United Airlines, Chapter 11 status
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Ah yes, but UAL pilots started the ball rolling with much higher negotiated salaries...now must pay the piper.
Where oh where is Lorenzo when he is needed most...?
The BIG shakeout continues...
Where oh where is Lorenzo when he is needed most...?
The BIG shakeout continues...
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411A, you mean that asset-stripper, pillager of airlines and doyen of the Wall St corporate raiders, Frank?
You MUST be kidding.
Probably being gang-raped by a bunch of Guatemalan Banditos...
You MUST be kidding.
Probably being gang-raped by a bunch of Guatemalan Banditos...
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Pretty late in the game but maybe enough reality has set in to get the other unions onboard as well...
_______________________________________________
United Stock Soars on Pilots Deal
By THE ASSOCIATED PRESS
Filed at 11:56 a.m. ET November 4, 2002
CHICAGO (AP) -- United Airlines' stock jumped Monday after a $2.2 billion cost-slashing agreement with pilots boosted its efforts to cut labor expenses by 15 percent to stay out of bankruptcy court.
Increased investor optimism sent shares in UAL Corp., United's parent company, up 33 percent, or 85 cents a share, to $3.41 in morning trading on the New York Stock Exchange. While reaching its highest level since September, the stock remains down about 90 percent since before last year's terrorist attacks.
United has warned it may file for Chapter 11 bankruptcy-court protection if it doesn't get an infusion of cash soon. It still needs to reach agreements on cuts involving machinists, flight attendants and salaried employees as part of an overhaul to make it more competitive and return it to profitability after 2 1/2 years of losses. Without them, it has scant chance of receiving the $1.8 billion federal loan guarantee it says is needed to avoid a bankruptcy filing.
While spokesmen for the other unions were mum on the status of continuing negotiations, chief executive Glenn Tilton voiced optimism about the outcome.
"We expect that others will follow in their tentative agreements here shortly, and perhaps this week,'' he said in his weekly taped message to employees.
The pilots' deal announced Friday night is, Tilton said, "solid evidence that we are making significant progress toward cutting costs in order to avoid a court-supervised restructuring.''
The tentative five-year agreement, which is being submitted to a vote of United's 8,800 pilots, calls for an 18 percent pay cut over the next two years along with unspecified changes in work rules and job reductions. Pay reportedly would begin increasing again in 2005, by 4.6 percent annually, returning to 2002 levels by 2008.
The deal follows an agreement by United's union leaders last month to support a total of $5.8 billion in labor concessions over 5 1/2 years. Specific allocations were left up to the individual unions, which hold a majority stake in the company, and the weekend agreements involving the pilots and the much smaller meteorologists union were the first to be done.
With the pilots' agreement in hand, United is mounting an intensive lobbying campaign to try to secure the loan guarantee from the Air Transportation Stabilization Board.
Tilton said United employees, partners and allies from around the world have sent more than 30,000 letters to Washington in support of the federal loan guarantee.
"The grassroots campaign in support of what it is that we are trying to do -- to restructure United to reposition its competitiveness out of court -- is certainly gaining momentum,'' he said.
In addition, he said, a United management team will travel to Washington this week to present the airline's case directly to the federal panel.
_______________________________________________
United Stock Soars on Pilots Deal
By THE ASSOCIATED PRESS
Filed at 11:56 a.m. ET November 4, 2002
CHICAGO (AP) -- United Airlines' stock jumped Monday after a $2.2 billion cost-slashing agreement with pilots boosted its efforts to cut labor expenses by 15 percent to stay out of bankruptcy court.
Increased investor optimism sent shares in UAL Corp., United's parent company, up 33 percent, or 85 cents a share, to $3.41 in morning trading on the New York Stock Exchange. While reaching its highest level since September, the stock remains down about 90 percent since before last year's terrorist attacks.
United has warned it may file for Chapter 11 bankruptcy-court protection if it doesn't get an infusion of cash soon. It still needs to reach agreements on cuts involving machinists, flight attendants and salaried employees as part of an overhaul to make it more competitive and return it to profitability after 2 1/2 years of losses. Without them, it has scant chance of receiving the $1.8 billion federal loan guarantee it says is needed to avoid a bankruptcy filing.
