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Joined: Sat Apr 28, 2001 1:48 am

United's Finances Downgraded To

Fri Jun 01, 2001 12:40 am

As you may or may not know, Moody's investment rating service recently downgraded UA's debt (approx. 12.9b) to "junk" status.

What does this mean? Essentially, UA's borrowing costs will be higher, so growth once again is thwarted at the airline. Don't expect very many aircraft orders, or other cost-inducing initiatives, until United is back on the financially stable bandwagon.

This is sad.

Now the only two airlines to retain "investment grade" status (not "junk") are AA and DL.

One of the primary objectives of Greenwald under his financially prudent and conservative tenure was to re-attain an investment-grade status, precisely so it could fuel more growth in the future, and so that it could keep up --financially-- with AA and DL. It was a hard goal to accomplish, but thanks to UA's massive profits in the mid-late 90s, it happened.

And now, all that progress is for naught. Thanks Goodwin, you are filling up Greenwald's shoes quite nicely-- with red ink. =(