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adamblang
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United returns to profitability

Mon Jun 28, 2021 12:20 pm

United expects July to be profitable:

United Airlines expects to post positive income before tax in July

United Airlines Inc said on Monday it expects to generate positive adjusted pre-tax income in July, as bookings pick up as a result of rising COVID-19 vaccination rates.

The carrier said July will be the first month with positive adjusted pre-tax income since January 2020, when the coronavirus crisis started hurting air travel.


In a separate company email this morning, Scott Kirby says today is the first single day where the airline is profitable since the start of the pandemic.

Additional details are in an SEC filing if that’s your idea of a good time.
 
Someone83
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Re: United returns to profitability

Mon Jun 28, 2021 12:25 pm

adamblang wrote:
...positive adjusted pre-tax income in July,


And what did they have to adjust to make it positive?
 
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Midwestindy
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Re: United returns to profitability

Mon Jun 28, 2021 12:28 pm

Someone83 wrote:
adamblang wrote:
...positive adjusted pre-tax income in July,


And what did they have to adjust to make it positive?


"Excludes special charges (credits) and the unrealized gains and losses on investments, the nature of which are not determinable at this time."
ORD & IND

AA & DL
 
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adamblang
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Re: United returns to profitability

Mon Jun 28, 2021 12:30 pm

Someone83 wrote:
And what did they have to adjust to make it positive?

The usual stuff every corporation fiddles with every quarter:
Excludes special charges (credits) and the unrealized gains and losses on investments.


This sounds to me like the normal, everyday profitability people mean when they say “profitable” rather than some weirdo financial wonk number that means nothing to regular people.
 
MIflyer12
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Re: United returns to profitability

Mon Jun 28, 2021 12:36 pm

They are still getting payroll support funds, are they not?
 
hayzel777
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Re: United returns to profitability

Mon Jun 28, 2021 12:43 pm

MIflyer12 wrote:
They are still getting payroll support funds, are they not?

Yes, PSP3 covers payroll till September.
 
jetwet1
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Re: United returns to profitability

Mon Jun 28, 2021 12:58 pm

With the way prices are going I can believe they (along with most airlines) will be US Domestic cash flow positive. International is a different story with some insane bargains still to be had.
 
United1
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Re: United returns to profitability

Mon Jun 28, 2021 12:59 pm

hayzel777 wrote:
MIflyer12 wrote:
They are still getting payroll support funds, are they not?

Yes, PSP3 covers payroll till September.


PSP3 covers part of payroll not 100% of it. We don't have enough information to determine whether that support is included in UAs July numbers. I would just take this as a VERY positive sign that UA (and rest of the US industry) are starting to climb out of this mess.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
tphuang
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Re: United returns to profitability

Mon Jun 28, 2021 1:05 pm

This is great work from UA even if it includes PSP3. Despite the narrative that they cut more than other legacies, they actually are running a large % of their 2019 capacity than DL is for summer time.
 
sxf24
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Re: United returns to profitability

Mon Jun 28, 2021 1:40 pm

MIflyer12 wrote:
They are still getting payroll support funds, are they not?


While this PSP helps cashflow, it does not impact profitability.
 
Dreamflight767
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Re: United returns to profitability

Mon Jun 28, 2021 1:45 pm

Will they be reimbursing us tax payers now?
 
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TVNWZ
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Re: United returns to profitability

Mon Jun 28, 2021 1:50 pm

Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

Will you be giving your checks back?
 
jetmatt777
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Re: United returns to profitability

Mon Jun 28, 2021 1:52 pm

I don’t think it is a coincidence that this is being announced the day before a large aircraft order. Investors and employees would be skeptical of such a huge order without there being some assurance the airline has sound financial footing going forward.
 
