UAL's employees, who own about 55% of UAL stock, appear unlikely to push the company into Chapter 11, since the value of their stake would be effectively eliminated.
...On Monday, the recommendation by a federal emergency board that its mechanics and ground crew get a 13.5 percent raise was met with a cool reception from the UAL (UAL: news, chart, profile) unit. While the No. 2 carrier said it would hold off on a response until after market close Tuesday, it noted that it "has serious reservations" about the proposal - made in an attempt to avert a possible Feb. 20 strike...
Shares in UAL were off a buck even, or over 6 percent, out of the gate; the Amex Airline Index fell (XX:$XAL: news, chart, profile) about 1 percent to 90.73.
Shares in UAL now off $1.70, or 11%, to $14.30 in recent trading!
---
UPDATE:
Spokeswoman Susana Leyva said the carrier's labor committee late in the day accepted the recommendations from the board, which were made over the weekend.
I believe Feb 1 UA will announce quarterly earnings...unfortunatley it may be the greatest quarterly loss in airline history. Viva UA! Get better fast!
__________________
Trying not to believe what I think.
UAL shares have lost almost two-thirds of their value in 12 months. The Bloomberg U.S. Airlines Index declined 28 percent in the same period. UAL shares rose 13 cents to $14.70 yesterday.
While UA bested many estimates, their labor costs were about 38% of total expenses, clearly among the highest in this industry.
UAL claims its daily cash burn rate in the 1st Q was approximately $10 million!
You really wanna' own this stock?
[This message has been edited by doc (edited 02-01-2002).]
Kevin Murphy, Morgan Stanley Dean Witter's airline analyst, said the $4 billion in assets "weren't sufficient for an airline that size," because United had so much debt.
Programs: AA EXP 2MM, UA 1K, Hyatt Diamond, enjoying the retired life
Posts: 18,078
Doc-
Thanks for that link. I'm not happy to see this line in the story:
Its machinists are scheduled to vote Feb. 12 on United's contract proposal. Union sources said it was unlikely its members would accept the airline's offer and predicted a strike could come as early as Feb. 19. A strike, even one lasting a few days, could cost United millions in revenue at a time when it is struggling financially, analysts said.
__________________ link to my travel photos new: Haleiwa, USS New York, Blue Angels in San Francisco
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by doc: Kevin Murphy, Morgan Stanley Dean Witter's airline analyst, said the $4 billion in assets "weren't sufficient for an airline that size," because United had so much debt.
He is perhaps the most widely respected analyist in the airline sector!</font>
Yes, Kevin is VERY highly respected. Him and Ray Niedl would probably be the top guys in the industry right now.
However, I can't believe that he is being quoted in context. UAL has $4 billion in UNENCUMBERED assets available, in addition to the flight equipment already pledged as collateral for the secured debt. A combination of the unencumbered assets and cash position shows UAL to be decently well off as far as long term debt goes.
Keith Alexander tends to mess up his numbers sometimes. He's almost misquoted me a couple of times, but fortunately no harm came of it. I have a feeling a similar fate was in store for Kevin.
I guess one can never be absolutely sure of select quotes - yet it is not pretty picture, IMHO!
---
One can never accurately predict these things, Tom, IMHO, at least!
--
Shares of UAL parent of United Airlines, fell $1.11 to $12.32, a drop of 8.27 percent, on the New York Stock Exchange on Monday afternoon, on persistent concerns over the health of the No. 2 U.S. carrier following its record 2001 net loss of $2.1 billion reported last week, analysts said. UAL shares sank to $12.13 earlier in the session.
