UA Announces Q1 2020 Financial Results 30 April / Conference Call 01 May
Apr 30, 2020, 10:19 pm
#16
Join Date: Feb 2002
Location: BNA
Programs: HH Gold. (Former) UA PP, DL PM, PC Plat
Posts: 8,184
The CARES Act grant doesn't cover payroll. It is equal to the 2019 payroll during the same time period. Each airline has more employees, and employees have a higher average pay rate, than in 2019 so the grant falls short.
Many of the crewmembers who have taken voluntary reduce or no-pay lines either have high-risk family members or have a difficult commute with the reduced schedules.
Many of the crewmembers who have taken voluntary reduce or no-pay lines either have high-risk family members or have a difficult commute with the reduced schedules.
May 1, 2020, 7:04 am
#17
Join Date: May 2013
Posts: 3,361
Notable is that UA expects to be burning cash at a rate of $40 to 45m per day throughout the quarter, which compares favorably to Delta ($50m/day target by May) and American (>$70m/day currently, expected to get to $50m by June). It's more in line with Southwest, which is reporting $30-35m/day cash burn. UA and DL each plan to end the quarter with around $10b in liquidity, while American will be at around $11b. The market reacted favorably to the disclosure that United isn't lighting cash on fire quite as efficiently as its peers... but it's close. United's international exposure still represents a lot of risk as we move forward, at least as compared to AA/DL/WN. That is priced into United's valuation right now, which is more aligned with AA, despite a healthier balance sheet and better cash burn rate, than DL/WN.
Cash is the name of the game right now and it's critically important that UA try to burn less of it as we hopefully are beginning the slow crawl up from the bottom.
Cash is the name of the game right now and it's critically important that UA try to burn less of it as we hopefully are beginning the slow crawl up from the bottom.
Regardless, United is doing a solid job trying to manage through this crisis. They started off in a weaker financial position than Southwest or Delta, but have moved more aggressively to right size and may come out better positioned. That all depends on how/when demand recovers.
What’s clear to me is that AA is not in a good place and will almost certainly need to reorganize. I don’t see a similar conversation happening for United right now.
May 1, 2020, 7:30 am
#18
Join Date: Jan 2005
Location: New York, NY
Programs: UA, AA, DL, Hertz, Avis, National, Hyatt, Hilton, SPG, Marriott
Posts: 9,452
The CARES Act grant doesn't cover payroll. It is equal to the 2019 payroll during the same time period. Each airline has more employees, and employees have a higher average pay rate, than in 2019 so the grant falls short.
Many of the crewmembers who have taken voluntary reduce or no-pay lines either have high-risk family members or have a difficult commute with the reduced schedules.
Many of the crewmembers who have taken voluntary reduce or no-pay lines either have high-risk family members or have a difficult commute with the reduced schedules.
May 1, 2020, 7:38 am
#19
Join Date: Jul 2005
Location: back in the saddle in AMWAJ
Programs: EK PLAT 2022-2023, UAplat soon to be LH senator!
Posts: 367
i was thinking the same thing until i was speaking to a few ual agents in denver and they have been told that all customer service and ground workers are being forced to part time from full time, i guess when oscar,doug and ed helped write the cares act they left that little loophole in there, if true that would essentially amount to a 50% paycut for any full time ground worker at united, their reasoning for taking a voluntary furlough is they can tap into unemployment pay and i guess qualify for the additional $600 per week that was written into the package for those that were furloughed due to covid19.
May 1, 2020, 7:54 am
#20
FlyerTalk Evangelist
Join Date: Aug 2005
Location: BOS/EAP
Programs: UA 1K, MR LTT, HH Dia, Amex Plat
Posts: 32,052
May 1, 2020, 7:57 am
#21
Join Date: Feb 2008
Location: Chicago, IL
Programs: Marriott Ambassador, UA Mileage Plus 1K, AA Executive Plat, Marriott Ambassador Elite
Posts: 2,344
spartacusmcfly,
i was thinking the same thing until i was speaking to a few ual agents in denver and they have been told that all customer service and ground workers are being forced to part time from full time, i guess when oscar,doug and ed helped write the cares act they left that little loophole in there, if true that would essentially amount to a 50% paycut for any full time ground worker at united, their reasoning for taking a voluntary furlough is they can tap into unemployment pay and i guess qualify for the additional $600 per week that was written into the package for those that were furloughed due to covid19.
