United
 

OK long message, cut and pasted from http://www.rockymountainnews.com/drm...060313,00.html - thought it might be of intrest and start a non accident related thread.

Ready for flight plan
Filing expected today puts United on path out of bankruptcy

By Chris Walsh, Rocky Mountain News
September 7, 2005

United Airlines intends to release its long-awaited, oft-delayed reorganization plan and key financial projections today, triggering the start of its exit from bankruptcy protection.

The nation's second-largest carrier plans to submit documents to a bankruptcy court laying out its strategy for emerging from 33 months in Chapter 11 and outlining how it will repay creditors, grow its business and secure financing to carry it out of bankruptcy.

United's goal is to convince the bankruptcy court, potential lenders and thousands of creditors that its plan is the best option going forward and that the company is lean enough to survive on its own after more than $7 billion in cost cuts and vast changes to its business.

"They have to have sufficient detail in their plan to both satisfy the court and get the funds they need to exit bankruptcy," said Michael Allen, chief operating officer of consulting firm Back Aviation Solutions in Connecticut. "They need to show that they have a plan that will function properly for the longer term."

United, the biggest airline in Denver, has proposed a timeline that would give creditors until Dec. 1 to vote on or object to the plan. United hopes to receive confirmation of the plan in mid-January and emerge from bankruptcy in February, spokeswoman Jean Medina said.

The timeline gives "creditors maximum notice of the confirmation process, lays out a smooth path toward United's exit from Chapter 11 and limits the opportunities for unnecessary delay to United's emergence," the carrier wrote in a document filed this past weekend with the bankruptcy court.

The carrier now will work with the court to finalize the schedule.

United, a unit of Chicago-based UAL Corp., has been flying under bankruptcy protection since December 2002. The airline has set, then missed, numerous deadlines to file its reorganization plan and start its emergence from bankruptcy.

Most recently, United had planned to submit its strategy Aug. 1 but pushed back the date after creditors requested more time to review the documents.

And last month, a bankruptcy judge granted United a two-month extension - its 14th - to file its reorganization plan without competition from other parties.

Still, the airline has made significant progress in realigning its business during the past three years, revising union contracts, cutting nearly 25,000 jobs and abandoning its pensions.

In the past few months, it also has renegotiated most of its aircraft leases and lined up several offers for up to $3 billion in financing.

Now, the carrier is entering the home stretch.

Filing the reorganization plan "signifies that they believe they've tied down enough of their uncertainties and loose ends that they can now start their emergence," said Thomas J. Salerno, a Phoenix bankruptcy lawyer. "This certainly is the beginning of the end of the case."

The carrier needs the backing of a majority of its creditors, who could reject the plan and allow other parties to propose their own strategy for the company.

Creditors initially filed more than 40,000 claims against United totalling $3.6 trillion. The carrier says roughly 25,000 claims, many of them duplicates, have been settled or dismissed and that about $45 billion in claims remain.

Most creditors likely will get pennies on the dollar, and the company says its current stock will be wiped out.

United said it is likely that various creditors will oppose parts of the plan and estimated it faces $30 billion in unsecured claims. It also must deal with $2.1 billion in unsettled claims related to the Sept. 11, 2001, terrorist attacks.

While the possibility exists that creditors will reject United's plan, the carrier likely already has enough support, law experts say.

"They should know, generally speaking, how the major creditor constituencies feel about the plan," Salerno said. "There's nothing that's going to be in there that's a huge surprise to any of the parties in the case."

Timeline for exiting Chapter 11

United Airlines has proposed a timeline to emerge from bankruptcy protection early next year. Some key dates in its schedule:

• Oct. 11: Court hearing to approve United's disclosure statement, a document that outlines why the carrier is in bankruptcy, describes its business strategy going forward and details its financial projections. United also has asked for this to be the "record date" that determines which creditors are eligible to vote on its reorganization plan, which outlines how creditors will get paid.

• Dec. 1: Voting deadline and last day creditors can object to the plan.

• Jan. 9: Deadline for United to reply to objections.

• Jan. 17 and 18: Hearing to confirm United's plan to exit bankruptcy.

• February: United emerges from Chapter 11.Source: Bankruptcy Court Documents

What's next

United is hoping to achieve several goals in coming weeks:

• Schedule a hearing to confirm its reorganization plan.

• Set deadlines for filing objections and replies.

• Establish a discovery schedule and a voting deadline.

• Cement a record date for determining which creditors get to vote on the plan.

