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MohawkWeekend
Posts: 1089
Joined: Tue Jan 08, 2019 2:06 pm

Re: United returns to profitability

Tue Jun 29, 2021 6:21 pm

Polot wrote:
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.


How do you get to I inferred that the airline employees didn't benefit from their payroll being paid by US taxpayers ? Airline employees probably benefited more from payroll support than any other industry in America. I must have said that about 3 times. My real issue is in protecting the shareholders of United and all the airlines from the true loss in stock value. Issuing new stock in exchange for the PSP loans would have accomplished that.
 
WidebodyPTV
Posts: 755
Joined: Fri Sep 20, 2019 9:06 pm

Re: United returns to profitability

Tue Jun 29, 2021 6:52 pm

jetmatt777 wrote:
Are you saying the airlines have not been paying unemployment insurance?


No, I did not. I said that typically, unemployment insurance benefits are covered by employer premiums. Unemployment benefits vary by state, but are typically include a limited amount of cash that lasts for a specified period of time. The government has provided a supplemental benefit and additional time, but for many, these payments are far shy of their normal compensation (which includes benefits). In the airlines' case, the government provided enough cash so that a senior captain could collect his $400K salary + full benefits. Had he been on unemployment, at the peak of the supplemental pay, he may have collected $26K, with no benefits. Big difference.

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.


Absurd. Those "alternatives" were hardly enough -- tens of thousands of restaurants have permanently shuttered, and projections are that ultimately two-thirds of the restaurants that existed pre-COVID will go out of business. The PPP funding they received was barely a fraction of the airline industry's bailout (heck, most didn't even qualify for PPP funding). COVID caused havoc in oodles of other industries, including entertainment, retail, etc, as well as oodles of businesses that directly relied on these industries (for example, financial firms that specialized in the entertainment industry). And while the airline industry is rebounding, the fallout for many of these businesses is just beginning. For example, many of these establishments are relying on local legislation that required rent reprieves... but that bill is coming, and many businesses will simply cease to exis.

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.


Ridiculous. The industry would've shrunk, but it would've survived. And there's a general labor shortage -- most everybody would've been able to find similar paying jobs in other industries. Instead, we have legacies adding long-haul flights that will hemorrhage cash simply so they can get a leg up on the competition. But hey, the government's paying for it, so it's okay! Remember all those nasty threads about the subsidies the ME3 received? Guess when the shoe's on the other foot, it's perfectly fine!

Meanwhile, we have real problems -- including an actual homeless crisis -- that need addressed, but I'm glad my tax dollars will go hard at work so a senior pilot making $400K can take 20 passengers across the pond today. Poor guy couldn't otherwise feed his family!
 
Cactusjuba
Posts: 287
Joined: Thu Dec 14, 2017 8:06 am

Re: United returns to profitability

Tue Jun 29, 2021 7:29 pm

sUAisDL wrote:
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.


DL stated that in June they'll turn a profit. So they're ahead of UA here.

The big disparity in 2020 "losses" by DL was accounting tactics, paper losses. Mostly writing off airplanes (many they plan to retire in 5 years), equity in JVs...ie no actual loss of cash. But this tactic avoids taxes and helps pump up future earnings numbers.
 
n9801f
Posts: 476
Joined: Tue Apr 13, 2004 8:29 am

Re: United returns to profitability

Tue Jun 29, 2021 7:49 pm

Cactusjuba wrote:
sUAisDL wrote:
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.


DL stated that in June they'll turn a profit. So they're ahead of UA here.

The big disparity in 2020 "losses" by DL was accounting tactics, paper losses. Mostly writing off airplanes (many they plan to retire in 5 years), equity in JVs...ie no actual loss of cash. But this tactic avoids taxes and helps pump up future earnings numbers.

Not necessarily.

To make an accurate comparison, you'd need to know what metric each is using. Operating? Net before Taxes, Net, or other?

We'll probably never know for sure as quarterly financial updates rarely give detail by month.