i was thinking the same thing until i was speaking to a few ual agents in denver and they have been told that all customer service and ground workers are being forced to part time from full time, i guess when oscar,doug and ed helped write the cares act they left that little loophole in there, if true that would essentially amount to a 50% paycut for any full time ground worker at united, their reasoning for taking a voluntary furlough is they can tap into unemployment pay and i guess qualify for the additional $600 per week that was written into the package for those that were furloughed due to covid19.
May 1, 2020, 8:25 am
#22
Join Date: Jan 2005
Location: New York, NY
Programs: UA, AA, DL, Hertz, Avis, National, Hyatt, Hilton, SPG, Marriott
Posts: 9,452
Should come as no surprise, but most real estate projects have been suspended, including the United Club projects at ORD, EWR, IAD (assuming IAD is Polaris Lounge).
May 1, 2020, 9:28 am
#23
Moderator: United Airlines
Original Poster
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.995MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,854
May 1, 2020, 3:37 pm
#24
Join Date: Apr 2019
Posts: 207
It’s difficult to compare the cash burn rates among airlines - as stated - because not everyone is treating refunds of Air Traffic Liabilities consistently. Southwest’s burn rate excludes ATL refunds, while AA has very a very aggressive increase in the forward booking curve and slowing of refunds. Delta’s cash burn rate assumes negative net bookings for a few more months. We will know what United’s number includes after the earnings call.
Regardless, United is doing a solid job trying to manage through this crisis. They started off in a weaker financial position than Southwest or Delta, but have moved more aggressively to right size and may come out better positioned. That all depends on how/when demand recovers.
What’s clear to me is that AA is not in a good place and will almost certainly need to reorganize. I don’t see a similar conversation happening for United right now.
Regardless, United is doing a solid job trying to manage through this crisis. They started off in a weaker financial position than Southwest or Delta, but have moved more aggressively to right size and may come out better positioned. That all depends on how/when demand recovers.
What’s clear to me is that AA is not in a good place and will almost certainly need to reorganize. I don’t see a similar conversation happening for United right now.
May 1, 2020, 4:33 pm
#26
Join Date: Jan 2005
Location: New York, NY
Programs: UA, AA, DL, Hertz, Avis, National, Hyatt, Hilton, SPG, Marriott
Posts: 9,452
Right now, the most important thing is to project some stability of leadership, and make changes, if necessary, when the dust settles.
May 1, 2020, 6:48 pm
#27
Join Date: Jan 2018
Programs: UA LT GS | UA LT Club | Marriott LT Titanium
Posts: 1,250
As for the board, they should look in the mirror. They approved a growth plan that relied on so much more debt than the rest of the industry.
May 1, 2020, 7:46 pm
#28
Join Date: Aug 2010
Location: Morris County, NJ
Programs: UA 1K/*G, Avis Pres, Marriott Plat
Posts: 2,305
I’m heartened by what I see. The fruits of Oscar’s labor run deep. It’s apparent to see management’s culture towards doing everything they can to be there for their employees first - that hasn’t always been a hallmark of this company.
I think they’ll be fine. I can say - once the shackles come off - I look forward to many many more years of Flying the Friendly Skies - and only Friendly Skies.
May 2, 2020, 9:43 am
#29
Join Date: Mar 2005
Location: Austin, TX
Programs: CoUniHound 1K 1MM, AA EXP 2MM, DL Plat, Marriott Lifetime Titanium
Posts: 1,625
https://www.chicagotribune.com/coron...it4-story.html
May 2, 2020, 9:47 am
#30
Join Date: Jan 2005
Location: iah
Programs: ua-mm *G, hilton-gold
Posts: 704
Josh Hawley
@HawleyMO
My letter to
@united
airlines CEO. Congress gave you money to pay your workers. So pay them. No tricks, no excuses
