concerns About UA

Mon Apr 30, 2007 9:30 am

Quoting DeltaL1011man (Reply 3):
i think that one is going to happen no matter what. UA and CO have wanted to merge as long as DL and NW have wanted to merge. The only problem is who will AA go with? US?

Arrrrghhhh!!!! PLEASE no more merger talk, at least give it a few months break!
 
777fan
Posts: 2256
Joined: Wed Jan 04, 2006 12:09 pm

RE: Concerns About UA

Mon Apr 30, 2007 9:53 am

Quoting Flightopsguy (Reply 37):
With OMP (ORD Moderization Program) things will get worse, not better, for the next several years. Ask people in the know about config Plan B and permanent closure of taxiway B.

I grabbed a nice pic of the north end of the field construction while flying into ORD a week ago last Friday - really gives you an idea of how massive the project is going to be. One thing I won't miss will be flying UA in/out of ORD and departing from 22L; I swear it can take upwards of 45-60 minutes push back, get over there and get into the air.

Having had wonderful experiences with CO on the handful of flights I've taken with the, I'd love to see them snap up UA, so long as the meat and potatoes of UA's route structure (ORD, SFO, LAX, Asia-Pacific) is left as is. If it were to happen, I could see UA's A319/A320 aircraft become a subfleet for a LCC ala Ted.

777fan
DC-8 61/63/71 DC-9-30/50 MD-80/82/83 DC-10-10/30 MD-11 717 721/2 732/3/4/5/G/8/9 741/2/4 752 762/3 777 A306/319/20/33 AT
 
afrikaskyes
Posts: 118
Joined: Sun Sep 04, 2005 10:56 am

RE: Concerns About UA

Mon Apr 30, 2007 10:02 am

Blame it on the swimming pool in UA's backyard.
 
adambrau
Posts: 43
Joined: Sun Mar 25, 2007 11:44 pm

RE: Concerns About UA

Mon Apr 30, 2007 10:07 am

Didn't the Denver storms happen in Decemebr 2006. I think I was flying thru on the 28th and had to re-route via ORD, and that was the second one after the 2 day shut down. So that should have been reflected in the 2006 quarter, not the 1Q07 results the OP was referring too?

Overall it seems there is some solid financial housekeeping at work.

As a 1k million miler sure the service has gotten worse over the years, but UA and partners get me to where I want to go. So many travellers will buy the cheapest fare on any airline and not bother to try to stick to one carrier and accrue elite benefits. Sure it often cost more to fly UA than other carriers, but if more people swallowed that cost and accrued elite flight status they would see their overall experience improve dramatically.

Long live UA!
 
LAXdude1023
Posts: 4453
Joined: Thu Sep 07, 2006 3:16 pm

RE: Concerns About UA

Mon Apr 30, 2007 10:25 am

Quoting Lincoln (Reply 17):
Unless I missed something, UA has wanted to merge with CO, but CO has absoultely no desire to merge with UA.

No, you didnt miss anything. The only time CO has shown any interest is if CO would face too much competition from other mergeing carriers and if CO can still have control in Houston.

Quoting DeltaL1011man (Reply 21):
CO wants to be control just DL wants to be in control if they merge with NW

Yes. And if they did merge, you can bet some of UA's management would get let go and that the HQ would be in Houston not Chicago. Other wise CO would never go for it.

Quoting N844AA (Reply 22):
Right, but by all accounts, CO is the better-run airline.

Yes they are. The only thing that UA is better precence in Asia. The service is much better on CO. With Open Skies coming about, CO really doesnt have that much they could gain from UA. And UA could never mount a campaign like US did for DL because CO is in a very good posisiton, has great upper management, and maintians a good profit.

Bottom line, I dont think we will see CO and UA merge, and I really dont think DL and NW will merge either. UA and US seem to be the only ones who are dying to merge with people.
It is what it is...