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UAUA Q3 results/news/Mileage Plus/conference call discussion

UAUA Q3 results/news/Mileage Plus/conference call discussion

 
Old Oct 24, 08, 6:01 pm
  #61  
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Originally Posted by DogHead View Post
UA could have posted much lower losses if over $0.5M wasn't thrown at lobbying activities.
They're wise to do it. It actually shows some long-term thinking, which is greatly lacking over much of the world.

And 0.5M would not have resulted in "much" lower losses - maybe "slightly" lower, but investment in the future is important for anyone planning to survive, so was probably well worth it.
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Old Oct 24, 08, 6:06 pm
  #62  
 
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Originally Posted by DogHead View Post
UA could have posted much lower losses if over $0.5M wasn't thrown at lobbying activities.
"United Airlines spent $550,000 lobbying during the third quarter on energy issues, passenger rights legislation and more, according to a disclosure form filed this week."
Full story: http://www.forbes.com/feeds/ap/2008/...ap5601765.html
For a company of UAs size 550K on lobbyists is nothing, this is like saying someone could save their house by not buying a Starbucks once a week. You think lobbying about energy costs, when clearly fuel (energy) is their greatest cost is a waste? Interesting.
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Old Oct 24, 08, 7:08 pm
  #63  
 
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Originally Posted by ryan182 View Post
... You think lobbying about energy costs, when clearly fuel (energy) is their greatest cost is a waste? Interesting ...
I never said it's a waste, but large portion of Q3 loss.
OTOH I think that time has come for airlines to pay taxes on fuel, like everybody else.
Most interesting from our (pax) point of view should be passenger bill of rights. Of course UA as a customer oriented organization is lobbying in favour.
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Old Oct 24, 08, 7:13 pm
  #64  
 
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Originally Posted by DogHead View Post
I never said it's a waste, but large portion of Q3 loss.
Given that the Q3 loss is $779 million, of which over $500M is attributable to failed fuel hedges, how is $0.5M a "large portion of Q3 loss?" It's less than a tenth of a percent.
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Old Oct 25, 08, 12:52 pm
  #65  
 
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Originally Posted by DogHead View Post
I never said it's a waste, but large portion of Q3 loss.
OTOH I think that time has come for airlines to pay taxes on fuel, like everybody else.
Most interesting from our (pax) point of view should be passenger bill of rights. Of course UA as a customer oriented organization is lobbying in favour.
DogHead, I see that you're located in the UK, so it's understandable that you believe that airlines don't pay taxes on fuel, as they do not in Europe (though there have been efforts to change that.)

You may note that UA does have to pay taxes on fuel, as jet fuel is taxed in the US. The tax is much higher for general aviation fuel than for jet fuel, though, as commercial airlines only pay 4.4 cents / gallon compared to the 21.9 cents/gallon on general aviation. There was/is a bill in the Senate to remove the tax on commercial aviation, possibly due to concerns about competing with the untaxed European airlines.

I do not believe that the tax is paid on fuel used for international flights, though, but I could be wrong.
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Old Nov 25, 08, 1:26 pm
  #66  
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Today, more bad news for UAL due to falling oil prices:

UAL collateral on fuel hedges rises to almost $1B

Tuesday November 25, 1:18 pm ET
By Joshua Freed, AP Airlines Writer

United Airlines collateral on fuel hedges rises to almost $1B; credit card agreement reworked

MINNEAPOLIS (AP) -- Falling oil prices have forced United Airlines to put up hundreds of million of dollars in new collateral on fuel hedges that have turned against it, and on Tuesday it said it had re-worked a credit card agreement to reduce penalties if its cash balance falls.

Based on Tuesday's oil price of around $51 per barrel, United would have to put up some $990 million in collateral, according to a formula for its fuel hedges that it disclosed on Tuesday. By comparison, as of Sept. 30, it had $378 million in cash deposits held by people on the other side of its bet that fuel prices would keep rising.
http://biz.yahoo.com/ap/081125/united_hedging.html?.v=1

When falling oil prices threaten the liquidity of a company, the world has surely turned upside down.
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Old Nov 25, 08, 1:40 pm
  #67  
 
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Originally Posted by FWAAA View Post
Today, more bad news for UAL due to falling oil prices:



http://biz.yahoo.com/ap/081125/united_hedging.html?.v=1

When falling oil prices threaten the liquidity of a company, the world has surely turned upside down.
They only in passing mention the put contracts for downside protection and somehow will all the other detail they include in the article miss the following details :
They have puts covering 92% of Nov and Dec exposure at $60 barrel and 57% of 2009 exposure at $54 barrel. So its not all bad nor is it really "more bad news" just about everyone knew that all airlines are taking a bath on fuel hedging right now already, the question now is what to do about it. Buying puts to protect against further falling oil prices is about the only thing one can do.
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