For two reasons, I think United is likely to be ahead:

1) it's recovering from much shallower losses, so it didn't have as far to go
2) sharp seasonality - it usually does very well in summer
 
LCDFlight
Posts: 1374
Joined: Wed Jan 01, 2020 9:22 pm

Re: United returns to profitability

Tue Jun 29, 2021 8:01 pm

WidebodyPTV wrote:
jetmatt777 wrote:
Are you saying the airlines have not been paying unemployment insurance?


No, I did not. I said that typically, unemployment insurance benefits are covered by employer premiums. Unemployment benefits vary by state, but are typically include a limited amount of cash that lasts for a specified period of time. The government has provided a supplemental benefit and additional time, but for many, these payments are far shy of their normal compensation (which includes benefits). In the airlines' case, the government provided enough cash so that a senior captain could collect his $400K salary + full benefits. Had he been on unemployment, at the peak of the supplemental pay, he may have collected $26K, with no benefits. Big difference.

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.


Absurd. Those "alternatives" were hardly enough -- tens of thousands of restaurants have permanently shuttered, and projections are that ultimately two-thirds of the restaurants that existed pre-COVID will go out of business. The PPP funding they received was barely a fraction of the airline industry's bailout (heck, most didn't even qualify for PPP funding). COVID caused havoc in oodles of other industries, including entertainment, retail, etc, as well as oodles of businesses that directly relied on these industries (for example, financial firms that specialized in the entertainment industry). And while the airline industry is rebounding, the fallout for many of these businesses is just beginning. For example, many of these establishments are relying on local legislation that required rent reprieves... but that bill is coming, and many businesses will simply cease to exis.

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.


Ridiculous. The industry would've shrunk, but it would've survived. And there's a general labor shortage -- most everybody would've been able to find similar paying jobs in other industries. Instead, we have legacies adding long-haul flights that will hemorrhage cash simply so they can get a leg up on the competition. But hey, the government's paying for it, so it's okay! Remember all those nasty threads about the subsidies the ME3 received? Guess when the shoe's on the other foot, it's perfectly fine!

Meanwhile, we have real problems -- including an actual homeless crisis -- that need addressed, but I'm glad my tax dollars will go hard at work so a senior pilot making $400K can take 20 passengers across the pond today. Poor guy couldn't otherwise feed his family!


Totally agree, the industry got a ridiculous bailout. The industry would survive even if Chapter 11 occurred. I have been there and done that. The government's favoritism toward airlines, at everyone else's expense, was completely bizarre. Your post is not an exaggeration.
 
Cactusjuba
Posts: 287
Joined: Thu Dec 14, 2017 8:06 am

Re: United returns to profitability

Tue Jun 29, 2021 8:37 pm

n9801f wrote:
Cactusjuba wrote:
sUAisDL wrote:

Agreed. Hoping DL is not too far behind.


DL stated that in June they'll turn a profit. So they're ahead of UA here.

The big disparity in 2020 "losses" by DL was accounting tactics, paper losses. Mostly writing off airplanes (many they plan to retire in 5 years), equity in JVs...ie no actual loss of cash. But this tactic avoids taxes and helps pump up future earnings numbers.

Not necessarily.

To make an accurate comparison, you'd need to know what metric each is using. Operating? Net before Taxes, Net, or other?

We'll probably never know for sure as quarterly financial updates rarely give detail by month.

For two reasons, I think United is likely to be ahead:

1) it's recovering from much shallower losses, so it didn't have as far to go
2) sharp seasonality - it usually does very well in summer


Average daily cash burn was lower month by month at DL compared to UA. I'm not sure of a month that this wasn't the case. If all you're looking at is quarterly losses to say "DL lost 12B and UA lost 8B, so DL was bleeding a lot more than UA", your ignoring the 'how & 'why. What made Delta lose 4B more if they were burning less cash from operations compared to UA?