SEU
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Re: United returns to profitability

Mon Jun 28, 2021 2:13 pm

I know they might have fudged the numbers, but Its great to see an airline like united being able to do so, with some positive financial news. Lets hope the rest of the struggling airlines follow suit asap and all their staff can stop being worried about the future
 
Rdh3e
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Re: United returns to profitability

Mon Jun 28, 2021 2:20 pm

They can't "fudge" the numbers. This isn't the 90s. The SEC would be all over them for such antics.
 
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adamblang
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Re: United returns to profitability

Mon Jun 28, 2021 2:25 pm

Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

They'll be reimbursing taxpayers on the timeline agreed in the loan package, so not "now" but over the coming months and years...
 
jbs2886
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Re: United returns to profitability

Mon Jun 28, 2021 2:40 pm

adamblang wrote:
Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

They'll be reimbursing taxpayers on the timeline agreed in the loan package, so not "now" but over the coming months and years...


IIRC the payroll support is not a loan. Other aspects of support are loans, but the airlines don’t pay back payroll support.
 
sxf24
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Re: United returns to profitability

Mon Jun 28, 2021 3:16 pm

jbs2886 wrote:
adamblang wrote:
Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

They'll be reimbursing taxpayers on the timeline agreed in the loan package, so not "now" but over the coming months and years...


IIRC the payroll support is not a loan. Other aspects of support are loans, but the airlines don’t pay back payroll support.


Correct. Payroll support is an alternative to unemployment insurance. Without PSP, there would be thousands of airline employees out of work.
 
freeze3192
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Re: United returns to profitability

Mon Jun 28, 2021 3:17 pm

jbs2886 wrote:
adamblang wrote:
Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

They'll be reimbursing taxpayers on the timeline agreed in the loan package, so not "now" but over the coming months and years...


IIRC the payroll support is not a loan. Other aspects of support are loans, but the airlines don’t pay back payroll support.


A simple google search will prove the contrary. The airlines wanted a pure 100% grant but ended with 70% grant 30% loan that has to be paid back.
"A passenger bets his life that his pilot is a worthy heir to an ancient tradition of excellence and professionalism."
 
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janders
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Re: United returns to profitability

Mon Jun 28, 2021 3:27 pm

Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.
"We make war that we may live in peace." -- Aristotle
 
freeze3192
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Re: United returns to profitability

Mon Jun 28, 2021 3:54 pm

janders wrote:
Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.


Seems a bit disingenuous to make the assumption that the payroll support is included in these profit numbers, no?


United1 wrote:
hayzel777 wrote:
MIflyer12 wrote:
They are still getting payroll support funds, are they not?

Yes, PSP3 covers payroll till September.


PSP3 covers part of payroll not 100% of it. We don't have enough information to determine whether that support is included in UAs July numbers. I would just take this as a VERY positive sign that UA (and rest of the US industry) are starting to climb out of this mess.
"A passenger bets his life that his pilot is a worthy heir to an ancient tradition of excellence and professionalism."
 
United1
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Re: United returns to profitability

Mon Jun 28, 2021 4:05 pm

janders wrote:
Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.


As discussed above it's not entirely a handout as UA does have to pay back a portion of the PSP loan. The information UA put out today didn't include a specific breakdown of how they calculated these numbers but PSP just helps with cash flow/cash on hand. In prior results PSP support was not included with revenue, and it wasn't used to reduce salary expense, so if they are being consistent with previous results UA is saying they are actually profitable (pre tax and adjusted special charges ect.)
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
tphuang
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Re: United returns to profitability

Mon Jun 28, 2021 4:14 pm

United1 wrote:
janders wrote:
Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.


As discussed above it's not entirely a handout as UA does have to pay back a portion of the PSP loan. The information UA put out today didn't include a specific breakdown of how they calculated these numbers but PSP just helps with cash flow/cash on hand. In prior results PSP support was not included with revenue, and it wasn't used to reduce salary expense, so if they are being consistent with previous results UA is saying they are actually profitable (pre tax and adjusted special charges ect.)


I saw a tweet from ed Russell that this does factor in the psp loan.
 