While spokesmen for the other unions were mum on the status of continuing negotiations, chief executive Glenn Tilton voiced optimism about the outcome.
"We expect that others will follow in their tentative agreements here shortly, and perhaps this week,'' he said in his weekly taped message to employees.
The pilots' deal announced Friday night is, Tilton said, "solid evidence that we are making significant progress toward cutting costs in order to avoid a court-supervised restructuring.''
The tentative five-year agreement, which is being submitted to a vote of United's 8,800 pilots, calls for an 18 percent pay cut over the next two years along with unspecified changes in work rules and job reductions. Pay reportedly would begin increasing again in 2005, by 4.6 percent annually, returning to 2002 levels by 2008.
The deal follows an agreement by United's union leaders last month to support a total of $5.8 billion in labor concessions over 5 1/2 years. Specific allocations were left up to the individual unions, which hold a majority stake in the company, and the weekend agreements involving the pilots and the much smaller meteorologists union were the first to be done.
With the pilots' agreement in hand, United is mounting an intensive lobbying campaign to try to secure the loan guarantee from the Air Transportation Stabilization Board.
Tilton said United employees, partners and allies from around the world have sent more than 30,000 letters to Washington in support of the federal loan guarantee.
"The grassroots campaign in support of what it is that we are trying to do -- to restructure United to reposition its competitiveness out of court -- is certainly gaining momentum,'' he said.
In addition, he said, a United management team will travel to Washington this week to present the airline's case directly to the federal panel.
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411A,
I'm with you on this one, that higher negotiated salaries are the reason that during a economic downturn the airlines find themselves in financial dire. US Airways. UAL, Delta and American all have this problem. $24'000 US a month to fly a jet IS inflated and we have priced ourselves out of a job. I would rather get paid half that and have a heathly company which will secure my future and pension, than make 24G for a few years and find myself out without a job.
Having said that, a dependency on the business traveller also leaves the airlines open for the financial crunch.
A change of attitude from both management and personnel is required in the airline business. This and a change of financial strategy willensure a fair and healthy future for everyone.
I'm with you on this one, that higher negotiated salaries are the reason that during a economic downturn the airlines find themselves in financial dire. US Airways. UAL, Delta and American all have this problem. $24'000 US a month to fly a jet IS inflated and we have priced ourselves out of a job. I would rather get paid half that and have a heathly company which will secure my future and pension, than make 24G for a few years and find myself out without a job.
Having said that, a dependency on the business traveller also leaves the airlines open for the financial crunch.
A change of attitude from both management and personnel is required in the airline business. This and a change of financial strategy willensure a fair and healthy future for everyone.
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Bail out loans underwritten by taxpayers are a fraud! If UAL can't get loans on Wall Street, then the company should be forced into bankruptcy. It's totally anti capitalist in the most capitalist country for a government to subsidize the survival of a private company whose business is nonessential to national security. To be sure, there would be life after UAL.
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where is lorenzo when he is needed most? get real.411A the industry needs more folks like the man at southwes, or jetblue...employees are a part of the solution people like lorenzo fail to realize this and dump all over them....so where is lorenzo? who cares...
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More from the classic OGA script of rollercoaster reprieves:
United Restructures Debt Obligations
By DAVE CARPENTER
AP Business Writer
Published November 5, 2002, 4:58 PM CST
CHICAGO -- United Airlines won a reprieve Tuesday from $500 million in looming debt repayments that threatened to push it into bankruptcy, announcing that a German lender has agreed to restructure the debt and take payment later.
Stock in the ailing carrier surged 30 percent in response to the midafternoon announcement.
By putting off payments due in November and December, the deal with German development bank Kreditanstalt fur Wiederaufbau removes one of the biggest immediate financial threats facing cash-crunched United. Once the agreement in principle is made final, the debt will come due in 2007, United said.
...United, which is losing money at the rate of more than $7 million a day, isn't out of danger yet in its bid to avoid bankruptcy.
