United Airlines bankruptcy
 

I was so shocked to hear United Airlines may be filing bankruptcy in the next 30 days. Anyone have any further information on this?<BR><BR>Sue

Where did you hear that? There are a lot of articles and analysis from good media sources on this topic within the last 6 months (and recently, of course) if you really want to read more, but I haven't seen any 30 day comment anywhere in any quote from the company, which would be the appropriate source--they threatened mid-November. They are doing that to try to blackmail the Federal govt into giving them loan guarantees and for labor reasons, I'd guess, they do that all the time (threaten to go bankrupt). I don't think they are very well managed and they have a lot of labor problems, I think pilots are a problem (high wages) and mechanics, and their mgt structure is unusual, if I recall. I have a nephew who works for them, so I hear some stuff from him, but I haven't heard what you said.

This was posted on 'Airlines' forum. This came from Wall Street Journal on 8/13. Pretty reliable source, I believe.<BR><BR>It was reported today by UA execs that possibly within a month UA will go Chapter 11, just like USAir. They will talk to suppliers and employees and unless they get big concessions, they will have no choice but to file. Just reporting the news.

Industry analysts are describing the USAir bankruptcy as "inevitable" due to the airline's inability to reach an appropriate reduction in their labor costs with the machinists. When they took the $900 million in loan guarantees, this was part of the terms required by the government. The expectation is that this bankruptcy will bring the machinists to the table.<BR><BR>Over-capacity caused this. At leastwhen it comes to US-based airlines. Maybe SwissAir and Sabena were also the excess that needed to be wrung out of Europe's skies. Over-capacity is getting eliminated in air travel, and new models for price, service, convenience and value are going to emerge.<BR><BR>And I would predict more layers in the models than ever before. Already, time-shared private jet is quickly becoming the new first-class.<BR><BR>Will time-shared 50-seaters like the Saab and Embraer be next? If ten-seaters are flying from Teterboro to Washington for $3000 a seat, why not squeeze ten cramped seats into the back of an Embraer and charge $800 for those?<BR><BR>When 800 seat super jumbos are routinely flying trans-continental, other unprecednted air travel models will occur too.<BR><BR>And United has one unique reason to save the company and protect both the jobs of its employees, and the value of its shareholders' stock. Because those people are one and the same.<BR>

Christina,<BR><BR>I heard it from a friend in Chicago, that works for United......

While bankruptcy is a definite possible, they will certainly not cease operations.

It is reported that United has $2.7 billion in cash reserves! As previously mentioned in this thread, management's threat of filing bankruptcy is aimed at getting government loans and concessions from their employees. I'm sure if management pulls this off, they'll take home big bonuses at year end!<BR>Good thing the government not so long ago refused United's request to BUY US Airways!<BR>Greedy & inept management should not be rewarded with taxpayers' dollars.

Interesting item on Slate today:<BR><BR>http://slate.msn.com/?id=2069362<BR><BR>Best wishes... especially if you are an employee (and/or owner) at United...<BR><BR>Rex<BR>

ttt<BR>

Sure, there may be over $2 billion in reserves, but the airline is losing an estimated $2 million per day, & in the 4th quarter have to make a payment of about $945 million to cover back pay for mechanics. Plus all the media coverage will probably scare some of the vendors who will ask for cash payments, plus scare off some customers, who really should not have to worry. They should keep buying tickets for United without having to worry. Bankruptcy usally means some type of protection from creditors while the company restructures, but business keeps pperating.

I'm a United frequent flyer member and they emailed me directly stating what might happen, including bankruptcy. BUT, they stated they would continue to honor my miles. Hmmm, and what if they don't?

Why is that bad business? Why is United any different that any other corporation? It's life. If you lose $6 Million a day something has to change. That is a business plan that doesn't work.

Cheap Internet tickets are driving the nails into the coffin. Ua and the rest lose big bucks on those low low fares. So we'll be all buying the same fare from every site and agency pretty soon now. But, will you?

United Preferred flyer: You are right, something needs to change. But it needs to be noted that even though they have over $2 billion cash reserve now, that is not much when you are losing large amounts every day & looking at nearly 3/4's to $1 billion payout in the 4th quarter. $2billion is a nice reserv if you have money coming in every so often, but as it stands now, that $2 billion should not be used as an excuse to not do anything, or a reason for the unions to not take a cut. That $2 billion will disappear rapidly if UAL is not careful.

Close to $1 billion owed to United's mechanics to be paid before the end of the year? That's insane if true!<BR>What company's management would have signed off on such a deal?<BR>Look at AA, they are taking immediate action to reduce their daily losses. And they're not crying for a government handout! United should do the same.

I believe they have to pay their first payment of 70 million in December.

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