United1
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Re: United returns to profitability

Mon Jun 28, 2021 4:19 pm

tphuang wrote:
United1 wrote:
janders wrote:
Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.


As discussed above it's not entirely a handout as UA does have to pay back a portion of the PSP loan. The information UA put out today didn't include a specific breakdown of how they calculated these numbers but PSP just helps with cash flow/cash on hand. In prior results PSP support was not included with revenue, and it wasn't used to reduce salary expense, so if they are being consistent with previous results UA is saying they are actually profitable (pre tax and adjusted special charges ect.)


I saw a tweet from ed Russell that this does factor in the psp loan.


The only folks who know for sure are United. While Ed Russell, The Points Guy, might have an insider source who knows if that source is correct and Ed could also be assuming. There wasn't anything filed with the SEC that shows how they calculated this.

https://twitter.com/ByERussell

So as I said in my first post I would just take this as a sign UA (and the rest of the industry) are starting to climb out of this.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
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LAXintl
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Re: United returns to profitability

Mon Jun 28, 2021 4:22 pm

Per UA Q1 10Q.

U.S. Treasury Department ("Treasury") providing the Company with total funding of approximately $2.6 billion, pursuant to the Payroll Support Program established under Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the "PSP Extension Law"). These funds were used to pay for the wages, salaries and benefits of United employees, including the payment of lost wages, salaries and benefits to returning employees. Approximately $1.9 billion was provided as a direct grant and $753 million as indebtedness evidenced by a 10-year senior unsecured promissory note (the "PSP2 Note"). The Company expects to receive an additional amount of approximately $391 million under the PSP2 Agreement, of which $117 million is expected to be in the form of an unsecured loan.

PSP funds are used to cover payroll expenses (as intended).
About nearly $2.1 bil in funds are straight grants that flow to the bottom line offsetting the companies labor (a huge tailwind).

As an example United's Q1 labor cost was $2.2bil, so it in theory can wipe it all away.
From the desert to the sea, to all of Southern California
 
United1
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Re: United returns to profitability

Mon Jun 28, 2021 4:31 pm

LAXintl wrote:
Per UA Q1 10Q.

U.S. Treasury Department ("Treasury") providing the Company with total funding of approximately $2.6 billion, pursuant to the Payroll Support Program established under Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the "PSP Extension Law"). These funds were used to pay for the wages, salaries and benefits of United employees, including the payment of lost wages, salaries and benefits to returning employees. Approximately $1.9 billion was provided as a direct grant and $753 million as indebtedness evidenced by a 10-year senior unsecured promissory note (the "PSP2 Note"). The Company expects to receive an additional amount of approximately $391 million under the PSP2 Agreement, of which $117 million is expected to be in the form of an unsecured loan.

PSP funds are used to cover payroll expenses (as intended).
About nearly $2.1 bil in funds are straight grants that flow to the bottom line offsetting the companies labor (a huge tailwind).

As an example United's Q1 labor cost was $2.2bil, so it in theory can wipe it all away.


Yup PSP funds were designed to offset labor costs but that isn't how UA (and I think any of the airlines) have accounted for PSP in their books. They don't book PSP as revenue and it doesn't directly change UAs line item labor cost.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
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UPlog
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Re: United returns to profitability

Mon Jun 28, 2021 4:53 pm

A few weeks ago AA also said they were cash positive in May, and would be profitable in July --- but once folks dug deeper its all with the aid of the government money covering their labor bill until September.

For example, AA just received another instalment of PSP funds last week ($1.6bil)
I fly your boxes
 
Dreamflight767
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Re: United returns to profitability

Mon Jun 28, 2021 6:21 pm

TVNWZ wrote:
Dreamflight767 wrote:
Will they be reimbursing us tax payers now?

Will you be giving your checks back?


-Didn't ask for one.
-Didn't get one.
-& come tax time, I'll be forking out my yearly amount - just like I do every pay check and did in April 2020.

