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UA's Viability / Financial Future due to the COVID-19 Era [Consolidated]

Old Mar 20, 2020, 9:29 pm
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In recent days a number of threads have started touching on the impacts on UA as a business going forward due to the travel disruption of COVID-19 --- including multiple Viability / Bankruptcy / Bailout discussions. While inconceivable a few months ago, UA (and all commercial airlines) is facing challenges that are uncharted.

This consolidated thread has been created by merging a number of existing threads that trend to address essentially the same subjects.

Some thread guidelines
-- This thread / forum is for discussing UA and the UA traveler, so please focus on UA in these discussions. Other forums exist to discuss other carriers or the industry in general -- we do just UA here.
-- This thread is for discussion of how UA gets from here to its future state.
-- All the standard FT rules apply. We will have a civil, constructive, collegial discussion -- even in these turbulent times.
-- While much of this will play out in the political arena, this forum is not the place for political / OMNI discussions. Please use threads in appropriate forums for that, such as Covid-19 US tax cuts or fiscal stimulus
-- Similarly, discussions of the evils / greed of corporations or other broad societal issues are out of scope, those are for OMNI -- let's stick to discussing UA, its past and its future here
-- Please do not start new threads on these topics in the UA forum. One reason for this consolidated thread was to minimize the redundant posts in separate threads. There is plenty of room in the scope of this thread to cover all aspects of these topics. (Note things like M&A, restructuring, ... would all be in scope).
-- Please once you have laid out your position, do not repetitively re-state that opinion. It is usually a better discussion if many participate vs a few dominating the thread

On behalf of the UA Moderator Team
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UA's Viability / Financial Future due to the COVID-19 Era [Consolidated]

Old Jan 23, 2021, 8:46 pm
  #1126  
 
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Originally Posted by bocastephen
That's already in progress - there is mounting evidence the South African variant is able to get by the Pfizer vaccine, no word on Modern or the others, so the writing is on the wall that mutations will likely require frequent vaccine updates and booster shots, and the rollout of the vaccine at least in North America is a complete cluster-mess (except maybe for West Virginia), plus there is no progress on a global consensus around vaccination proof and how it will affect travel - in fact, Canada is about to shut down the remaining loophole which will ban air travel into Canada by visitors except in limited circumstances (formerly only the land border was closed).

So the trajectory is not looking good for United, or any global airline, in 2021. I would say only B6 being mostly domestic/Caribbean, AS and WN are in a better position to weather the storm since they don't rely on international traffic.

I am in still in favor of a forced CH11 to eliminate shareholder equity before any further government hand-outs to ensure the US Treasury has complete control and retains all the proceeds from any future re-issuance of stock.
You have a pessimistic perspective and I think youre portraying a situation that results in a global depression. At least there would be no FlyerTalk for all of the hot takes.

I hope, for all of us, including United employees, things turn out better.
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Old Jan 24, 2021, 2:14 pm
  #1127  
 
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Interesting with Israeli airspace shutting down soon to outside countries - I think a decent chance countries as they start vaccinating may double down in 2021 on flight restrictions especially from the US
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Old Jan 24, 2021, 4:30 pm
  #1128  
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Getting off topic again. The speculation on the future of vaccinate progress and how countries will handle this is a very general Coronavirus and travel topic.

Let's return to the UA viability discussion.

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Old Jan 24, 2021, 4:59 pm
  #1129  
 
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Rumored the Biden administration will add South Africa to the banned list, did UA ever start flying there?
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Old Jan 24, 2021, 5:11 pm
  #1130  
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Originally Posted by worldtrav
Rumored the Biden administration will add South Africa to the banned list, did UA ever start flying there?
Not presently and no resumption date
UA to launch Seasonal EWR-CPT - cancelled for 2020-2021 Season

Last edited by WineCountryUA; Jan 24, 2021 at 6:12 pm Reason: link
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Old Jan 24, 2021, 11:36 pm
  #1131  
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Let's just say I am looking at UAL June 2021 22 Strike puts - I think we're in for a decline of at least that as the vaccination schedule continues to fall apart, countries return to travel exclusion mode, and lockdowns begin spreading. I think the airline industry is in for a very rough ride in 2021 and any optimism is very misguided. Looking at the recent earnings call notes, I think UAL is in a complete state of denial and has no idea how to handle a multi-year collapse in global air travel. Some of those management comments are so beyond laughable, they border on negligence.

Time for new management!
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Old Jan 24, 2021, 11:42 pm
  #1132  
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Originally Posted by bocastephen
Let's just say I am looking at UAL June 2021 22 Strike puts - I think we're in for a decline of at least that as the vaccination schedule continues to fall apart, countries return to travel exclusion mode, and lockdowns begin spreading. I think the airline industry is in for a very rough ride in 2021 and any optimism is very misguided. Looking at the recent earnings call notes, I think UAL is in a complete state of denial and has no idea how to handle a multi-year collapse in global air travel. Some of those management comments are so beyond laughable, they border on negligence.

Time for new management!
What? I didn't check out the earn call notes, but I think the blogs quoted Kirby as saying he doesn't think a recovery will happen in earnest until 2023 at the earliest. That's more pessimistic than DL.

Originally Posted by fly18725
You have a pessimistic perspective and I think you’re portraying a situation that results in a global depression. At least there would be no FlyerTalk for all of the hot takes.

