Originally Posted by GUWonder
United Airlines as a whole is losing money and was bleeding cash. The frequent flyer program unit -- MileagePlus -- was taking in cash faster than it was spending it and was a profit center when looked at as a standalone unit. I hope that helps explain it a bit.
Also, a business unit can be worth more than its parent. And when the parent company or parent company's other main units are generating losses and drawing down the cash while one subsidiary is not, a break-up could show that one subsidiary is worth more than the (former) whole -- since the value of the loss-making business units (as one entity) can be far lower than that of a profit-making business unit by itself.
This is "sort of" true. It may be cash-flow positive, but to consider it as a standalone entity is difficult as its product, and hence its revenues, are dependent on the loss-making airline--viewed another way, it is a profit center, but its fortunes are directly tied to the parent (e.g., no way to spin it off from the airline).
Captive finance units of auto companies are in an analogous situation in some ways--although many have diversified significantly, the profits derived from their leasing/lending for cars are dependent on their loss-making US manufacturer parent. Spinning these guys off could be difficult since their value is in large part dependent on the relationships they have with the auto maker.