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UAL Corporation Message Board

  • bocacassidy bocacassidy Apr 22, 2009 12:51 PM Flag

    UAL Liquidation ?

    Is UAL the most likely major airline to liquidate ?
    It is widely expected that one or two air carriers will be tanked to solve the chronic overcapacity and weak fare pricing problem.....as the fastest and most expedient restoration of financial viability to this sick industry.....There are clearly too many airlines chasing too few passengers .....and transporting them for too little money !

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    • "It is widely expected that one or two air carriers will be tanked to solve the chronic overcapacity and weak fare pricing problem.....as the fastest and most expedient restoration of financial viability to this sick industry....."

      Yea right. Like "they" will pick out a couple to "be tanked" and make the others whole. Truth is, nothing "will be tanked". Some will go bankrupt and be sold off but it will not be a collectively planned sacrifice.

    • While you are correct in that there are too many airlines chasing too few passengers, many of the airlines are reducing their aircraft and flight numbers to right size supply for demand.
      UAL have far too much cash on hand for them to go into Chapter 11 in the next few months, and I think a merger with CAL is more likely than Chapter 7.

      UAL's woes would give leverage to CAL being on top in the merger. (Besides, CAL have much better management and customer service than UAL, and Tilton and his cronies want to get out so that they can have their big payday).

      The market will come back eventually as long as oil stays low. I cant agree that oils "should be" $25 a barrell. Supply and demand dictate the price, and while OPEC controls supply, everyone is still paying $40 to $50.

      The management for UAL, have no new ideas, and follow the standard procedures.
      Labor gave up a lot to keep the airline afloat, in fact they gave up their ESOP. While they took their reductions, top management took stock options. (Neither did very well). That's why a merger is likely.

    • If oil prices go up or United starts to have labor problems as the negotiations get to their end point, they are toast.

      • 3 Replies to roma_shiraz
      • The observation of Shiraz is reasonable.....The decline in oilfield developement and OPEC production cuts point toward at least some fuel cost rise later this year , even with the recession.....and yes ,it is not certain that losses can be offset by labor cost concessions...Should UAL face another
        chapter 11 , financing for reorganization may prove to be impossible in this climate of credit contraction.
        Various competing airlines will be able to operate with cost levels well below the elastic limits which UAL can match
        On the positive side - USAIR may be more vulnerable.