United Q1 $542M loss

[Andy]

Cash on hand decreased significantly. Not a good report.

http://biz.yahoo.com/prnews/080422/aqtu012.html?.v=48

CHICAGO, April 22, 2008 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA - News), the holding company whose primary subsidiary is United Airlines, reported a pre-tax loss of $542 million for the first quarter ended March 31, 2008, $305 million higher than the first quarter of 2007, driven primarily by a $618 million increase in consolidated fuel expense. For the quarter, the company:

-- Reported basic and diluted loss per share (EPS) of $(4.45).
-- Increased mainline passenger unit revenue (or PRASM) by 8.7 percent year-over-year through continued capacity discipline and strong yield management.
-- Continued its focus on controlling costs, with mainline cost per available seat mile (CASM), excluding fuel and special items, for the quarter up 2.4 percent versus 2007. Mainline CASM for the quarter was up 15.9 percent versus the first quarter of 2007, reflecting a 50 percent increase in fuel price.
-- Strengthened its balance sheet by reducing on and off balance sheet debt by $195 million. The company ended the quarter with an unrestricted cash and short-term investments balance of $2.9 billion and restricted cash of $0.7 billion.
-- Announced a plan to reduce 2008 non-fuel costs by an incremental $200 million and to reduce 2008 capital expenditures by $200 million.
-- Acted decisively to reduce mainline domestic capacity by approximately 9 percent by the fourth quarter, on top of a 5 percent reduction in the fourth quarter of 2007.
-- Announced plans to eliminate 30 aircraft from its operating fleet, 10 to 15 more aircraft than initially announced in March.

 

[Rez O. Lewshun]

How much did they pay themselves recently?

 

[Eagle757shark]

This is scary. At the beginning of 2008, everyone was excited about all the hiring and recalls going on around the industry. Now, every airline is suffering huge losses in the first quarter and fuel is steadily rising. I pray this will not be an active Hurricane season. This industry will be reshaped by the end of 2008.

 

[Andy]

How much did they pay themselves recently?

$250M special stock dividend
$110M in profit sharing (went to all employees)

Cash on hand decreased by ~$650M.

 

[pilotgolfer]

As we adjust both our fleet and capacity, we must size the rest of our business accordingly. This will include difficult but necessary steps to reduce our workforce by some 1,100 employees, including 500 management employees, and these will come through a combination of attrition, retirements and furloughs.
In this extraordinarily difficult environment, we recognize the pace of change needs to accelerate, and our actions today reflect just that

Let the furlough games begin!

 

[andyd]

wow, those are some scary numbers....at that rate of cash burn they have a little over 5 months of cash left. none of us are immune from this....it's going to be a long year

 

[Andy]

Let the furlough games begin!

Schweet. I should be done with 757 OE training by the end of June. ~600 from the bottom. What are the odds that I get yanked out of class?

Want liberal leave of absence from UAL? No problem. Take as long as you like.
I'd break into a Tom Bodell/Motel 6 rendition of leaving the light on for you, but I think that they'll be selling the light bulb.

 

[Andy]

wow, those are some scary numbers....at that rate of cash burn they have a little over 5 months of cash left. none of us are immune from this....it's going to be a long year

You can cut the cash burn in half by removing the special dividend and profit sharing. Something tells me that there won't be any profits to share next year. Still, $300M/quarter is >$3M/day. If that keeps up, UAUA will be back in BK in less than a year.

 

[AA717driver]

Andy--I'd say a lot of this was smoke and mirrors if I thought your management gave a $h!t. Good luck. TC

 

[Andy]

Andy--I'd say a lot of this was smoke and mirrors if I thought your management gave a $h!t. Good luck. TC

I'd say the same if cash on hand remained stable. That was a hefty decrease in cash. I did a cursory glance and it looked more like a fire than smoke and mirrors.
CASM ex-fuel and special items was only up by 2.4%; reasonable.
PRASM was up 8.7%.
Fuel costs were up 51.3%.

Oil prices have skyrocketed in April so even with the fare increases, it looks like UAUA will take a heavy hit in the current quarter.

Hard to believe that an ex-oil man could do so poorly on fuel hedges. That's pretty forked up.