• Implement a process to resolve certain significant claims before a bankruptcy court approves its plan.Source: Bankruptcy Court Documents

Hold your breath...

UAL has had many expected dates to exit bankruptcy...

________________________________________

June 30, 2003

"...United officials have said publicly in recent weeks that the airline hopes to emerge from bankruptcy several months earlier than originally expected, and that the plan focuses on the core business travel market, with no hubs likely to be eliminated."

http://www.chicagobusiness.com/cgi-b...ticle_id=20166


_________________________________________

United Gains Momentum

April 28, 2004

The San Francisco Chronicle

United Airlines, the world's second-largest carrier, is on track to exit Chapter 11 bankruptcy reorganization by the end of summer, thanks in part to the initial success of Ted, its 10-week-old low-cost carrier within a carrier. United Chief Executive Officer Glenn Tilton said in a Chronicle interview at the Travel IndustryAssociation of America's annual trade show in LosAngeles that Ted is racking up load factors "in the high 80s percentile,'' which means, in industry terms, that its flights are essentially full.

Bubba, this time it's more than simply a projection. They filed a Reorg Plan with the judge today...

http://www.united.com/press/detail/0,6862,53164,00.html

UA also announced during the week that it's cutting capacity to Europe, terminating the daily SFO-CDG, the 2nd daily JFK-LHR, and reducing the daily ORD-AMS to a summer only service.

United projects $916M operating profit for 2006 (based on $50 oil).


http://www.chicagobusiness.com/cgi-bin/news.pl?id=17703

Wouldn't be the first time for United to get it back around. I'm glad to see their future getting brighter again.

That's encouraging to read, and I'm happy for the employees, who are married to the company for life. There are plenty of airline staff at other companies who can taste how much they would like either United or USAirways to be dissolved. Some of these work for companies which are about to file Chapter 11. How about a look in the mirror? :E

Is it always boring yet bizarre, while quite common and tragic in our business, how often upper mgmt. looks to huge salary and benefit cuts as its salvation, plus operating many more flights on regional jets (CRJ etc)? :=

Even after huge salary cuts and a larger fraction of regional jet operations, at both United and USAirways, the problems have been in other areas. It is possibly the worst-managed industry in the US, as executives in other businesses often remark. How about the very inefficient hub and spoke route systems, so loved by management and expanded for decades, while on the contrary, Southwest built its totally different concept (the almost forgotten, very old-fashioned style of operations)?

<<<
How about the very inefficient hub and spoke route systems, so loved by management and expanded for decades, while on the contrary, Southwest built its totally different concept (the almost forgotten, very old-fashioned style of operations)?
>>>

Well, the US low-costs also more or less operate hub and spoke networks, while not to the developed extent of the US majors, but to some considerable degree, eg. Southwest at Baltimore or Houston, AirTran at Atlanta, Frontier at Denver, JetBlue at JFK. They just don't call them hubs.

While costs are certainly the problem at the majors, given that they have no pricing power and little ability to maximize revenues further, the real cost burdens are existing and future health care and pension obligations, head office management layers/buildings and, of course, fuel.

Well, it looks like it came true. But now top managent will be pillaging the company. After seeking (and getting) incredible concessions from its workers the company's 400 top executives now are asking for 15% of the company as a bonus.

Looks like they want the $ while the going is good. No need to tuck any away for the next rainy day?

The execs at UA are getting a rise??? I suppose they claim it is warrented to 'keep the best of managerial talent' or some such crap? They have degrees up to their armpits, yet they still wouldnt know how to make a profit if they tried.

1. Lets fire all the young inniovative, ATTRACTIVE staff, lets keep the old Grannies.
2. Lets piss off our passengers by cancleeing their flights at whim, and transfer them to lowly loaded red eyes.
3. Lets piss off the unions and treat our staff like crap, so then they treat our passengers like crap, and they vow never to fly united again.
4. Lets make a really complex product, sometimes catered, some times not, mash it all together.
5. Lets take some of our oldest 757s tart them up a wee bit, give it a jazzy name. "You want a cuppacino? This is United Airlines, not Starbucks!"

So all in all they really deserve that rise. Tell ya what Ill take UA offf their hands for $1, take all the debt, fire every last senior manager within 3 months, promote the best, most inniovative middle managment(if theres any left) build a descent network using TED,the 757s(properly refurbished)and the Intercontinental network. Like fools they cut it? They are clueless.

Shares of United
 

What will happen to shareholders if United ends Chapter 11?