Answer: They carried forward 2.2B in depreciation value for fleets with a future retirement like CRJ200s, 767s. Also the value of retiring MD90s, 777s, 737s and A320s. That wasn't a loss of cash, just equity. Another 2B+ write-off of equity in LATAM/Aeromexico/Virgin. No cash loss. Another 3B in "restructuring" of early retirements (much of these costs are dispersed over time via benefits). Why do this? Consolidate the paper losses in the crisis, then they are clear of the books in the future. Avoid Federal income tax for many years. DL still has lower debt and reached profitablity this month. Back to buying new jets in cash. That being said, UA has done a tremendous job with their finances, and I think have upward trajectory.
Last edited by Cactusjuba on Tue Jun 29, 2021 8:44 pm, edited 1 time in total.
 
WidebodyPTV
Posts: 755
Joined: Fri Sep 20, 2019 9:06 pm

Re: United returns to profitability

Tue Jun 29, 2021 8:43 pm

Cactusjuba wrote:
sUAisDL wrote:
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.


DL stated that in June they'll turn a profit. So they're ahead of UA here.

The big disparity in 2020 "losses" by DL was accounting tactics, paper losses. Mostly writing off airplanes (many they plan to retire in 5 years), equity in JVs...ie no actual loss of cash. But this tactic avoids taxes and helps pump up future earnings numbers.


No, it’s not. DL, like UA, has been referring to profitability as to when it will be cash positive because that’s what investors care about.
 
User avatar
Polot
Posts: 12431
Joined: Thu Jul 28, 2011 3:01 pm

Re: United returns to profitability

Tue Jun 29, 2021 8:58 pm

Cactusjuba wrote:
n9801f wrote:
Cactusjuba wrote:

DL stated that in June they'll turn a profit. So they're ahead of UA here.

The big disparity in 2020 "losses" by DL was accounting tactics, paper losses. Mostly writing off airplanes (many they plan to retire in 5 years), equity in JVs...ie no actual loss of cash. But this tactic avoids taxes and helps pump up future earnings numbers.

Not necessarily.

To make an accurate comparison, you'd need to know what metric each is using. Operating? Net before Taxes, Net, or other?

We'll probably never know for sure as quarterly financial updates rarely give detail by month.

For two reasons, I think United is likely to be ahead:

1) it's recovering from much shallower losses, so it didn't have as far to go
2) sharp seasonality - it usually does very well in summer


Average daily cash burn was lower month by month at DL compared to UA. I'm not sure of a month that this wasn't the case. If all you're looking at is quarterly losses to say "DL lost 12B and UA lost 8B, so DL was bleeding a lot more than UA", your ignoring the 'how & 'why. What made Delta lose 4B more if they were burning less cash from operations compared to UA?

Answer: They carried forward 2.2B in depreciation value for fleets with a future retirement like CRJ200s, 767s. Also the value of retiring MD90s, 777s, 737s and A320s. That wasn't a loss of cash, just equity. Another 2B+ write-off of equity in LATAM/Aeromexico/Virgin. No cash loss. Another 3B in "restructuring" of early retirements (much of these costs are dispersed over time via benefits). Why do this? Consolidate the paper losses in the crisis, then they are clear of the books in the future. Avoid Federal income tax for many years. DL still has lower debt and reached profitablity this month. Back to buying new jets in cash. That being said, UA has done a tremendous job with their finances, and I think have upward trajectory.

Be careful with what daily cash burn numbers you use, they are not universal and standardize. DL, for example, does not include debt servicing in their daily cash burn while UA does (DL prefers to look at daily cash burn through a strictly operations lens). Delta is still paying money servicing their debt just like UA though.
 
Cactusjuba
Posts: 287
Joined: Thu Dec 14, 2017 8:06 am

Re: United returns to profitability

Tue Jun 29, 2021 9:15 pm

Polot wrote:
Cactusjuba wrote:
n9801f wrote:
Not necessarily.

To make an accurate comparison, you'd need to know what metric each is using. Operating? Net before Taxes, Net, or other?

We'll probably never know for sure as quarterly financial updates rarely give detail by month.

For two reasons, I think United is likely to be ahead:

1) it's recovering from much shallower losses, so it didn't have as far to go
2) sharp seasonality - it usually does very well in summer


Average daily cash burn was lower month by month at DL compared to UA. I'm not sure of a month that this wasn't the case. If all you're looking at is quarterly losses to say "DL lost 12B and UA lost 8B, so DL was bleeding a lot more than UA", your ignoring the 'how & 'why. What made Delta lose 4B more if they were burning less cash from operations compared to UA?

