Interesting comments at
http://www.airportplanning.com/apcommentary.htm about Uniteds recent Cash Positive statements..... ummm.... talk about spinning the story - united are getting good at it!
The Growing Shortage At United: Credibility
"While we have seen only the press reports, those figures do not come even close to adding up."
-CSFB Analyst James Higgins, CBS News, March 13,2003, regarding United CFO's claim of being cash-positive in January.
It's becoming sort of the reverse of crying wolf.
Last week, United's CFO got the airline some great press, announcing that United was cash-positive to the tune of $1 million a day in January. Great news. The media headlines trumpeted this achievement, taking the CFO's statement at face value. But there was a lot of skepticism in the industry, given the track record of weird data coming from United's executive offices.
Two days later, Credit Suisse First Boston came out seriously questioning United's claim: "Our only surmise is that United is not making payments on many items...we can think of no way that monthly cash flow could have been even close to positive ... such decisions not to pay are unsustainable."
What's also unsustainable how long this stuff will be taken seriously. Getting called on for playing word games by financial institutions like CSFB does not reflect well on United's senior management. Nor can it build confidence in the carrier's overall direction.
This comes fast on the heels of another sunshine story that left the industry underwhelmed. Two weeks ago United's senior management grandly announced that its new, substantially-lower business fares were "revenue positive" - i.e., the decline in unit revenues was being more than off-set by increases in the number of passengers. Other airlines - which have seen just the opposite - scratched their heads. Bluntly, nobody believed it. Then, just days later, United announced the lay-off of 900 more flight attendants because of lower passenger traffic. First, they tell the world their grand fare scheme is generating more passengers. Then they pink-slip hundreds of employees for low passenger loads.
As they say down on the farm, that cow don't moo. CSFB is right. Something here doesn't seem to add up.
United is not running out of money. It's much worse. It's senior management is running out of credibility. The track record is getting pretty clear. In November there was the laughable, embarrassing ATSB filing, with numbers that were zip codes away from reality. Then there was the flood of obviously advisor-scripted babble about "reconstituting margins" and "transformational models" and describing some passenger segments as "price-driven occasionalists," all of which seemed to indicate more smoke than substance in the front offices.
To get out of bankruptcy, United will need the full confidence of creditors, financial institutions and the flying public.
It seems to be going in the opposite direction.