US Airways Dividend Miles (Pre-FlightFund Merger) - US expects to see profit in '06

http://www.post-gazette.com/pg/05041/455363.stm

US Airways is predicting that it will lose another $288 million this year before turning a $50 million profit in 2006 -- its first lucrative haul in seven years.

The company yesterday would not confirm the figures, which the Post-Gazette obtained from participants at a meeting last week between executives and labor officials at the airline's Arlington, Va., headquarters.

After years of triple-digit-million dollar losses, I don't think "lucrative" is exactly the adjective I'd choose to describe a 50 million dollar profit... ;)

In this market of high fuel costs and low fares, any profit that US makes will be squarely on the backs of their employees.

By the end of 2006, US will be consolidated with United........so they might as well predict that they'll make a zillion dollars!

After years of triple-digit-million dollar losses, I don't think "lucrative" is exactly the adjective I'd choose to describe a 50 million dollar profit... ;)

seems like they'd need to predict more profits than that anyway, if they're to attract several hundred million in external exit capital by June '05...

seems like they'd need to predict more profits than that anyway, if they're to attract several hundred million in external exit capital by June '05...

a profit is a profit - in this business that would put them ahead of almost every carrier - including some LCC's

you can run a business permanently on $1 profit - a few hundred million would be nice but $50m would be awesome

a profit is a profit - in this business that would put them ahead of almost every carrier - including some LCC's

you can run a business permanently on $1 profit - a few hundred million would be nice but $50m would be awesome

I agree with that in principle, if you already have capital in place as "sunk" investment. US does not. They need to attract several hundred million to escape court, and no, the prospect of $1 a year, or even $50m a year, won't do that. they need to have projections such they can credibly promise an arms-length investor that US can provide them a suitable net return on that several hundred million dollars.

Also just went back and compared projections, and it confirms the latest announcement seems a little at odds with the stated goals:

new projection (2/05): 2005 lose 288m, 2006 make 50m.
old projection (12/04): 2005 lose 200m, 2006 lose 25m.

what's different over the two years is, on balance, acceleration of part of 2006's negatives into 2005. perhaps the plan is to carve that difference out of the hide of the current creditors; if so, then perhaps it will at least help attract new investors. we shall have to see what sort of reorg plan is filed in the upcoming month, I suppose.

I agree with that in principle, if you already have capital in place as "sunk" investment. US does not. They need to attract several hundred million to escape court, and no, the prospect of $1 a year, or even $50m a year, won't do that. they need to have projections such they can credibly promise an arms-length investor that US can provide them a suitable net return on that several hundred million dollars.

If the capital to get out of bankruptcy is debt, then net profit is after having paid the interest expense. So someone lending US $500 M at a risk-adjusted 8/10/15/whatever percent will have received their promised payback at the agreed to rate, and US still comes out with a profit. It doesn't do much for equity holders, but those who invest the capital get exactly what they expected when they approved the deal and would be happy

IANADealMaker (or is that makur?) so I'll leave it to the experts to correct me.

Oh, and since I'm feeling particulary pedantic this morning, the definition of "lucrative" is "profitable; producing wealth", so it is perfectly appropriate

Oh, and since I'm feeling particulary pedantic this morning, the definition of "lucrative" is "profitable; producing wealth", so it is perfectly appropriate

Denotatively, you are correct.

Connotatively, "lucrative" is definitely not the best adjective.

According to Webster, I've just created one new adverb. ^

If the capital to get out of bankruptcy is debt, then net profit is after having paid the interest expense. So someone lending US $500 M at a risk-adjusted 8/10/15/whatever percent will have received their promised payback at the agreed to rate, and US still comes out with a profit. It doesn't do much for equity holders, but those who invest the capital get exactly what they expected when they approved the deal and would be happy


IF the projections are indeed for "net" profits, and IF the exit capital is all debt, then absolutely that's the case. But then that leaves the equity holders being solely today's current creditors, which isn't an equilibrium since they are going to have to vote, class by class, on whether US exits court at all.

A significant chunk of the exit financing is going to have to be new equity, in all likelihood.

By the end of 2006, US will be consolidated with United........so they might as well predict that they'll make a zillion dollars!

Since when?