UAL's (and all other companies) turn.
 
MIflyer12
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Re: United returns to profitability

Mon Jun 28, 2021 6:39 pm

UPlog wrote:
A few weeks ago AA also said they were cash positive in May, and would be profitable in July --- but once folks dug deeper its all with the aid of the government money covering their labor bill until September.

For example, AA just received another instalment of PSP funds last week ($1.6bil)

I believe the grant amounts are consistent thru 3Q21, and as LAXintl points out, it's easy enough to find grants by carrier and pro-rate for a month. The quarterly 8-K and 10-Q filings will have the specific grant values to show profitability on their own.

IMHO that headline is like a guy bragging he's 6 foot eight, neglecting to mention he's standing on a 12" tall box.
 
ordbosewr
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Re: United returns to profitability

Mon Jun 28, 2021 7:05 pm

janders wrote:
Seems a bit disingenuous to make a PR headline when a good portion of your labor expense is being covered by a government handout.


I don't see any PR associated to this.
What started this thread was an SEC filing. I think UA is supposed to file material information before making the statements publicly.

I have never seen an SEC filing described as PR. It must be accurate or else the executives could go to jail. The same cannot be said about a press release.
 
n9801f
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Re: United returns to profitability

Mon Jun 28, 2021 7:48 pm

Congratulations to United. Very well done.

United acted very responsibly and effectively and took hard decisions to minimize losses. Its financial performance was the envy of the industry.

To me, this is what true leadership looks like.
 
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LAXintl
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Re: United returns to profitability

Mon Jun 28, 2021 7:53 pm

ordbosewr wrote:
I have never seen an SEC filing described as PR. It must be accurate or else the executives could go to jail. The same cannot be said about a press release.


You realize fluff press releases are at times submitted as part of SEC filings right? Its not all black and white numbers, so yes fluff and bravado words make it into SEC filings.
From the desert to the sea, to all of Southern California
 
majano
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Re: United returns to profitability

Mon Jun 28, 2021 8:06 pm

Talk about counting your chickens before they hatch! And graciously accepting the congratulations for it too.
 
jayunited
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Re: United returns to profitability

Mon Jun 28, 2021 8:18 pm

LAXintl wrote:
ordbosewr wrote:
I have never seen an SEC filing described as PR. It must be accurate or else the executives could go to jail. The same cannot be said about a press release.


You realize fluff press releases are at times submitted as part of SEC filings right? Its not all black and white numbers, so yes fluff and bravado words make it into SEC filings.


United statement in their SEC filing is straight forward I don't see the fluff in stating the company expects to positive adjusted pre-tax in July. There is no question the PSP funds is helping United reach this point just like it helped Southwest turn a profit in Q1.

If you were United how would you have written phrased the paragraph in their SEC filing that talks about pre-tax profit. Just to compare below is a copy and paste of United's actual SEC statement. How would you have worded your release to make sure there is no fluff?

"tem 7.01 Regulation FD Disclosure.
United Airlines, Inc. ("United"), a wholly-owned subsidiary of United Airlines Holdings, Inc. ("UAL" and, together with United, the "Company"), expectsto generate positive adjusted pre-tax income in the month of July 2021, which would be the first month with positive adjusted pre-tax income sinceJanuary 2020, before the start of the crisis. The COVID-19 pandemic caused the most severe drop in demand for travel in the history of aviation and thisexpected performance would mark an important financial milestone as the Company is turning its focus to the future of United Airlines.The information in this Item 7.01 is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any registration statementor other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
"

file:///C:/Users/u216009/AppData/Local/Temp/0000100517-21-000034.pdf

The fluffy headlines that have been written are the equivalent of pouring salt in an open wound because of PSP funds but United's SEC statement I don't see the fluff.
 
