<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by doc: The world's second-largest airline is also dealing with a severe drop in high-paying business passengers, an impending strike deadline for its mechanics and a stock price that has fallen from $40 a year ago to close at $11.64
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I'd say that the stock is currently a bit of a poor bet as well! </font>
It's a good thing I don't visit FT for stock picking advice!
Shares of UAL Corp. were off 83 cents, or 5.1 percent, at $15.57 in Tuesday trading on the New York Stock Exchange, following the shares of other major U.S. carriers that fell on Tuesday after booking sharp gains in Monday's session.
On Tuesday, United Airlines' UAL mechanics and cleaners approved a new five-year contract that will increase top wages for the two groups by 37% and 19%, respectively. Although approval was expected, the voting was closer than we would have thought, with only 59% voting yes. The deal is done, however, and now management can turn its attention to a new contract with ramp workers, clerks, and reservationists. Once this is behind it, UAL will be able to work on gaining concessions from its employees, a necessary step toward ensuring the airline's long-term viability.
UAL, the parent of United Airlines, said Wednessday that machinists would get 19%-37% raises, which allows UAL to avoid a crippling strike. The stock rose sharply on Monday, in advance of the news. Investors now are likely to focus on core problems at the company, which include an unsustainable cash burn rate, huge losses and the need to gain concessions from all of the company's unions. UAL has three other unions to settle with. S&P sees large losses in 2002 and 2003 and feels the company is likely to take on more debt to remain liquid. This will worsen sn already shaky balance sheet. S&P still sees a high risk of bankruptcy.
Airline analyst Michael Friedman of American Express Financial Advisors said labor givebacks are necessary for United, but even with them the carrier won't be profitable until business travelers start flying again in greater numbers. The airline probably won't turn a profit regardless until 2004 or later, he said.
Months later... for hose still holding shares...or otherwise interested:
United Airlines' May unit revenue beat industry
United Airlines' May unit revenue, a key measure of airline industry health comparing money taken in with each available seat mile, fell 3 to 4 percent in May from year-ago levels, Reuters learned on Tuesday, a better performance than expected for the industry overall.
Shares of UAL closed 47 cents lower at $11.38, a drop of about 4 percent, on the New York Stock Exchange on Tuesday. The shares remain about 50 percent below their levels before the hijackings, which involved two United planes.
Well doc strictly speaking UA closed at $8.50 YESTERDAY, and 'today' might be another nasty story altogether. I guess in a few hours that story will be clearer. But seeing it is 'tomorrow' here (Sat 13th) for most readers, but still today for me the 'today' and 'yesterday' references are moot anyway as they are wrong for me and correct for you, but doc's post was a day out, but not wrong. Confused?
This link below was good for yesterday. And will be correct later today, and also be correct tomorrow, (for today) and OK next week too.
The company expects to report a significant third quarter and full-year loss. Additionally, booked load factors for the third-quarter are currently running behind last year's numbers. However, with bookings shifting to closer in, United expects actual load factors to be about equal to third quarter 2001.
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