Answer: They carried forward 2.2B in depreciation value for fleets with a future retirement like CRJ200s, 767s. Also the value of retiring MD90s, 777s, 737s and A320s. That wasn't a loss of cash, just equity. Another 2B+ write-off of equity in LATAM/Aeromexico/Virgin. No cash loss. Another 3B in "restructuring" of early retirements (much of these costs are dispersed over time via benefits). Why do this? Consolidate the paper losses in the crisis, then they are clear of the books in the future. Avoid Federal income tax for many years. DL still has lower debt and reached profitablity this month. Back to buying new jets in cash. That being said, UA has done a tremendous job with their finances, and I think have upward trajectory.

Be careful with what daily cash burn numbers you use, they are not universal and standardize. DL, for example, does not include debt servicing in their daily cash burn while UA does (DL prefers to look at daily cash burn through a strictly operations lens). Delta is still paying money servicing their debt just like UA though.


Correct. And precisely my point.

Airlines play games with financial reporting. You can't rely on headlines to determine financial health, you have to dig into their reports to understand. The claim that DL lost 50% more during COVID than UA, therefore did a poor job handling COVID is superficial, and mostly false.

UA will retire older CRJs, 757s, A320s, 777s etc in the coming years. In the quarters they do, they will write-off the value of these aircraft. DL just did it all at once in 2020 for basically all the aircraft they expect to retire within 5 years. But you have folks reading the headline and think "Wow DL lost billions more than airline XYZ, they are really struggling over there".
 
panamair
Posts: 4475
Joined: Fri Oct 12, 2001 2:24 am

Re: United returns to profitability

Tue Jun 29, 2021 9:18 pm

n9801f wrote:
To make an accurate comparison, you'd need to know what metric each is using. Operating? Net before Taxes, Net, or other?


It’s pre-tax for June. It was mentioned in an industry investor presentation in early June.
 
User avatar
Polot
Posts: 12431
Joined: Thu Jul 28, 2011 3:01 pm

Re: United returns to profitability

Tue Jun 29, 2021 9:22 pm

Cactusjuba wrote:
Polot wrote:
Cactusjuba wrote:

Average daily cash burn was lower month by month at DL compared to UA. I'm not sure of a month that this wasn't the case. If all you're looking at is quarterly losses to say "DL lost 12B and UA lost 8B, so DL was bleeding a lot more than UA", your ignoring the 'how & 'why. What made Delta lose 4B more if they were burning less cash from operations compared to UA?

Answer: They carried forward 2.2B in depreciation value for fleets with a future retirement like CRJ200s, 767s. Also the value of retiring MD90s, 777s, 737s and A320s. That wasn't a loss of cash, just equity. Another 2B+ write-off of equity in LATAM/Aeromexico/Virgin. No cash loss. Another 3B in "restructuring" of early retirements (much of these costs are dispersed over time via benefits). Why do this? Consolidate the paper losses in the crisis, then they are clear of the books in the future. Avoid Federal income tax for many years. DL still has lower debt and reached profitablity this month. Back to buying new jets in cash. That being said, UA has done a tremendous job with their finances, and I think have upward trajectory.

Be careful with what daily cash burn numbers you use, they are not universal and standardize. DL, for example, does not include debt servicing in their daily cash burn while UA does (DL prefers to look at daily cash burn through a strictly operations lens). Delta is still paying money servicing their debt just like UA though.


Correct. And precisely my point.

Airlines play games with financial reporting. You can't rely on headlines to determine financial health, you have to dig into their reports to understand. The claim that DL lost 50% more during COVID than UA, therefore did a poor job handling COVID is superficial, and mostly false.

UA will retire older CRJs, 757s, A320s, 777s etc in the coming years. In the quarters they do, they will write-off the value of these aircraft. DL just did it all at once in 2020 for basically all the aircraft they expect to retire within 5 years. But you have folks reading the headline and think "Wow DL lost billions more than airline XYZ, they are really struggling over there".

