How long does United have? Will they survive? Yes, no, maybe

[Delta727-232]

Hey guys,
I wanted to get some other people's basic feelings and opinions, on the current situation with United Airlines. Obviously, they are in grave financial difficulty, and in my opinion, have about another 3 or 4 months before Chapter 7 comes along. They are only going to get farther in the hole for these reasons:
1) They owe $858 million for new aircraft/renewal of leases
2) They owe the FAA $805,000, for the taping of holes in three of their 757's spoilers (This is a temporary fix until proper maintenenance can be given, but the holes found on the aircraft were much larger than FAA regulations).
3) Too big, too little time.
If UA does not downsize, you can say bye bye charlie. As of yet, UA has refused to give up any of it's services and assets. AA has the right idea about all of this, if they downsize, they can save themselves a lot of money in leases, drop the routes that are unprofitable, and even at that, the routes that are just breaking even. The bottom line is, UA does not have the money, the resources, nor the time to re-organize. What are your opinions?

[ATLcenter]

Unless UA acts fast, they will get a tombstone next to TWAs. They are in urgent need of money, and I wouldn't be surprised if they went under. However, there's always chance. I'm just happy I already have a copy of UA's inflight magazine images/smiles/icon_smile.gif


hope we stand U N I T E D
I can't believe i wrote that; I'm a DL fan!

[Delta727-232]

ATL-I'm a big Delta fan as well. I'm a faithful DL flyer. I'll be flying with DL on the 20th and 31st fo this month.

[Thomas_Cook_757-200]

Hi, Of course they will pull through. They won't go bankrupt because if such a large airline was allowed to slip away it would cripple the American Aviation Industry!

Thanks

jmc_757-200 heart.gif JMC

[Delta727-232]

Not really JMC. If the goverment didn't want UA to go, they would have funded it. And actually, if UA goes, it would stimpulate the airline economy, giving those routes, and more passengers to the other airlines. I have a feeling this is why their request for Federal Aid was denied, due to the fact that UA going will stimulate the industry.

[tommyalf]

Bryan on top of the debt you mentioned UAL has another 21 billion in debt. If they only owed what you mentioned then they wouldn't be in Chap 11. So will they survive? It's hard to say. UAL has a long and hard road ahead of them. They only have about 2 billion in cash on hand, that's with their DIP loans. 2 billion will run out quickly at the rate UAL is burning through their cash.

It's sad to say but one less player in the industry will only help the industry overall. If UAL goes bust, all the airlines will be more then happy to absorb those customers. For the sake of the people at UAL I hope they stay alive.

[Delta727-232]

Tom,
That's my general feeling about it. I mean if UA goes, one Chapter of US Civil Aviation will be closed, and it would be devastating. But at the same time, I think it would be better if UA goes, and like you said, the other airlines can absorb their passengers, so on and so forth.

[gkirk]

I have to admit, I think UAL will die. I think DL or CO will get their LHR slots.

And to add some humour... naughty.gif spammers1.gif

[PolishAir42]

Hard to say but I voted No.

Im predicting a major downsize...

[gocaps16]

I agree with peter, I don't think United will go under. Yes, they will downsize dramatically and maybe perhaps be like a regional airline. In the news, I hear United is planning on competing with Southwest Airlines and they are going to be a low-fare airline. Sure, it will take some time but it's better then closing for good.

My good friend is a flight attentant for United and she found out she isn't gonna get laid off but she is on extented leave as she recently had a baby couple months ago. It's a boy. Also she told me she plans on working with United for a awhile so that is good to hear from a fellow United employee.

[tommyalf]

Remember one thing about busisness; you don't shrink yourself to profitability. You'll shrink yourself until there's nothing left to downsize.

[OPNLguy]

Based upon what I read in the article linked below, I'm wondering if the revenue generation they need/expect is actually going to happen. If US Airways was to cease operations between now and the spring, United's revenue could indeed increase. If US Airways hangs on, or if additional terrorism strikes, that revenue that United needs is far less likely to be there.
http://www.chicagobusiness.com/cgi-bin/article.pl?article_id=19280

[tommyalf]

Thanks for that article OPNLguy. I didn't realize UAL only had until spring to stem there loses. That's a long shot if there ever was one. After reading that I can't see them making it. Even if USAirways goes under UAL doesn't have the east coast presence like US. They really won't benefit at all from US filing for Chap 7. Personally I think US is going to make it. Things seem to be falling in place for them. As for UAL that article doesn't paint a rosy picture.

<FONT COLOR="black" SIZE="1">[ December 15, 2002 09:18 PM: Message edited 1 time, lastly by Tom ]</font>

[OPNLguy]

The outfit that's providing the DIP funding to U came out and wanted another $200 million in employee wage concessions by 12/20/02 or, as the story went, they'd pull the plug and liquidate them. The pilots just came up with another $100 million in savings, and the other unions need come up with another cumulative $100 million by Friday.

