Shares of UAL sank $3.86, or 21 percent, to $14.77 last week, after CEO James Goodwin issued his surprising warning.
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United workers' dream fades Employee ownership turns ugly with layoffs, pay cuts
...But even those still working face belt-tightening. One way the airline says it can stave off bankruptcy-court reorganization is by getting billions in concessions from its unions to help secure a $1.8 billion federal loan guarantee. The unions have tentatively offered $5.8 billion in pay cuts over 5 1/2 years. Over the weekend, the pilots union tentatively agreed to 18% pay cuts worth $2.2 billion.
Monday, stock of United parent UAL jumped 24% to $3.18 as Wall Street cheered the news about the pilots. But for United workers, there's little to cheer.
About 18,000 mostly newer employees have been laid off. United just announced plans to ax another 1,250. Many of the remaining 81,500 employees worry about supporting their families today and salvaging their retirement savings for tomorrow.
United's layoffs are a snapshot of a much bigger industry dislocation. There were 53,000 fewer people, about 10% of the total workforce, employed in the airline industry in the third quarter compared with the same period last year, according to the Air Transport Association, the airlines' trade group. Airlines have announced another 20,000 cuts, including 6,700 at American, 8,000 at Delta, and 2,100 at US Airways, which already is in bankruptcy protection. More are inevitable...
Forbes Magazine said this week that the value of Southwest Airlines' stock is greater the the value of all other airlines' stocks combined!"
I know that Southwest has a great model, but they are worth more than Delta, United, American, etc. combined? I was thinking about buying some WN stock, but maybe not now.
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by freakflyer: Forbes Magazine said this week that the value of Southwest Airlines' stock is greater the the value of all other airlines' stocks combined!"
I know that Southwest has a great model, but they are worth more than Delta, United, American, etc. combined? I was thinking about buying some WN stock, but maybe not now.
ff</font>
Old news. I posted this information back on 9/28.
9/28/01
in Billions
Southwest Airlines Co 11.330
US Airways Group, Inc 0.312
Alaska Air Group, Inc 0.529
America West Holdings Corporation 0.624
Hawaiian Airlines, Inc 0.742
Continental Airlines, Inc 0.820
Northwest Airlines Corporation 0.972
UAL Corporation 0.986
AMR Corporation 2.955
Delta Air Lines, Inc 3.240
Total of all other then SW 11.180
Difference SW > all others 0.150
[This message has been edited by egarrett (edited 10-21-2001).]
It's called profit and expectations of future profit and growth.
Southwest is consistently profitable and looks to continue to grow while being profitable. Hardly any of the other airlines have demonstrated that they can be consistently profitable, let alone grow while being profitable.
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Trying not to believe what I think.
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by freakflyer:
[b]Forbes Magazine said this week that the value of Southwest Airlines' stock is greater the the value of all other airlines' stocks combined!" </font>
Hmmmm, sounds like what happened with the dot coms and tech companies before the bubble burst, when Amazon was worth more than GM, Cisco had a larger market cap than GE, and so on.
In Alan Greenspan's words, it's irrational exuberance.
UAL now has a market cap of around $800 million, or less than the price of three 747s. I did a quick look at their books. They've got $20 billion in capital assets, and $12 billion in long term debt. So that means that they own around $8 billion in planes.
This is crazy -- their market cap is less than one tenth of the capital assets that they own!
Might be time to snap up some of the stock.
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Flying an aeroplane with only a single propeller to keep you in the air. Can you imagine that?
Shares of UAL Corp. parent of UA, rose nearly 9 percent early Monday after the No. 2 US carrier announced a new chief executive officer over the weekend.
Shares of UAL were up $1.27 to $15.19 shortly after opening on the New York Stock Exchange.
Analysts said they expected major changes at United in the wake of the management change.
``Overall, we view the change in leadership as a positive development for UAL which is on track to post its worst annual loss ever -- $2.1 billion for 2001,'' said Merrill Lynch analyst Michael Linenberg.
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mdtony: Hmmmm, sounds like what happened with the dot coms and tech companies before the bubble burst, when Amazon was worth more than GM, Cisco had a larger market cap than GE, and so on.</font>
Hmmmm, but Southwest has earnings that are in excess of the rest of the industry combined. Show us when Amazon and Cisco earned more than GM and GE. Wrong analogy.
Besides, Southwest is trading at an earnings multiple cheaper than the S&P 500, and they have arguably better growth prospects.
Quote:
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mdtony: UAL now has a market cap of around $800 million, or less than the price of three 747s. I did a quick look at their books. They've got $20 billion in capital assets, and $12 billion in long term debt. So that means that they own around $8 billion in planes.
This is crazy -- their market cap is less than one tenth of the capital assets that they own!</font>
Look at their cash burn rate and liquidity.
1. UAL can't liquidate planes rapidly to generate cash.
2. They certainly will not get book value if they liquidate in a hurry.
3. They can have all the assets they want but without cash to pay their bills they are done.