Anybody who knows?

regards

Re: Shares of United
 

Old shares will be cancelled, and new issued to those that put up the financing to re-capitlise the airline.
Therefore, old shareholders are SOL...:sad:

United drop London-New York!!!
 

Surely this can't be right. They have "given" the route to Delta for $21 m according to the FT
"United Airlines (UAL), the second largest US carrier, is withdrawing from the London to New York aviation market and is selling its London/New York route authority to its US rival Delta Air Lines in a deal worth up to $21m.
The decision by UAL to drop its daily service between London Heathrow and New York JFK will reduce competition on the one of the world's most lucrative air routes."

London - New York
 

Delta starting New York - Gatwick with a 763?

If this United deal had not taken place would Delta have been allowed to start Gatwick - New York? All information suggests not and hence why they have paid such a sum to United.

I assume this is all tied up with Bermuda 2?

Any experts out there to explain?

I understand that only two US airlines can use LHR but I would have thought that LGW was open for new routes subject to slots etc?

Pete

Losses
 

United has sustained heavy losses on the LHR-JFK route since 1991; at one stage the route had 3-4 frequency per day which ran in conjuction with the LHR-EWR service. United's strength is in it's ability to provide connections in the US...something they could never do in JFK/EWR. Their JFK-NRT route will be moved down to IAD along with flights to GRU/EZE which moved down to IAD years ago.

Delta 1 flight, 767-300:= ...head the lessons from United--frequency and product are important...You will be no competition for the mighty strength of BA (8flights a day LHR-JFK; 3 LHR-EWR), AA and VS...

Pete, I assume Bermuda II is the reason United is unable to start a LHR-DEN service(despite BA flying LHR-DEN), this is no.1 on their wish list, service to another city where they can provide loads of connections...United who have flown to SEA/MIA/BOS/EWR/DEL/TXL/AMS/BRU/CDG/FRA/MUC/HAM from LHR are now left with four routes:
IAD/ORD/LAX/SFO...

OltonPete,

There are two rules under Bermuda 2 which must be satisfied. The first concerns what is called double designation by any country on a city pair. That means that when traffic reaches a certain threshold ( I think it is 0.5 million pax per annum) a second carrier can be designated by both countries. If United give up JFK-LON then the US can designate an alternative carrier. Thus Delta can be designated. But there is an additional rule under which only Pan Am and TWA or the companies that initially bought their routes can serve LHR. Thus if Delta want to serve LON they cannot use LHR.

if they had wanted to use STN they could have done so at any time because this airport has open access from any American city under revisions to Bermuda agreed about 12 years ago. As they already have substantial operations at LGW they would choose that airport.

Under Bermuda 2 EWR is not classified as a New York airport because it is in the state of new Jersey.

Denver-London is not open to US carriers because it was added many yeras after the original agreement was negotiated and it was added as a ubilateral UK operation. The US did get its own unilateral rights at the time and I believe that they cover Delta's operations from CVQ.

Hope this helps

United
 

averytdeaconharry

Cheers for that.

Is it me but the price paid seems rather high?

I know Delta have started a massive expansion of their JFK hub and London would naturally be on their hit list of destinations but it is
surprising to see an airline (in Chapter 11) to pay for the privilege on a
route that have been abandoned by others in the past (albeit without a hub at the US end).

A big vote of confidence in the route already by Delta to say the least.

Interesting development. So, can Delta come to Heathrow on the JFK route or not, in the light of the Bermuda 2 discussion above ? If not, what is it that Delta have actually bought for their $21m. I have understood that a pair of slots at LHR (United have two remaining round-trips to JFK) at peak times can fetch up to $10m, so that is in the ballpark for United's slots at LHR. If Delta haven't acquired the LHR slots, what will happen to them - slots there are very valuable commodities, and I doubt they'd be allowed to wither away.......

LHR/JFK fares seem very high at present, summer notwithstanding.

I think the answer is above: No. DL can do JFK-LGW but not JFK-LHR. So their money has bought a route authority to London, but one which can't currently be operated to LHR.

I've read elsewhere that the UA slots are to be leased to AC for three years to allow a new AC service. I think I read YYT.

This summer has actually brought some very low fares to LHR-JFK. Think of the business class sales that took place: about £900 return in J on BA, if you knew what you were doing.

United to leave LHR for LGW
 

As you'll probably know UA sold their LON - NYC rights to Delta recently.
The rumour I've been hearing is that this is only part of a plan to sell their LHR rights / slots lock stock & barrel to CO or DL and relocate to LGW.

Personally I'd be surprised but then we thought they'd never give up LON - NYC