The message boards over in Yahoo's finance area have been hot and heavy with rumors and tidbits. Scary time to be in the industry...

[PolishAir42]

<BLOCKQUOTE><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><HR>Originally posted by Tom:
Remember one thing about busisness; you don't shrink yourself to profitability. You'll shrink yourself until there's nothing left to downsize.<HR></BLOCKQUOTE>

Like Sun Country? heheheh they went bye bye...

But no seriously...I think that is a big possibilty that they will downsize big time

[aerpix]

I voted YES as I believe UA will survive, but some of its staff won't. UA will leave chapter 11 next year as a lean, much smaller carrier, very much at the cost of many of its current staff.

Regards,
Peter

[SK931]

I too, have yes for the survival of United Airlines.
Not just because the are membe of the same alliance as
my own Airline, Scandinavian Airlnes, but because I feel
that the US cannot allow an airline like UA go bankrupt.
If UA goes, I am quite sure, that AA will follow them
into Chapter 11.
Maybe big airlines like UA and AA are not able to
survive, but must be spilt up into smaller carriers.
I do,however, think that the Star Alliance will step
in in an attempt to save the airline. UA is an important
member of STAR.
Kind Regards
Ole

[shamrock145hvy]

I think so. However, it would not be a bad idea to play devil's advocate. Shoot all the UA you can! You never, ever, ever, really know! Good luck UA! clap.gif

shamrock145hvy

[beyond 1000]

Hello all! I would like to resurrect this thread since many opinions given were back in December of 2002. It is now mid August 2003 and I would like to ask many of you if you still feel that UA will survive or go Chapter 7?

I read in another thread that UA lost an additional 623 million dollars in the first quarter of 2003! This is BAD!

Again we must ask this question with further updates on your opinions.

WILL UNITED AIRLINES SURVIVE OR WILL IT FOLD AS A COMPANY?

I feel, unless something happened or is happening which I haven't heard, that at the current rate it is going, it will close up shop.

I hope that does NOT happen for the airline as a company and for the employees at UA.

Any current feelings people?

[SWA733Captain]

Although i do not wish this to happen, i believe this will happen. Many people out there will loose jobs and it will take years for the industry to recover. I personally see this happening to a few of the major carriers out there. This would leave a huge gap in the market to fill also. I do feel thier demise to be inevitable.

[ptbodale]

The situation is not looking good. I was reading in the Globe and Mail (national newspaper in Canada) that United needed a 90% load factor to break even. Thery have 83% (if I remember correctly). That does not look good. A load factor over 85% starts giving you a lot of spillage (denied pax) and then people start getting pissed off with you and start flying elsewhere.

I'm not sure the U.S. government would prop them up, they aren't known for airline bailouts like European countries. As we have already seen employees are expendable no matter what the comapny type, you can toss thousands out on the street without losing any sleep.

I live in a city that has lost thousands of jobs because of the free trade agreement. We survived, the rest will too.

[AEagle40]

I live in a city that has lost thousands of jobs because of the free trade agreement. We survived, the rest will too.

Damn NAFTA, they screwed our town out of our only major industry. (Maytag plant closing in Galesburg and moving to Mexico) Talk about things you wish never happened.

I dont see the future looking good for UAL. At least, the current figures dont seem to help it out any. Shame we couldnt see UAL and some other major US airline merge.

[AIRLNRGUY]

If they do downsize, what hubs/routes will be hit hardest?

[mikecweb]

If they do downsize, what hubs/routes will be hit hardest?
Their hubs and routes. :nod: :lol:

[SWA733Captain]

Shame we couldnt see UAL and some other major US airline merge.

Well the FAA already outlawed a merger between UAL and US Airways because they would become too powerful, i doubt the FAA would allow it to happen between any of the other major airlines.

[pbateson]

Maybe UAL need get rid all 744 cuz it's too expersive to fly.

If UAL is gone and I rather to fly CO or DL.

[beyond 1000]

Thanks to all you people out there for responding to this resurrected thread. Your thoughts are very conclusive from what I see. One further question....Does anybody know where exactly the current suituation with UAL is today? I mean, do you think they will fold after this summer or before Christmas? Will they make it into the summer of 2004?

I feel that at this point, without any other known developments, they will not make it until the Christmas season. I truly really hope they do and somehow survive. As many of you pointed, their survival is important to the economy and the industry as well. I have never flown United but I sure loved looking at their aircraft when I was in Chicago at O'Hare last year.

[AIRLNRGUY]

I'll miss channel 9 if they go under. What other airline have something like that? I'll probably be layed off if they go under.