WidebodyPTV
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Re: United returns to profitability

Mon Jun 28, 2021 8:25 pm

sxf24 wrote:
Correct. Payroll support is an alternative to unemployment insurance. Without PSP, there would be thousands of airline employees out of work.


It's a far more expensive alterative to unemployment insurance. Even with the additional monies and time, unemployment payments are completely dwarfed by the paychecks and benefits most airline employees get. Not to mention that American taxpayers are paying for these handouts, whereas businesses pay unemployment insurance premiums that would cover a large portion of what's been handed out...
 
n9801f
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Re: United returns to profitability

Mon Jun 28, 2021 9:41 pm

[threeid][/threeid]
LAXintl wrote:
ordbosewr wrote:
I have never seen an SEC filing described as PR. It must be accurate or else the executives could go to jail. The same cannot be said about a press release.


You realize fluff press releases are at times submitted as part of SEC filings right? Its not all black and white numbers, so yes fluff and bravado words make it into SEC filings.

Fair point.

However throughout the pandemic, United had a record of better financial results. By far the best among the legacies.

From the start United acted firmly and decisively, cutting sooner and deeper than others.

Not talk. Action. Results.
 
IFlyOff
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Re: United returns to profitability

Tue Jun 29, 2021 2:29 am

WidebodyPTV wrote:
sxf24 wrote:
Correct. Payroll support is an alternative to unemployment insurance. Without PSP, there would be thousands of airline employees out of work.


It's a far more expensive alterative to unemployment insurance. Even with the additional monies and time, unemployment payments are completely dwarfed by the paychecks and benefits most airline employees get. Not to mention that American taxpayers are paying for these handouts, whereas businesses pay unemployment insurance premiums that would cover a large portion of what's been handed out...



This is spot on. Airlines must have had better government lobbyists than other industries.
 
jetmatt777
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Re: United returns to profitability

Tue Jun 29, 2021 3:24 am

WidebodyPTV wrote:
sxf24 wrote:
Correct. Payroll support is an alternative to unemployment insurance. Without PSP, there would be thousands of airline employees out of work.


It's a far more expensive alterative to unemployment insurance. Even with the additional monies and time, unemployment payments are completely dwarfed by the paychecks and benefits most airline employees get. Not to mention that American taxpayers are paying for these handouts, whereas businesses pay unemployment insurance premiums that would cover a large portion of what's been handed out...


Are you saying the airlines have not been paying unemployment insurance?

Most other industries have been able to adapt. Restaurants shifted to to-go and delivery. Retailers switched to curbside pickup. Not saying it was easy on them, but they had alternatives. There is very little alternative for the airlines when the government shuts down basically all avenues for revenue, globally. It’s hardly a fair comparison, as aviation is one of the most highly regulated environments to operate a business in. The airlines literally had no choice in the matter. When the global demand environment is artificially shut off due to government intervention, it is only fair for that government to assist if possible. Many businesses were able to adapt, and the airlines did the best they could by shifting into the freight business with their passenger fleet. But there is only so much freight. The airlines are not built to switch to a FedEx model overnight, or even over months.

Call it a handout. Call it a bailout. But letting entire industries collapse is not good for anybody. Other industries also received grants and loans, as well as mass assistance from their local communities in the form of tax forgiveness, relaxed rent, local grants, etc.

Not one US airline would have survived this without government intervention. Southwest might have been able to just because they had more cash on hand, but they were sweating bullets too.

For an aviation website, the membership really seems to fantasize the idea of entire airlines going bankrupt and their fleets of hundreds of airplanes getting sent to a desert while their 100k employees each line up for food at the local homeless shelter. I am thankful the government stepped in. That’s why we pay taxes.
 
Silver1SWA
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Re: United returns to profitability

Tue Jun 29, 2021 4:27 am

jetmatt777 wrote:
WidebodyPTV wrote:
sxf24 wrote:
Correct. Payroll support is an alternative to unemployment insurance. Without PSP, there would be thousands of airline employees out of work.


