UAUA Q3 results/news/Mileage Plus/conference call discussion
Oct 20, 2008, 8:39 pm
#16
Join Date: Oct 2002
Location: Houston
Programs: AA EXP; Hyatt Globalist; Marriott Titanium, Hilton Diamond, UA 1.56MM (fmr UA1K)
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Oct 20, 2008, 8:41 pm
#17
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
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Posts: 38,265
TravelClub survived the demise of SR (SwissAir) and it greatly assisted in getting the successor airline LX on its legs ^.
That would be a fantastic move of UA and greatly boost my confidence collecting miles with them.
That would be a fantastic move of UA and greatly boost my confidence collecting miles with them.
Oct 20, 2008, 8:44 pm
#18
FlyerTalk Evangelist
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Location: Toronto, Ontario, Canada
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Oct 20, 2008, 8:47 pm
#19
Join Date: May 2001
Location: exUA1K, UA MM, lifetime UA1P, AA MM, HH Diamond, Marriott Gold
Posts: 3,731
Gee, with that HUGE liability off the books, UA might someday find a buyer, too.
Let's see....
Let's see....
Oct 21, 2008, 12:02 am
#20
Join Date: Oct 2004
Location: Clinging to the edifices of a decadent past from the biggest city in America nobody really cares about.
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Posts: 9,077
Oct 21, 2008, 12:04 am
#21
Join Date: Aug 2007
Location: Near SEA
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Posts: 7,969
Oct 21, 2008, 6:59 am
#22
Join Date: Mar 2008
Location: Houston
Programs: United MileagePlus Premier Silver/Hyatt Platinum
Posts: 360
$252 million loss ($779 million if you include the hedge losses) for the quarter. Someone must like the results...pre market trading has the stock over $13/share.
Oct 21, 2008, 9:10 am
#24
Original Poster
Join Date: Apr 2005
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Call just started... here is the full release of financials:
http://ir.united.com/phoenix.zhtml?c...939&highlight=
http://ir.united.com/phoenix.zhtml?c...939&highlight=
UAL Corporation Reports Third Quarter 2008 Results
Delivering Competitive Revenue, Controlling Costs, and Executing on Plan to Return to ProfitabilityCHICAGO, Oct. 21 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, reported a third quarter net loss of $779 million or $252 million, if non-cash, net mark- to-market losses on fuel hedge contracts and certain accounting charges are excluded, despite an increase of $946 million in consolidated fuel expense. For the third quarter ended Sept. 30, 2008, the company:
-- Reported basic and diluted loss per share of $1.99 excluding non-cash, net mark-to-market hedge losses and certain accounting charges outlined in note 5. United's reported GAAP loss per share was $6.13.
-- Recorded $519 million in non-cash, net mark-to-market losses on its fuel hedge contracts, as a result of the drop in oil prices at the end of the quarter. The company recorded a cash gain of $17 million on contracts that settled during the quarter bringing its consolidated cash fuel expense to $2.5 billion, $946 million higher than the prior year.
-- Reported a 6.1 percent increase year-over-year in mainline passenger unit revenue (PRASM), excluding special items and Mileage Plus accounting impacts. Including these items, mainline PRASM increased 4.5 percent year-over-year.
-- Demonstrated good cost control while reducing capacity, with mainline cost per available seat mile (CASM), excluding fuel and certain accounting charges, flat versus the same period in 2007, despite 4.0 percent lower capacity. Mainline CASM including fuel and certain accounting charges for the quarter was up 30.8 percent versus the third quarter of 2007, reflecting a 96.4 percent increase in mainline fuel price per gallon including non-cash, net mark-to- market hedge losses.
-- Raised $1.4 billion in cash through various activities including aircraft financings, asset sales and amending its credit card agreements.
Delivering Competitive Revenue, Controlling Costs, and Executing on Plan to Return to ProfitabilityCHICAGO, Oct. 21 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, reported a third quarter net loss of $779 million or $252 million, if non-cash, net mark- to-market losses on fuel hedge contracts and certain accounting charges are excluded, despite an increase of $946 million in consolidated fuel expense. For the third quarter ended Sept. 30, 2008, the company:
-- Reported basic and diluted loss per share of $1.99 excluding non-cash, net mark-to-market hedge losses and certain accounting charges outlined in note 5. United's reported GAAP loss per share was $6.13.
-- Recorded $519 million in non-cash, net mark-to-market losses on its fuel hedge contracts, as a result of the drop in oil prices at the end of the quarter. The company recorded a cash gain of $17 million on contracts that settled during the quarter bringing its consolidated cash fuel expense to $2.5 billion, $946 million higher than the prior year.
-- Reported a 6.1 percent increase year-over-year in mainline passenger unit revenue (PRASM), excluding special items and Mileage Plus accounting impacts. Including these items, mainline PRASM increased 4.5 percent year-over-year.
-- Demonstrated good cost control while reducing capacity, with mainline cost per available seat mile (CASM), excluding fuel and certain accounting charges, flat versus the same period in 2007, despite 4.0 percent lower capacity. Mainline CASM including fuel and certain accounting charges for the quarter was up 30.8 percent versus the third quarter of 2007, reflecting a 96.4 percent increase in mainline fuel price per gallon including non-cash, net mark-to- market hedge losses.