I hope, for all of us, including United employees, things turn out better.
The airlines are understandably frustrated because global travel cannot resume until the pandemic is under control. I don't know what UA's finances are like. It may very well be that 2021 will turn out to be a lost year. Who knows? Things don't look very good at the moment.

Last edited by WineCountryUA; Jan 25, 2021 at 12:54 am Reason: merging consecutive posts by the same member; removed content per Moderator note
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Old Jan 25, 2021, 12:51 am
  #1133  
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While the future impacts of COVID and progress of vaccinations will color one's view of the future, this is not the forum for debating those points of view. As you state your opinion of UA's future based on your speculation, let's NOT get into a debate of the COVID future, UA is the topic of this forum. COVID's future is the topic of the Coronavirus and travel forum.

Realize that may feel like an odd request but if this turns into a debate of the COVID future, it will not stay in the UA forum. Just remember this forum is for UA discussions.

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Old Jan 25, 2021, 10:52 am
  #1134  
 
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Originally Posted by bocastephen
Let's just say I am looking at UAL June 2021 22 Strike puts - I think we're in for a decline of at least that as the vaccination schedule continues to fall apart, countries return to travel exclusion mode, and lockdowns begin spreading. I think the airline industry is in for a very rough ride in 2021 and any optimism is very misguided. Looking at the recent earnings call notes, I think UAL is in a complete state of denial and has no idea how to handle a multi-year collapse in global air travel. Some of those management comments are so beyond laughable, they border on negligence.
We must have read or listened to a different earnings call. I've pointed out in several threads that UA doesn't expect 2023 to reach 2019 levels, but things should be improved - and I've gotten responses of people thinking record demand coming as early as March/April (nope) - I've pointed out extended lockdowns - and that was seemingly dismissed in its entirety - most companies have publicly stated business travel is off the table until July - but that will certainly be extended until the end of the year - and this is an even if, even if the US gets to 10,000 cases a day by September, I don't see the world finding that acceptable to welcome US fliers when some countries are at zero or near zero - I don't see Disneyland packed and pent up demand for travel doesn't matter with restrictions or things closed. Hawaii is running less than 20% occupancy (and not all hotels open) and while you need a test to get in, it is largely unrestricted. No pent up to demand to a largely empty Hawaii.

Regardless, UA has been very transparent in my opinion of a bleak 2021 and 2022 with no meaningful recovery until 2023.
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Old Jan 25, 2021, 11:03 am
  #1135  
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Originally Posted by HNLbasedFlyer
We must have read or listened to a different earnings call.
You know how it is. Some people are glass-half-full, some are glass-half-empty, some are "it's probably poisoned," and some are "I think it's a glass of a super-rare fluid that's worth a hundred googol dollars!"
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Old Jan 25, 2021, 2:12 pm
  #1136  
 
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Originally Posted by bocastephen
Let's just say I am looking at UAL June 2021 22 Strike puts - I think we're in for a decline of at least that as the vaccination schedule continues to fall apart, countries return to travel exclusion mode, and lockdowns begin spreading. I think the airline industry is in for a very rough ride in 2021 and any optimism is very misguided. Looking at the recent earnings call notes, I think UAL is in a complete state of denial and has no idea how to handle a multi-year collapse in global air travel. Some of those management comments are so beyond laughable, they border on negligence.

Time for new management!
As alluded to; if there were, at present, serious concerns about any of the US3 entering into Ch.11 then the stock price would be reflecting that as it did with Hertz in May (save for the Robinhooders turning it into a Meme stock for a small while).
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Last edited by WineCountryUA; Jan 25, 2021 at 2:18 pm Reason: Dicuss the issue, not the poster(s)
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Old Jan 25, 2021, 2:32 pm
  #1137  
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Originally Posted by bocastephen
Let's just say I am looking at UAL June 2021 22 Strike puts - I think we're in for a decline of at least that as the vaccination schedule continues to fall apart, countries return to travel exclusion mode, and lockdowns begin spreading.
Originally Posted by ChurnieEls
As alluded to; if there were, at present, serious concerns about any of the US3 entering into Ch.11 then the stock price would be reflecting that as it did with Hertz in May.
UA's stock price, in particular, does not reflect a likelihood of bankruptcy. That can be verified by comparing stock price and put option charts which I understand are not permitted to be posted in this bankruptcy discussion.
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Old Jan 25, 2021, 2:43 pm
  #1138  
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Also UA‘s bonds are trading around par. A long way from the discounted prices seen last year.
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Old Jan 26, 2021, 10:10 am
  #1139  
 
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Here's a chart of domestic air travel in a Covid-free country with a large domestic economy. The US is 7% vaccinated, growing at roughly 1%/day. So in roughly 100 days, why wouldn't United's domestic traffic be back to 2019 levels?

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Old Jan 26, 2021, 10:45 am
  #1140  
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Originally Posted by spartacusmcfly
...The US is 7% vaccinated, growing at roughly 1%/day. ....
Those are both inaccurate. To be fully vaccinated for the presently approved vaccines it takes 2 shots (J&J is working on a single shot vaccine). Barely 1% of the US population has been fully vaccinated at this point.

https://www.bloomberg.com/graphics/c...-distribution/
https://www.nbcnews.com/health/healt...s-u-s-n1252085

===============================

Once again please have this US vaccination rate discussion in the Coronavirus and travel

The purpose of this thread is what UA is doing to handle the financial impact of COVID and will UA be successful at those actions.

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