It's a far more expensive alterative to unemployment insurance. Even with the additional monies and time, unemployment payments are completely dwarfed by the paychecks and benefits most airline employees get. Not to mention that American taxpayers are paying for these handouts, whereas businesses pay unemployment insurance premiums that would cover a large portion of what's been handed out...


Are you saying the airlines have not been paying unemployment insurance?

Most other industries have been able to adapt. Restaurants shifted to to-go and delivery. Retailers switched to curbside pickup. Not saying it was easy on them, but they had alternatives. There is very little alternative for the airlines when the government shuts down basically all avenues for revenue, globally. It’s hardly a fair comparison, as aviation is one of the most highly regulated environments to operate a business in. The airlines literally had no choice in the matter. When the global demand environment is artificially shut off due to government intervention, it is only fair for that government to assist if possible. Many businesses were able to adapt, and the airlines did the best they could by shifting into the freight business with their passenger fleet. But there is only so much freight. The airlines are not built to switch to a FedEx model overnight, or even over months.

Call it a handout. Call it a bailout. But letting entire industries collapse is not good for anybody. Other industries also received grants and loans, as well as mass assistance from their local communities in the form of tax forgiveness, relaxed rent, local grants, etc.

Not one US airline would have survived this without government intervention. Southwest might have been able to just because they had more cash on hand, but they were sweating bullets too.

For an aviation website, the membership really seems to fantasize the idea of entire airlines going bankrupt and their fleets of hundreds of airplanes getting sent to a desert while their 100k employees each line up for food at the local homeless shelter. I am thankful the government stepped in. That’s why we pay taxes.


It makes my head hurt thinking about how much worse this summer would be if the dominos weren’t propped up until demand came roaring back.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
MohawkWeekend
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Re: United returns to profitability

Tue Jun 29, 2021 11:53 am

I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.
    300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
     
    nkops
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    Re: United returns to profitability

    Tue Jun 29, 2021 12:30 pm

    MohawkWeekend wrote:
    I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

    The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.


    You have more faith in our government than I do I guess..

    Didn't the airlines who reported profits last quarter also include the PSP money? Why is this different
    Turn left heading 080 contact departure
     
    United1
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    Re: United returns to profitability

    Tue Jun 29, 2021 12:35 pm

    MohawkWeekend wrote:
    I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

    The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.


    The government has warrants for stock in UA (and all of the airlines that took PSP.) The government can exercise those warrants if they want too.
    I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
     
    rj777
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    Re: United returns to profitability

    Tue Jun 29, 2021 12:53 pm

    They better be profitable... they just ordered 200 new airplanes!
     
    MohawkWeekend
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    Re: United returns to profitability

    Tue Jun 29, 2021 1:02 pm

    United1 wrote:
    MohawkWeekend wrote:
    I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

    The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.


    The government has warrants for stock in UA (and all of the airlines that took PSP.) The government can exercise those warrants if they want too.



    What is the cost of the warrants? We (the taxpayers) already gave them the money so they should be about $1 a share. UAL has a capitalization of just over $16 Billion. United got $5 billion or so? The Tax payers should own a third of this company. That's the deal Warren Buffett would have made.
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      United1
      Posts: 4284
      Joined: Wed Oct 08, 2003 9:21 am

      Re: United returns to profitability

      Tue Jun 29, 2021 1:19 pm

      MohawkWeekend wrote:
      United1 wrote:
      MohawkWeekend wrote:
      I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

      The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.


      The government has warrants for stock in UA (and all of the airlines that took PSP.) The government can exercise those warrants if they want too.



      What is the cost of the warrants? We (the taxpayers) already gave them the money so they should be about $1 a share. UAL has a capitalization of just over $16 Billion. United got $5 billion or so? The Tax payers should own a third of this company. That's the deal Warren Buffett would have made.