-- Raised $1.4 billion in cash through various activities including aircraft financings, asset sales and amending its credit card agreements.
Oct 21, 2008, 9:13 am
#25
Original Poster
Join Date: Apr 2005
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Looks like UA is making first steps towards selling M+ by assigning new FFP boss with task of " ... developing Mileage Plus into a standalone business ... ".
Also, customer experience and marketing will come under one umbrella with responsibility " ... for brand strategy, customer communications, merchandising, united.com, and the overall design of the customer experience ... ".
Full story: http://www.marketwatch.com/news/stor...E%7D&dist=hppr
Also, customer experience and marketing will come under one umbrella with responsibility " ... for brand strategy, customer communications, merchandising, united.com, and the overall design of the customer experience ... ".
Full story: http://www.marketwatch.com/news/stor...E%7D&dist=hppr
Oct 21, 2008, 9:14 am
#26
FlyerTalk Evangelist
Join Date: Sep 2003
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$1.99 per share loss handily beat analyst estimates of $2.48 per share loss, hence the upshot in share prices.
Oct 21, 2008, 10:23 am
#27
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Call is now over, if anyone wants to listen, its usually out there for a few weeks. Here are some things I found notable:
- $120 million in non cash revenue from implimintation of new mileage expiration (18 months).
- IAD-PEK will no longer be daily (this might have been announced already, but I missed it).
- They anticipate 15-744's and 14 763's reconfigured by the end of the year.
- A reporter asked if AA's 787 commitment increased pressure to buy new aircraft....Jake Brace advised that AA needed to replace thier 762's and they advised that they would place an order when capacity is needed, and something about shareholder value.. blah blah
Oct 21, 2008, 11:35 am
#28
Join Date: Aug 2007
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Oct 21, 2008, 11:59 am
#29
Join Date: Oct 2003
Location: Los Angeles, CA USA
Programs: UA 2P, PassPlus Flex, LAX Customer of the Year for 2006, UAL Shareholder
Posts: 328
Here are points I found bothersome:
1. At $80 per barrel, Ms. Mikells pointed out their estimate of cash outlays to cover open hedge contracts at $600 million.
2. The $1 billion financing from Chase is being secured by a second lien position against the Mileage Plus database.
They would not answer questions posed as to the profitability of the Mileage Plus unit. They did footnote in the report that excluding Mileage Plus and other accounting, mainline PRASM increased 4.5% year over year, in line with the 4% capacity reduction. There is no doubt the Mileage Plus unit is profitable, yet by leveraging it as they have for the sake of liquidity, how much of the value will not be realized when it is spun-off.
Projected traffic is expected to be off 10% to 12% (consolidated, the expected decrease in domestic traffic exceeding that of international) in the fourth quarter of 2008 over the fourth quarter of 2007, yet Mr. Tague would not answer the question posed as to what October traffic is to date. I would suspect that if October traffic were exceeding projections he would have answered that question. (Why do I get the feeling Mr. Tague is a big mistake?)
Mr. Tague did point out that the revenue unbundling has been met with "moderate" resistance and they have experienced a decrease in traffic because of it. He went on to say that it has been key in improving United's revenue performance and will remain in place. Their feeling is that the loss in market share will be made up in PRASM. Yet the 3rd quarter showed mainline PRASM only increasing slightly over capacity reductions. This number should have been higher.
To their credit they have taken steps to improve shareholder value in the short-term, but I remain very concerned about the erosion of the brand and its effects in the long term.
1. At $80 per barrel, Ms. Mikells pointed out their estimate of cash outlays to cover open hedge contracts at $600 million.
2. The $1 billion financing from Chase is being secured by a second lien position against the Mileage Plus database.
They would not answer questions posed as to the profitability of the Mileage Plus unit. They did footnote in the report that excluding Mileage Plus and other accounting, mainline PRASM increased 4.5% year over year, in line with the 4% capacity reduction. There is no doubt the Mileage Plus unit is profitable, yet by leveraging it as they have for the sake of liquidity, how much of the value will not be realized when it is spun-off.
Projected traffic is expected to be off 10% to 12% (consolidated, the expected decrease in domestic traffic exceeding that of international) in the fourth quarter of 2008 over the fourth quarter of 2007, yet Mr. Tague would not answer the question posed as to what October traffic is to date. I would suspect that if October traffic were exceeding projections he would have answered that question. (Why do I get the feeling Mr. Tague is a big mistake?)
Mr. Tague did point out that the revenue unbundling has been met with "moderate" resistance and they have experienced a decrease in traffic because of it. He went on to say that it has been key in improving United's revenue performance and will remain in place. Their feeling is that the loss in market share will be made up in PRASM. Yet the 3rd quarter showed mainline PRASM only increasing slightly over capacity reductions. This number should have been higher.
To their credit they have taken steps to improve shareholder value in the short-term, but I remain very concerned about the erosion of the brand and its effects in the long term.
Oct 21, 2008, 12:23 pm
#30
Join Date: Jul 2005
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If M+ does indeed get spun off, might it mean the end of Starnet blocking? I'm afraid it will mean more, but one can always hope.