Most of DL’s big ticket write offs have been foreign investments and early buyouts/retirement packages. 20-30 year old aircraft like those 757s, A320s, 777s UA will be retiring are not carrying a lot of value on the books that need to be written off. That’s one of the advantages of older aircraft.
 
WidebodyPTV
Posts: 755
Joined: Fri Sep 20, 2019 9:06 pm

Re: United returns to profitability

Wed Jun 30, 2021 1:22 am

Polot wrote:
Cactusjuba wrote:
Polot wrote:
Be careful with what daily cash burn numbers you use, they are not universal and standardize. DL, for example, does not include debt servicing in their daily cash burn while UA does (DL prefers to look at daily cash burn through a strictly operations lens). Delta is still paying money servicing their debt just like UA though.


Correct. And precisely my point.

Airlines play games with financial reporting. You can't rely on headlines to determine financial health, you have to dig into their reports to understand. The claim that DL lost 50% more during COVID than UA, therefore did a poor job handling COVID is superficial, and mostly false.

UA will retire older CRJs, 757s, A320s, 777s etc in the coming years. In the quarters they do, they will write-off the value of these aircraft. DL just did it all at once in 2020 for basically all the aircraft they expect to retire within 5 years. But you have folks reading the headline and think "Wow DL lost billions more than airline XYZ, they are really struggling over there".

Most of DL’s big ticket write offs have been foreign investments and early buyouts/retirement packages. 20-30 year old aircraft like those 757s, A320s, 777s UA will be retiring are not carrying a lot of value on the books that need to be written off. That’s one of the advantages of older aircraft.


These are non-cash items, they're irreverent. When the airlines are discussing their return to profitability, they're referring to being cash positive -- e.g. the point at which they'll be taking in more revenue than they'll be spending.
 
Cactusjuba
Posts: 287
Joined: Thu Dec 14, 2017 8:06 am

Re: United returns to profitability

Wed Jun 30, 2021 3:17 am

Carry forward losses and accellerated depreciation. That explains, by far, the disparity in "losses" post pandemic between the UA & DL. The loss of real dollar :twocents: was very similar, however.

https://liveandletsfly.com/delta-corporate-taxes/
https://en.m.wikipedia.org/wiki/Acceler ... preciation

PRASM is hard to compare when DL had 50%, then 60%, 70%, etc seat block. Net passenger revenues were close due to higher yields, but they had to fly more metal than UA, and thus lowest PRASM. That era is over, but wont be fully visable until 3Q results.
 
n9801f
Posts: 476
Joined: Tue Apr 13, 2004 8:29 am

Re: United returns to profitability

Wed Jun 30, 2021 5:14 am

WidebodyPTV wrote:
These are non-cash items, they're irreverent.

(Bolding mine)

Spell check gets us all from time to time. Forgive me.

Hopefully these contemptuous items will soon be replaced with something more respectful!
 
panamair
Posts: 4475
Joined: Fri Oct 12, 2001 2:24 am

Re: United returns to profitability

Wed Jun 30, 2021 5:57 am

WidebodyPTV wrote:
Polot wrote:
Cactusjuba wrote:

Correct. And precisely my point.

Airlines play games with financial reporting. You can't rely on headlines to determine financial health, you have to dig into their reports to understand. The claim that DL lost 50% more during COVID than UA, therefore did a poor job handling COVID is superficial, and mostly false.

UA will retire older CRJs, 757s, A320s, 777s etc in the coming years. In the quarters they do, they will write-off the value of these aircraft. DL just did it all at once in 2020 for basically all the aircraft they expect to retire within 5 years. But you have folks reading the headline and think "Wow DL lost billions more than airline XYZ, they are really struggling over there".

Most of DL’s big ticket write offs have been foreign investments and early buyouts/retirement packages. 20-30 year old aircraft like those 757s, A320s, 777s UA will be retiring are not carrying a lot of value on the books that need to be written off. That’s one of the advantages of older aircraft.


