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

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

 
Old Oct 20, 08, 3:00 pm
  #1  
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UAUA Q3 results/news/Mileage Plus/conference call discussion

I will be monitoring UA's Q3 conf call in this thread on Tuesday... or you can listen here: http://ir.united.com/phoenix.zhtml?p...ventID=1997812

Also, some preliminary results here: http://biz.yahoo.com/ap/081020/ual_e...view.html?.v=2

United Airlines parent UAL Corp. expected to post 3Q loss


MINNEAPOLIS (AP) -- UAL Corp., the parent of United Airlines, is expected to post a loss when it reports third-quarter results on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: The airline industry saw some big ups and downs during the third quarter, and United Airlines parent UAL Corp. was no exception. The July-through-September quarter brought the highest oil prices ever -- over $147 per barrel on July 11 -- but oil retreated significantly by the end of September. And after Labor Day, airlines began shrinking their schedules more dramatically than usual for the slower fall travel season.

United has been raising cash. It said it got $60 million from borrowing against its planes on Sept. 30, the last day of the quarter, and expected to receive another $65 million on the same transaction by the middle of this month. It also said it had agreements in place to sell $140 million worth of other assets, with the money coming in by the end of the year. The carrier still has more than $3 billion in assets that it could borrow against if necessary.

BY THE NUMBERS: Analysts, on average, expect a third-quarter loss of $2.48 per share on revenue of $5.54 billion, according to a survey by Thomson Reuters.
Finally an announcement today about some new duties/title for Graham Atkinson and Dennis Cary: http://biz.yahoo.com/prnews/081020/aqm091.html?.v=56

United Airlines Names Dennis Cary Chief Marketing and Customer Officer; Appoints Graham Atkinson President of Mileage Plus

CHICAGO, Oct. 20 /PRNewswire-FirstCall/ the holding company whose primary subsidiary is United Airlines, today named Dennis Cary senior vice president and chief marketing and customer officer, and Graham Atkinson president of Mileage Plus, the company's loyalty program.
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Old Oct 20, 08, 4:23 pm
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Might be the first time we've read why the $125MM was raised... in some part due to borrowing against planes.
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Old Oct 20, 08, 4:42 pm
  #3  
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Originally Posted by bmvaughn View Post
Might be the first time we've read why the $125MM was raised.
That says how, not why.
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Old Oct 20, 08, 4:44 pm
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Originally Posted by mahasamatman View Post
That says how, not why.
Okay okay.. you're being a stickler here... but the why was to raise cash
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Old Oct 20, 08, 4:50 pm
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Originally Posted by bmvaughn View Post
the why was to raise cash
The real question is why they want/need to raise (so much) cash.
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Old Oct 20, 08, 5:17 pm
  #6  
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Originally Posted by mahasamatman View Post
The real question is why they want/need to raise (so much) cash.
Maybe contingency planning due to continued volatility in oil prices.
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Old Oct 20, 08, 7:03 pm
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Changes at WHQ - first sign of M+ spin off?

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
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Old Oct 20, 08, 7:25 pm
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I am not sure if this is a good thing or a bad thing. I think it could be positive and it forces M+ to run itself as a true business. I know SPG is like that. Not sure if there are any examples of airline programs however, and I would imagine none quite as large. Though still, I'm not going to hold my breath until the changes occur.
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Old Oct 20, 08, 7:32 pm
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Is there any estimate as to how much fuel UA hedged at now very high prices?
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Old Oct 20, 08, 7:49 pm
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Originally Posted by adambadam View Post
Is there any estimate as to how much fuel UA hedged at now very high prices?
The following is based on oil in the high $90's per barrel.

http://biz.yahoo.com/ap/080917/airlines_fuel.html?.v=3

United Airlines said on Wednesday it is on track to lose $544 million on fuel hedges this quarter. That included $72 million in realized losses and another $472 million in unrealized losses. Those positions forced United to put $400 million into restricted cash for the parties on the other side of its oil price bets.
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Old Oct 20, 08, 7:55 pm
  #11  
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FWIW, it already reported here: http://www.flyertalk.com/forum/showthread.php?t=879105

And IMhO, not too many companies have the capital (or access to capital) to pull the trigger on the deal. Furthermore, UA already has almost 3B in assets that they could still exploit (although I am sure M+ is figured into that number). Finally, a sale in todays market would not be for top potential dollar.
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Old Oct 20, 08, 8:53 pm
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How would MP generate revenue as a stand alone company?

What would the business model be?
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Old Oct 20, 08, 8:56 pm
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Originally Posted by grayland View Post
How would MP generate revenue as a stand alone company?

What would the business model be?
They sell miles back to UA and partners (ie Chase) and then buy the awards from UA.
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Old Oct 20, 08, 9:21 pm
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I have little faith of the current executive team to execute this in a way that brings value to the brand or to the customer.
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Old Oct 20, 08, 9:25 pm
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Air Canada did this to Aeroplan years back and it seems to have worked out OK for them (and me).
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