The Elk Grove Village, Ill.-based carrier still faces a Dec. 2 deadline for the repayment of $375 million in aircraft-backed loans, as well as a $70 million payment to the machinists union for retroactive wages due Dec. 15.
It also needs agreements soon with the machinists and flight attendants in order to reach the targeted total of $5.8 billion in labor cutbacks. The reductions are the key plank of its application for a $1.8 billion federal loan guarantee, which it says is needed to avoid a Chapter 11 bankruptcy filing.
"They just bought some time," Denver-based airline consultant Michael Boyd said. "But that's still not enough. At some point they're not going to have enough cash to operate.
"United's biggest issue is getting more people on airplanes, and they're not focusing on that," Boyd said. "Until we see some changes there, they're just bailing faster on the Titanic."...
United Restructures Debt Obligations
By DAVE CARPENTER
AP Business Writer
Published November 5, 2002, 4:58 PM CST
CHICAGO -- United Airlines won a reprieve Tuesday from $500 million in looming debt repayments that threatened to push it into bankruptcy, announcing that a German lender has agreed to restructure the debt and take payment later.
Stock in the ailing carrier surged 30 percent in response to the midafternoon announcement.
By putting off payments due in November and December, the deal with German development bank Kreditanstalt fur Wiederaufbau removes one of the biggest immediate financial threats facing cash-crunched United. Once the agreement in principle is made final, the debt will come due in 2007, United said.
...United, which is losing money at the rate of more than $7 million a day, isn't out of danger yet in its bid to avoid bankruptcy.
The Elk Grove Village, Ill.-based carrier still faces a Dec. 2 deadline for the repayment of $375 million in aircraft-backed loans, as well as a $70 million payment to the machinists union for retroactive wages due Dec. 15.
It also needs agreements soon with the machinists and flight attendants in order to reach the targeted total of $5.8 billion in labor cutbacks. The reductions are the key plank of its application for a $1.8 billion federal loan guarantee, which it says is needed to avoid a Chapter 11 bankruptcy filing.
"They just bought some time," Denver-based airline consultant Michael Boyd said. "But that's still not enough. At some point they're not going to have enough cash to operate.
"United's biggest issue is getting more people on airplanes, and they're not focusing on that," Boyd said. "Until we see some changes there, they're just bailing faster on the Titanic."...
Chapter 11
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The success of any company rests on the employees as well as management...when management lose the plot, and fail to realize the important contribution employees make to the big plan, then the company is doomed...that's why SWAL is making money, and others are loosing...
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BBC are reporting that the 'mechanics' have agreed a pay cut. Anyone know anymore ?
See http://news.bbc.co.uk/1/hi/business/2533761.stm
I hope so
See http://news.bbc.co.uk/1/hi/business/2533761.stm
I hope so
Last edited by flappless; 2nd Dec 2002 at 17:36.
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< flappless -
BBC are reporting that the 'mechanics' have agreed a pay cut. Anyone know anymore ?
I hope so >
The union representing the mechanics has a history of having a passing vote on the second try. (Unless Jimmy Carter is present, no one believes it is legit)
"Yo Vinny, go to the trunk of the blue Buick Regal in the parking lot and get three ballot boxes out".
BBC are reporting that the 'mechanics' have agreed a pay cut. Anyone know anymore ?
I hope so >
The union representing the mechanics has a history of having a passing vote on the second try. (Unless Jimmy Carter is present, no one believes it is legit)
"Yo Vinny, go to the trunk of the blue Buick Regal in the parking lot and get three ballot boxes out".
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You redtail types are such cynics, probably due to the Wx in the great white north and the fact that winter is almost here. Undoubtedly exciting times for us UAL share holders though, a daily plus or minus 30% roller coaster ride depending on the rumor of the hour. Don't know whether to buy, sell or hold on to what I've got with eyes tightly closed. Answers on a post card please.
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United Federal loan denied.
Bankruptcy likely within a week. Article link is below.
http://biz.yahoo.com/rf/021204/marke...ll_ual_1.html:(
Sorry. That link doesn't work. Here's the article
Reuters
UPDATE - INSTANT VIEW-UAL denied financial support
Wednesday December 4, 6:04 pm ET
NEW YORK, Dec 4 (Reuters) - The federal government on Wednesday rejected an application by United Airlines for a $1.8 billion loan guarantee that the company said was crucial for avoiding bankruptcy.
