UAL q2 numbers

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07-22-2020, 05:55 AM

#11

jdt30

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Quote:

Originally Posted by ERflyer

I would guess the $18B does include the CARES loan too. They tried to borrow more from the private sector and were getting 11% interest quotes.

UAL tried to float 25 year old airplanes for collateral.

07-22-2020, 06:26 AM

#12

AUP09

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I need to look at the final numbers, but UA, during Q2, was projected to be significantly smaller than DL. They have a similar revenue number because they have a different philosophy on seat caps, but that revenue was generated on significantly fewer flights operated by significantly fewer aircraft compared to DL.

Basically, their costs are lower because they gutted their network more than we did.

AA's results will be the most important to measure against. If they are burning more cash than us then we (and United) made the right move. If they are burning less cash than us then it may cause some to reexamine the strategy.

07-22-2020, 06:35 AM

#13

Phins2right

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Quote:

Originally Posted by AUP09

We're not haughty management types. However, several of us told you about 8 weeks ago shrinking to profitability was not a good course of action.

Why wait for AA numbers? You know what needs to be done.

07-22-2020, 06:49 AM

#14

AUP09

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Quote:

Originally Posted by Phins2right

Why wait? Because UA took a similar approach as us (albeit for seat caps) and ended up with similar cash burn. AA took a vastly different approach so we need to seed the results first.

If AA carried more pax, and had more revenue, but burned $50+ million a day we don't want to copy them.

If AA did those same things and ended up with $40 million in cash burn we don't necessarily want to copy them but may want to adapt pieces of their strategy.

If AA did those same things and ended up with $30 or less in cash burn per day we may want to change a lot of things about our strategy.

07-22-2020, 07:02 AM

#15

biigD

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Quote:

Originally Posted by AUP09

AA's results will be the most important to measure against. If they are burning more cash than us then we (and United) made the right move. If they are burning less cash than us then it may cause some to reexamine the strategy.

I don't have any doubt we're (AA) burning more cash than you or United, and tomorrow will show that. We went with a bullish strategy for the Fall and clearly the reclosing of large parts of the country has destroyed most or all of that optimism. We've already announced cancellations in August, so the company knows that throwing the ball down the field didn't work.

But as Phins said - what does it matter? I think we were all hoping to be in some sort of recovery mode by the end of the year, and it's pretty clear we'll still be fighting for survival.

07-22-2020, 07:09 AM

#16

Al Czervik

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Quote:

Originally Posted by AUP09

I think AA’s numbers may be skewed. We boosted our flights and it seemed to have paid off....until recently. The pax numbers are in decline that will no doubt bite us.

07-22-2020, 07:10 AM

#17

AUP09

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Quote:

Originally Posted by biigD

But as Phins said - what does it matter? I think we were all hoping to be in some sort of recovery mode by the end of the year, and it's pretty clear we'll still be fighting for survival.

It matters because he's a proponent of going big like AA. And if we do that while there are *literally* no signs of recovery we'll just be needlessly burning cash.

We are all hoping for some sort of recovery mode by the end of the year, but the fact is there is no data to support that right now and the close in data we do have is stagnating at best.

07-22-2020, 07:14 AM

#18

AUP09

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Quote:

Originally Posted by Al Czervik

I think AA’s numbers may be skewed. We boosted our flights and it seemed to have paid off....until recently. The pax numbers are in decline that will no doubt bite us.

That is probably indeed the case. If they are skewed I'm hoping AA management breaks out the numbers enough so we can see what cash burn was while things were good and what it is now that traffic waning.

07-22-2020, 07:25 AM

#19

thrust

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Quote:

Originally Posted by AUP09

Per AA’s 8K filed on July 2nd, AA’s cash burn went “from more than $100 million per day in April to less than $35 million per day at the end of June“.

Will be interesting to see what it is going forward. Reports are that close-in load factors (within a week or so) are 60%+ in DFW and CLT. Further out, 30%. Are people waiting to the last minute to book travel? AA is already planning on cutting back its August schedule.

07-22-2020, 07:26 AM

#20

biigD

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Quote:

Originally Posted by AUP09

I see what you're saying now. I'm not too optimistic about tomorrow's call - we had a month of increased flying, but who the heck knows what the yields were? I personally liked the decision - without being able to cut the payroll and with fuel being dirt cheap, why not roll the dice? But with the ability to shed payroll in October, I think you'll see AA take a defensive stance now that it's clear there won't be any meaningful recovery this year. It's already happening with the cuts to our flying next month.