More New Metal Orders Placed
10-06-2023 | 06:11 AM
#61
On Reserve
Joined: Mar 2007
Posts: 57
Likes: 7
The aircraft in question were being delivered at the time that this financing went through, this wasn’t financing for a far off order.
10-06-2023 | 09:46 AM
#62
Gets Weekends Off
Joined: Nov 2020
Posts: 2,235
Likes: 81
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
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
This is the party goer at the wedding reception who says “BTW, you know all marriages end in either divorce or death, right?”
Kirby has a plan and it’s a time tested CEO method: Make huge bets based on the future, if it works out you look brilliant and become magnificently rewarded. If it stumbles the employees are left holding the bag as you get a golden parachute from the BOD to leave.
10-13-2023 | 08:56 AM
#63
Banned
Joined: Jan 2021
Posts: 1,164
Likes: 2
There will be no new debt. The last 70 aircraft deliveries over the last 18 months were paid for with cash. United is on track to generate $8B in cash this year after $7B last year and has $20B cash in the bank and reduced long term debt by $1.5 B last year. These planes will be paid for with revenue, not from borrowing according to Kirby.
Not only did we order 50 more 787s but we added 50 more options at the same prices, so we can still get 100 more than the 150 firm 787s on order. We currently have 65 787s so we should be over 200 by 2030. Also Kirby said every single international route is profitable and they have 100 more International routes they could fly profitably but we don’t have the planes or pilots yet. I don’t know why the other airlines aren’t doing this but they probably don’t have United’s strong financial position. AA has $2B more in debt service payments than United. They are in a hole United has escaped. Kirby also said the new deliveries will pay for themselves!
Additionally we are replacing 440 RJs with mainline planes and the only way to do that is buying new planes, which are part of the 350 MAX planes that have been coming since 2021.
Not only did we order 50 more 787s but we added 50 more options at the same prices, so we can still get 100 more than the 150 firm 787s on order. We currently have 65 787s so we should be over 200 by 2030. Also Kirby said every single international route is profitable and they have 100 more International routes they could fly profitably but we don’t have the planes or pilots yet. I don’t know why the other airlines aren’t doing this but they probably don’t have United’s strong financial position. AA has $2B more in debt service payments than United. They are in a hole United has escaped. Kirby also said the new deliveries will pay for themselves!
Additionally we are replacing 440 RJs with mainline planes and the only way to do that is buying new planes, which are part of the 350 MAX planes that have been coming since 2021.
Thread
Thread Starter
Forum
Replies
Last Post
