US Air financial struggles

[Saabslime]

NEW YORK - High hopes, diminishing returns?

US Airways Group (nyse: LCC - news - people ) warned that its merger with America West will confront "significant challenges"--and that the hybrid firm may fall short of expectations.

Sure, every business venture involves risk, but this particular carrier combination has a lot riding on it: The merger was a key component in Chief Executive Douglas Parker's plans to pull US Airways out of bankruptcy.

In a regulatory filing Tuesday, Parker's firm said that while the airlines' synthesis will still create synergies and growth opportunities, US Airways' operating losses have not subsided and will likely grind on into 2006.

The carrier had augured some $600 million in operating cost savings and revenue synergies for the new entity. However, in a U.S. Securities and Exchange Commission filing, US Airways now says it "cannot assure" the synergies will be realized.

"We may not perform as well financially as we expect following the merger," Parker's company cautioned.



Well duh Parker. How many people tried to tell you and your crack management team this prior to signing on the dotted line!? I guess it doesn't matter anymore though since you got yours. Will there ever be anymore good news in this godforsaken industry again?

 

[Dennis Miller]

Will there ever be anymore good news in this godforsaken industry again?

Sure, how about this...............

UAL Reports $698 Million Net Loss for Oct.
Wednesday November 23, 2005 pm ET

UAL Reports $698 Million Net Loss for Oct. As It Nears Completion of Overhaul in Bankruptcy

ELK GROVE VILLAGE, Ill. (AP) -- United Airlines' holding company reported a $698 million net loss Wednesday for the month of October, continuing to lose money as it nears the completion of a nearly three-year-old overhaul in bankruptcy.

UAL Corp. said the loss consisted mostly of $584 million in reorganization expenses that resulted largely from the termination of its pilots' defined-benefit pension plan. It blamed the rest of the deficit on a 53 percent rise in fuel prices from October 2004 that caused the company to spend $169 million more on fuel than it did a year earlier.

The operating loss for the month was $71 million, compared with $65 million in the same period of 2004.

UAL said costs for its mainline unit, excluding fuel, were down 4 percent while passenger revenue rose 9 percent.

The company has now reported net losses of $14.9 billion since last turning a profit in the second quarter of 2000, including $5 billion this year and $9.7 billion since it filed for Chapter 11 bankruptcy in December 2002. But it suggested that the huge recent losses are somewhat misleading, since large non-cash reorganization expenses are common for companies closing in on emergence from bankruptcy. UAL noted that claims pending against it are expected to be settled for a fraction of the charges recorded, meaning much of the recent deficit will ultimately be overturned in the form of a multibillion-dollar gain upon exit from bankruptcy.

Chief Financial Officer Jake Brace said the company continues to make steady progress toward its goal of coming out of bankruptcy in February. "United's revenue performance and cost reductions were offset by record-high fuel costs," he said. "Our restructuring work has been effective and has equipped the company to manage through the challenges the industry presents."

The company said it ended October with $2.7 billion in cash -- $964 million of it restricted

 

[m80drvr]

Wonder when the consessions and furloughs begin. Great, on the street again, guess third time is the charm

 

[N1atEcon]

Please

When Parker and his gang were talking last spring about the "synergies" that would be gained I had a good laugh. I think that word is going to bite them in the A$$. If an airline CEO bases a business plan on a theory for the profits they should be tossed out at FL 410 without their golden parachute.

Doesn't synergy or synegism have to do with biology and organisms acting together?

 

[737 Pylt]

When Parker and his gang were talking last spring about the "synergies" that would be gained I had a good laugh. I think that word is going to bite them in the A$$. If an airline CEO bases a business plan on a theory for the profits they should be tossed out at FL 410 without their golden parachute.

Doesn't synergy or synegism have to do with biology and organisms acting together?

Organism is too good a word to describe airline management!
737

 

[PHXFLYR]

"We may not perform as well financially as we expect following the merger," Parker's company cautioned.


So this must be that "windfall for the AWA pilots" my good buddy Be Careful was trying to explain to me.... Now I get it!!


PHXFLYR

 

[capt. megadeth]

Great! Now the AWA pilots can give concessions while incompetent management continues to get raises, bonuses and golden parachutes.

 

[PHXFLYR]

Great! Now the AWA pilots can give concessions while incompetent management continues to get raises, bonuses and golden parachutes.

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

 

[capt. megadeth]

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

Oh, I am sure the slimeballs can squeeze a little more with their never ending "we need x million or we will liquidate" blackmail

 

[BeCareful!]

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

So tell us, PHX, where is your superior career judgement going to take you next? Or are you just going to sit there at US Airways and bitc#?