I agree with you.

A couple of additional random thoughts:

1. Arpey appears to actually believe that bankruptcy is immoral, and he has repeatedly stressed that AMR "took the high road" by calling off the Ch 11 filing moments before it happened.

2. UAL's cash had indeed declined faster and farther than AMR's cash. When UAL filed, it was less than $800 million of unrestricted cash. More than 4 months later when AA secured its massive employee wage concessions, AMR still had slightly over a billion of unrestricted cash (the minimum level to avoid default on most of its obligations).

3. A major difference between UAL and AMR was the pension deficit. AMR's deficit was much smaller and managable than was UAL's deficit. Under the rules existing in 2002-03, UAL would have had to contribute nearly $2 billion to its plans, which it clearly did not have. Further, no sane lender would have loaned UAL the money only to see it contributed to the pensions, given the possibility of shedding the obligations in bankruptcy.

AMR, on the other hand, was able to make its 2002 minimum contributions (and all subsequent minimum contributions) because its plans funding levels never fell as far underfunded as UAL's plans. In April, 2003, when AA secured its employee wage givebacks, AMR was able to borrow more much-needed cash to get it through the rest of the second quarter while the wage concessions ramped up.

4. One major cause of UAL's inferior finances in late 2002 (compared to AMR's) was that UAL's yield and RASM (measures of unit revenue) declined much more than did AMR's unit revenue. Total UAL passenger revenue fell off a cliff as well: "The Company’s passenger revenues have plunged from $16.9 billion in 2000 to $13.8 billion in 2001 and a projected $11.8 billion for 2002."

http://www.pd-ual.com/Downloads/Info...ines%20Inc.pdf (page 5)

AMR's revenues were off as well, but nowhere near as much as at UAL. AA's unit revenues were higher in 2000 than were UAL's and at no time since has UAL been able to charge as much per mile as has AA.

In summary, UAL's 2001 revenues, already in decline prior to September 11, were hammered severely by the terrorist attacks and the subsequent air travel downturn. After that, the SARS scare hit UAL hardest (due to its extensive Asian exposure). Then, of course, higher fuel hit every airline. Fortunately, things are finally turning around at UAL.