      UAs is at $31.50…

      You might want to temper your outrage a bit by realizing the tax payers would have been on the hook for unemployment if PSP hadn’t happened.

      https://home.treasury.gov/policy-issues ... m-payments
      I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
       
      MohawkWeekend
      Posts: 840
      Joined: Tue Jan 08, 2019 2:06 pm

      Re: United returns to profitability

      Tue Jun 29, 2021 1:33 pm

      Right - so the US should be able to buy a share of UAL today at $1. That's exactly what Warren Buffet would have done.
      Why in the world airlines are getting payroll support on June 29th is beyond me.

      The entire PSP program was riddled with winners and losers. Airlines were big time winners - and for example auto rental companies were not. There is no way UI payments would have come even close to the aid airlines got. Twice in 20 years US taxpayers have bailed out the airline industry. It's going to happen again - shouldn't we have a plan? How's it going to look when the airline CEO's go back to their $30 mil a year compensation during the 19 good years between disasters?
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        MohawkWeekend
        Posts: 840
        Joined: Tue Jan 08, 2019 2:06 pm

        Re: United returns to profitability

        Tue Jun 29, 2021 4:29 pm

        I want to add that it's not helping the employees of the airlines that is the most upsetting. It's the holders of United stock who really made out in this deal.
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          User avatar
          Polot
          Posts: 12067
          Joined: Thu Jul 28, 2011 3:01 pm

          Re: United returns to profitability

          Tue Jun 29, 2021 4:40 pm

          MohawkWeekend wrote:
          I want to add that it's not helping the employees of the airlines that is the most upsetting. It's the holders of United stock who really made out in this deal.

          How is it not helping the employees? You realize the purpose of the funds is to ensure that most employees were still getting a paycheck for the last 18 months? Without the payroll grant you would have seen mass firings/furloughs.

          You can argue whether the government should have granted those funds, but to suggest employees don’t benefit from payroll support is well, asinine.
           
          MIflyer12
          Posts: 9856
          Joined: Mon Feb 18, 2013 11:58 pm

          Re: United returns to profitability

          Tue Jun 29, 2021 5:04 pm

          MohawkWeekend wrote:
          United1 wrote:
          MohawkWeekend wrote:
          I just want airline employees and management to remember this when they argue "we're in the business to make money not operate flights to ....."

          The Govt should have been given stock for this aid like they did with the automakers. The US Treasury and the Federal Reserve need to have a better plan when this happens again - and it will.


          The government has warrants for stock in UA (and all of the airlines that took PSP.) The government can exercise those warrants if they want too.



          What is the cost of the warrants? We (the taxpayers) already gave them the money so they should be about $1 a share. UAL has a capitalization of just over $16 Billion. United got $5 billion or so? The Tax payers should own a third of this company. That's the deal Warren Buffett would have made.

          The U.S. doesn't have much stomach for nationalizing firms or industries on the mainstream sides of either aisle. (No, Bernie and AOC don't count.)

          Yes, the PSP grants vastly exceeded what airline employees would have qualified for under state UI systems. How does $275/week for a max 19 weeks sound to an AA pilot based in MIA? Were said pilot based ed in NC (s)he would qualify for $350/week -- but a max of 16 weeks.

          Even with experience rating - tying company UI premiums to number of people they've laid off historically- lots of industries underpay for the number of layoffs they generate.

          IMHO the government could have asked for a lot more (warrants, consumer protections) than it did. I wrote to Rep. Peter DeFazio, chair of House Transportation and Infrastructure, and gave him a list. Anybody else? :D
           
          sUAisDL
          Posts: 13
          Joined: Sat May 29, 2021 9:57 pm

          Re: United returns to profitability

          Tue Jun 29, 2021 5:11 pm

          n9801f wrote:
          Congratulations to United. Very well done.

          United acted very responsibly and effectively and took hard decisions to minimize losses. Its financial performance was the envy of the industry.

          To me, this is what true leadership looks like.


          Agreed. Hoping DL is not too far behind.

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