[COOlcc88]

I sure hope United pulls through! i live in denver and our city would die without United. although another airline might fill uniteds slots. but i still dont want them to go away! :shakehea: This is my first ever post!!! :clap:

[FlyCharlestonSC]

I have flown United once, from Charleston to Chicago. I was not terribly impressed. The service was ok, nothing to complain about, but there was nothing so great about it. The staff wasn't particularly nice either. I think that UAL won't completely go away, but if they want to stay afloat, they will have to have major cutbacks. I hate to say this, but all the major, non-low fare airlines (except DL, and its not b/c of song) are going to have to change their structure to compete in todays market. I think DL has a better chance though. My prediction is that in 20 years, UAL will be about the size of Frontier, or will be gone.

[flyingbosshog]

United will survive in some fashon. They are downsizing their services even as we speak. ACA one of United major commuter carriers has decided to pull out of their next United contract and become an independent Airline (except for Delta operations) out of Dulles. United will not fold up shop. We just may see United go very smal and start all over. If it comes to the bitter end this is the best bet for US airtravel. United stays alive and other airlines can take on the left over routes and passengers thus stimulating the market upwards. :clap:

[JeffinDEN]

I hate to say this, but all the major, non-low fare airlines (except DL, and its not b/c of song) are going to have to change their structure to compete in todays market. My prediction is that in 20 years, UAL will be about the size of Frontier, or will be gone.

It is not a structure that makes me fly an airline. Service and performance do that for me. "Structure" is a pencil pusher term. :skeptic:

Think about that 20 year prediction for a minute. How long has United been around? Now, How many 20 year old airlines are still flying? If United is around at all in 20 years they will be considered a success. 20 years is an eternity for an airline. :roll:

United may go away...so be it. If they cannot make money, they are doing something wrong, and someone else is doing something right.

[indian airlines]

Quite a few 20 yr old airlines are flying.

Off the top off my head, I can name:

1) Cathay Pacific.
2) KLM
3) Indian Airlines
4) Alliance Air

[Greg J.]

The last time I flew UAL was on a flight from SAN and SFO and didn't like it at all! Most of the employees, including F/A were rather rude. I have heard friends say the same thing. I am sure UAL will stay in business, but I am sure they will be smaller and will need to improve some attitudes. As for me, I will not fly with them.

[pbateson]

What about United Int'l Airlines ????

[Santijet]

They will not dissapear that is for sure, they will probably become a small airline tho, I hope not, UNITED is a legend in the skies and they are to me one of the best airlines!!!

I don't see the fuss in American or CO I take Delta and United anyday thank you :nod: .

[fly4free]

For the looks of it,I dont think they will survive..but in this industry you just never know!!! If it happens that would be good for all the other airlines,,theyll be fighting for gates here and there,but it would be very sad to see so many (even more) employees go to the unemployment line,I been there (thanks to 9/11) and its not a pretty picture!! I hope they can put their things together and keep flying the "friendly skies".

[G-MIDY]

Funny how United and US Airways are both in chapter 11 yet they are now members of the Star Alliance i also noticed United and US airways codeshare.

[Greg]

US Airways came out of Chap. 11 in late-Spring/early Summer. The codeshare relationship has added some fair money to the airlines.

[G-MIDY]

Ah Ok i didn't really know when they went into Chapter 11 just that they did like United.

[jiml1126]

Everybody just claims UAL will go down and die based on their own "facts" and "predictions". Or simply they just don't like UA.

--UA sure did have poor management. But it is never too late to restructure unless you have the will.

--Entering ch.11 does not mean that the a company/corporation will enter ch.7 for sure.

--When UA enters ch.11, everyone say UA will fold within months. What is the definition of "within months"?

--When UA seems to be working fine, here it comes SARS and Iraq War. Then everyone says UA will crash for sure this time. Did UA crashed?

--UA has huge debt, and in extreme trouble financially. UA did have huge debt, but look at figures for the past month. The numbers may be Big and scary, but on some perspective the problem has been solved slowly.

--UA is not Pan Am. Pan Am's technology was way behind then any other carriers in the 70s/80s. When AA/UA and others begin to use computerized reservation system, Pan Am was still experimenting it. Pan Am saw a dramatic fall on passenger revenue because they were the successful terrorist target since the 70s.

Please, don't try to turn Jetphotos.net into a circus like Airliners.net, when we have so many similar UA questions poping up everywhere, and people's reply is: obviously they will go down and blah blah blah.

(I didn't mean to say that do not ask whether UA will survive or down, but try to be more professional when answering question like this.)

[Greg]

United has an incredible knack for survival even when it looks like it will go under. A few months ago I had pegged it as being gone by the end of the summer. It made it so I believe it will continue to survive.