Once Northwest and Delta tied the knot it was all over for United staying independent. Continental brought a huge fleet (and orders) of 737's, 787's, newer 777's and 757/767's to the party! I remember non-revving on a United 757 and was amazed at the ancient technology in the cabins, like the single video screen and pneumatic headsets. United had parked their 737's, the Airbus were getting long in the tooth and the 777's and 747's were on their last legs. Both parties brought pros and cons to the merger but I'm amazed that this debate still rages 10 years on. The merger was succesful and the Continental group never received any greater windfall than the United pilots.

 

Not to be a stick in the mud as I appreciate your optimism but virtually none of the numbers you state are accurate.

United has been paying for aircraft in "cash" as they are carrying a lot of short term cash and cash equivalents that were all taken out during covid, this is all borrowed money, its not some huge pile of cash that was accumulated via the operation. It's like taking a million dollar loan out against your house and buying a sports car with a check and then turning around and saying you bought it in "cash". Its all borrowed money that you're paying interest on.

United did not generate anywhere close to 7B in free cash flow last year and will not approach 8B this year. As of the latest 10Q for the 6 month period ending on June 30th United has generated 1.474B in free cash flow, Q3 will add around 1.5-1.8 Billion to this number and Q4 far less so on a yearly basis no where close to 8B.

More debt is being issued to pay for aircraft so "no more borrowing" is also completely false.

https://airlineweekly.skift.com/2023...iveries-surge/

"United Airlines reopened the capital markets for airline debt on Monday when it raised more than a billion dollars to finance 39 new Boeing aircraft in its fleet.

The Chicago-based carrier priced the $1.32 billion single-tranche secured notes, known as enhanced equipment trust certificates (EETC), that mature in 2037 with a 5.8 percent coupon. Proceeds will finance 22 737-8s and 17 737-9s that United took delivery of between August 2022 and May 2023. The deal was not upsized, nor was the collateral pool expanded, between launch and pricing."
Dated June 13th 2023


From each respective carriers latest 10Q stating total interest expense YTD
AA: 1,088 million DL: 430 million UA: 979 million

YTD AA has paid 109 million more in interest than United, no where close to 2B.

AA has also paid down more debt YTD than UA and within 12 months UA is likely to overtake AA as the most heavily indebted carrier.

Just wanted to come in here and correct the record with actual reported numbers. Some of the things being stated here are just blatantly wrong and misleading. Even the talk on the number of widebodies, if you look at the original press release on the first order of 787's they stated that:

"Approximately 100 planes of the new widebody order are expected to replace older Boeing 767 and Boeing 777 aircraft, with all 767 aircraft removed from the United fleet by 2030, resulting in an up to 25% decrease in carbon emissions per seat for the new planes compared to the older planes they are expected to replace."
https://www.united.com/en/us/newsroo...idebody-planes

This latest order for 50 787's is likely for growth in 5-8 years from now which is great. But this talk about UA having more widebodies than AA and DL combined currently also isn't true. It may be true if you add these 50 orders to our current fleet but that assumes AAs and DLs fleet stay static, and spoiler alert, they're not, they are also growing their widebody fleets.

Not trying to rain on anyone’s parade as I'm excited for all the forthcoming growth, but it's important to temper that with the realities of the situation. And apologies to the AA folks on here, some of these comments are outrageous.

https://ir.united.com/financial-perf...oggle=1&page=1
https://americanairlines.gcs-web.com/sec-filings
https://ir.delta.com/financials/default.aspx

 

They’re only paying 5.8% on these notes? That’s actually an amazing deal for the company, especially in a world where you can get Treasuries that pay almost 5.6%. Personally I’d want a hell of a lot more yield than that to be buying airline debt over US government debt given the history of each…

 

At the time the 10yr US Treasury was 3.7ish% for reference, but yeah not half bad considering the risks associated with such debt! The airline industry doesn’t exactly have a great track record for investors…

 

With that exclamation point it appears you are drinking the Kool-Aid.

 

I’m sure a few will be paid with fairy dust and unicorn farts.

 

I bet he’s the type who buys a new car at sticker price and thinks they’re getting a great deal!

 

$1.32bil/39 is @~$33.84 mil per 737 Max… that’s buy 1 get 3 free territory off list price.

 

The financing 99% of the time does not include the initial deposits for the order which are usually around 20%, I’m guessing each A/C is closer to the 40-44 mark. Thats what the 900ER was selling for at the end of its production run so is fairly realistic. Still a decent price but lists price mean almost nothing, virtually every airline pays 50% of list price. There’s a reason it’s the only number Boeing will publish (it’s not accurate at all).

 

Nobody puts 20% down to order an aircraft. The norm for a widebody is about 10,000. Serious money is only required when you get 2 years out for delivery.