These are non-cash items, they're irreverent. When the airlines are discussing their return to profitability, they're referring to being cash positive -- e.g. the point at which they'll be taking in more revenue than they'll be spending.


Not in this latest discussion about June/July; this is about pre-tax profits/loss, not cash burns. Most US carriers already turned cash positive in the spring of this year.
 
User avatar
lightsaber
Moderator
Posts: 23124
Joined: Wed Jan 19, 2005 10:55 pm

Re: United returns to profitability

Wed Jun 30, 2021 4:31 pm

Please post on topic. When no one would never guess the topic from the post, that is off topic.
 
n9801f
Posts: 476
Joined: Tue Apr 13, 2004 8:29 am

Re: United returns to profitability

Wed Jun 30, 2021 6:16 pm

Cactusjuba wrote:
Carry forward losses and accellerated depreciation. That explains, by far, the disparity in "losses" post pandemic between the UA & DL. The loss of real dollar :twocents: was very similar, however.

https://liveandletsfly.com/delta-corporate-taxes/
https://en.m.wikipedia.org/wiki/Acceler ... preciation

PRASM is hard to compare when DL had 50%, then 60%, 70%, etc seat block. Net passenger revenues were close due to higher yields, but they had to fly more metal than UA, and thus lowest PRASM. That era is over, but wont be fully visable until 3Q results.

The topic of this post is a response to the issues raised in the quoted and previous posts by Cactusjuba.

The United losses are definitely smaller than Delta's. Some of the items you are discounting for Delta did cost actual cash money, for instance the $2B purchase of LATAM shares.

United's financial statements use industry-standard metrics such as PRASM and results are usually expressed following GAAP. This gives them high credibility. They do not cherry pick or invent new nonstandard measures like cash burn without debt service that show the picture through rose colored glasses.
 
WidebodyPTV
Posts: 755
Joined: Fri Sep 20, 2019 9:06 pm

Re: United returns to profitability

Wed Jun 30, 2021 6:18 pm

panamair wrote:
WidebodyPTV wrote:
Polot wrote:
Most of DL’s big ticket write offs have been foreign investments and early buyouts/retirement packages. 20-30 year old aircraft like those 757s, A320s, 777s UA will be retiring are not carrying a lot of value on the books that need to be written off. That’s one of the advantages of older aircraft.


These are non-cash items, they're irreverent. When the airlines are discussing their return to profitability, they're referring to being cash positive -- e.g. the point at which they'll be taking in more revenue than they'll be spending.


Not in this latest discussion about June/July; this is about pre-tax profits/loss, not cash burns. Most US carriers already turned cash positive in the spring of this year.


Incorrect. They're referring to profitability as before EBITDA and special items (in other words, non-cash items)... which is basically another way of saying cash positive. The legacies may have achieved small cash positive stretches earlier this year, but now UA is projecting it will finish June and July cumulatively cash positive.
 
panamair
Posts: 4475
Joined: Fri Oct 12, 2001 2:24 am

Re: United returns to profitability

Wed Jun 30, 2021 9:29 pm

WidebodyPTV wrote:
panamair wrote:
WidebodyPTV wrote:

These are non-cash items, they're irreverent. When the airlines are discussing their return to profitability, they're referring to being cash positive -- e.g. the point at which they'll be taking in more revenue than they'll be spending.


Not in this latest discussion about June/July; this is about pre-tax profits/loss, not cash burns. Most US carriers already turned cash positive in the spring of this year.


Incorrect. They're referring to profitability as before EBITDA and special items (in other words, non-cash items)... which is basically another way of saying cash positive. The legacies may have achieved small cash positive stretches earlier this year, but now UA is projecting it will finish June and July cumulatively cash positive.


https://ir.united.com/static-files/51f2 ... 6b698db2c2

"....United Airlines, Inc. ("United"), a wholly-owned subsidiary of United Airlines Holdings, Inc. ("UAL" and, together with United, the "Company"), expects to generate positive adjusted pre-tax income (1) in the month of July 2021, which would be the first month with positive adjusted pre-tax income since January 2020, before the start of the crisis..."

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

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