The following is immediate reaction from industry sources.
SASHA KAMPER, SENIOR FIXED-INCOME ANALYST, PRINCIPAL GLOBAL INVESTORS.
"The loan board did not think the proposed labor cuts were sufficient, and believed the business plan is inadequate. United will now be forced to file for bankruptcy to get its costs down. I would expect a bankruptcy filing within the next week."
"Unsecured bondholders will likely recover little or nothing in a bankruptcy. Holders of paper secured by aircraft will fare differently depending on the collateral backing those deals and the loan-to-value at which that paper was first written." Kamper said.
GEORGE HAMLIN, AVIATION INDUSTRY CONSULTANT, GLOBAL AVIATION ASSOCIATES:
"It's not completely surprising. (Bankruptcy looms) unless a white knight heretofore unknown emerges quickly.
"The (mechanics) vote is still important in the sense that United has got to get its economics straight. But if you follow the trend, then it's probably not going to get approved.
"I think what the ATSB has said is that this is a vote of no-confidence," said Hamlin.
"I have a gut feeling it's going to take considerably more than they've put on the table thus far. This is the downside of having industry-leading contracts.
"I think we'll also see, fairly quickly, further capacity reductions. And that is something that's within the company's prerogative to do.
"They need to determine what it is that they're going to be when they come out of bankruptcy," Hamlin said.
AN INDUSTRY ANALYST WHO WISHED TO REMAIN UNNAMED:
"It's over. They are going to file for chapter 11 certainly and try to reorganize."
http://biz.yahoo.com/rf/021204/marke...ll_ual_1.html:(
Sorry. That link doesn't work. Here's the article
Reuters
UPDATE - INSTANT VIEW-UAL denied financial support
Wednesday December 4, 6:04 pm ET
NEW YORK, Dec 4 (Reuters) - The federal government on Wednesday rejected an application by United Airlines for a $1.8 billion loan guarantee that the company said was crucial for avoiding bankruptcy.
The following is immediate reaction from industry sources.
SASHA KAMPER, SENIOR FIXED-INCOME ANALYST, PRINCIPAL GLOBAL INVESTORS.
"The loan board did not think the proposed labor cuts were sufficient, and believed the business plan is inadequate. United will now be forced to file for bankruptcy to get its costs down. I would expect a bankruptcy filing within the next week."
"Unsecured bondholders will likely recover little or nothing in a bankruptcy. Holders of paper secured by aircraft will fare differently depending on the collateral backing those deals and the loan-to-value at which that paper was first written." Kamper said.
GEORGE HAMLIN, AVIATION INDUSTRY CONSULTANT, GLOBAL AVIATION ASSOCIATES:
"It's not completely surprising. (Bankruptcy looms) unless a white knight heretofore unknown emerges quickly.
"The (mechanics) vote is still important in the sense that United has got to get its economics straight. But if you follow the trend, then it's probably not going to get approved.
"I think what the ATSB has said is that this is a vote of no-confidence," said Hamlin.
"I have a gut feeling it's going to take considerably more than they've put on the table thus far. This is the downside of having industry-leading contracts.
"I think we'll also see, fairly quickly, further capacity reductions. And that is something that's within the company's prerogative to do.
"They need to determine what it is that they're going to be when they come out of bankruptcy," Hamlin said.
AN INDUSTRY ANALYST WHO WISHED TO REMAIN UNNAMED:
"It's over. They are going to file for chapter 11 certainly and try to reorganize."
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Welcome to the free World of capitalism, where any company can make lots of money and lose lots of money.
Thankfully, the Government did not upset this financial equilibrium by committing taxpayer dollars to employe owned UAL.
Thankfully, the Government did not upset this financial equilibrium by committing taxpayer dollars to employe owned UAL.
Transparency International
Too mean to buy a long personal title
non sched: http://biz.yahoo.com/rf/021204/mark...ell_ual_1.html
Sorry. That link doesn't work. Here's the article
Sorry. That link doesn't work. Here's the article