CAL had no financing for a/c order past 2010
#1
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CAL had no financing for a/c order past 2010
FYI:
2009 10K filed Feb 2010.
We have backstop financing available for the three otherBoeing 737 aircraft scheduled for delivery in 2010, subject to customary closing conditions. However, we do not have backstop financing or any other financing currently in place for the balance of the Boeing aircraft on order. Further financing will be needed to satisfy our capital commitments for our firm order aircraft and other related capital expenditures. We can provide no assurance that the backstop financing or any other financing not already in place for our aircraft deliveries will be available to us when needed on acceptable terms or at all. Since the commitments for firm order aircraft are non-cancelable, and assuming no breach of the agreement by Boeing, if we are unable to obtain financing and cannot otherwise satisfy our commitment to purchase these aircraft, the manufacturer could exercise its rights and remedies under applicable law, such as seeking to terminate the contract for a material breach, selling the aircraft to one or more other parties and suing us for damages to recover any resulting losses incurred by the manufacturer.
http://www.sec.gov/Archives/edgar/data/319687/000031968710000011/f123109form10k.htm#riskfactorsterroristattack
2010 10Q 1stQuarter earnings call
Operator
Our last question from the analyst comes from Bill Mastoris with Broadpoint, please go ahead.
Bill Mastoris - Broadpoint
Thank you. Gerry, I wonder if you could give us a status report on the aircraft deliveries into the EETCs. And maybe if you could just comment on how many remaining aircraft are yet to be placed into those transactions. And I'm specifically referring to really the second half of last year 2009-1 and 2009-2.
Gerry Laderman
Bill, you are breaking up a little bit, this is Jerry. But I think you are asking about the 2009-2 EETC and the aircraft to go into that. There are some vintage aircraft that roll off an existing EETC in May that we expect to go into that EETC as the prospective outlines. And then with respect to new aircraft, the two 777s and nine 737s that were earmarked to that transaction, we expected this time to take delivery of those aircraft by the end of August, in which case they would go into that EETC.
Bill Mastoris - Broadpoint
Okay, and Gerry, if you could comment briefly on the aircraft deliveries, for 2011. Maybe the financing for those, is that all non-back stop financing from other third parties which have been lined up or is that back stop financing?
Gerry Laderman
We have no back stop financing for those aircrafts.
Bill Mastoris - Broadpoint
For any deliveries, in 2011?
Gerry Laderman
For any remaining deliveries at all.
Continental Airlines Q1 2010 Earnings Call Transcript - Seeking Alpha
2009 10K filed Feb 2010.
We have backstop financing available for the three otherBoeing 737 aircraft scheduled for delivery in 2010, subject to customary closing conditions. However, we do not have backstop financing or any other financing currently in place for the balance of the Boeing aircraft on order. Further financing will be needed to satisfy our capital commitments for our firm order aircraft and other related capital expenditures. We can provide no assurance that the backstop financing or any other financing not already in place for our aircraft deliveries will be available to us when needed on acceptable terms or at all. Since the commitments for firm order aircraft are non-cancelable, and assuming no breach of the agreement by Boeing, if we are unable to obtain financing and cannot otherwise satisfy our commitment to purchase these aircraft, the manufacturer could exercise its rights and remedies under applicable law, such as seeking to terminate the contract for a material breach, selling the aircraft to one or more other parties and suing us for damages to recover any resulting losses incurred by the manufacturer.
http://www.sec.gov/Archives/edgar/data/319687/000031968710000011/f123109form10k.htm#riskfactorsterroristattack
2010 10Q 1stQuarter earnings call
Operator
Our last question from the analyst comes from Bill Mastoris with Broadpoint, please go ahead.
Bill Mastoris - Broadpoint
Thank you. Gerry, I wonder if you could give us a status report on the aircraft deliveries into the EETCs. And maybe if you could just comment on how many remaining aircraft are yet to be placed into those transactions. And I'm specifically referring to really the second half of last year 2009-1 and 2009-2.
Gerry Laderman
Bill, you are breaking up a little bit, this is Jerry. But I think you are asking about the 2009-2 EETC and the aircraft to go into that. There are some vintage aircraft that roll off an existing EETC in May that we expect to go into that EETC as the prospective outlines. And then with respect to new aircraft, the two 777s and nine 737s that were earmarked to that transaction, we expected this time to take delivery of those aircraft by the end of August, in which case they would go into that EETC.
Bill Mastoris - Broadpoint
Okay, and Gerry, if you could comment briefly on the aircraft deliveries, for 2011. Maybe the financing for those, is that all non-back stop financing from other third parties which have been lined up or is that back stop financing?
Gerry Laderman
We have no back stop financing for those aircrafts.
Bill Mastoris - Broadpoint
For any deliveries, in 2011?
Gerry Laderman
For any remaining deliveries at all.
Continental Airlines Q1 2010 Earnings Call Transcript - Seeking Alpha
#3
Ok, I'll play.
The last UAL 737-200 was retired in Oct 2001. If you meant the UAL full glass 737-300/500s (the ones with CATIII and upgraded FMSs for RNP) then I guess it was an easy mistake to make.
(In all seriousness I agree with you, it's only gonna matter to the arbitrator, but the claim has been made several times by several sCAL pilots on this forum that sCAL was somehow in better financial shape pre-merger with fully financed aircraft orders despite nearly every financial metric being similar between the two pre-merger companies.)
The last UAL 737-200 was retired in Oct 2001. If you meant the UAL full glass 737-300/500s (the ones with CATIII and upgraded FMSs for RNP) then I guess it was an easy mistake to make.
(In all seriousness I agree with you, it's only gonna matter to the arbitrator, but the claim has been made several times by several sCAL pilots on this forum that sCAL was somehow in better financial shape pre-merger with fully financed aircraft orders despite nearly every financial metric being similar between the two pre-merger companies.)
#4
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#6
Gets Weekends Off
Joined APC: Feb 2011
Posts: 215
If the CAL Merger Committee makes and argument to the Arbitrator that the LCAL pilots had higher career expectations because of the large number of A/C on order ... then the UAL Merger Committee will pull out this piece to neuter their argument. If the CAL Merger Committee doesn't make that argument, then you are right ... the Arbitrator probably won't care.
#7
Gets Weekends Off
Joined APC: Sep 2006
Posts: 621
There seems to be a misunderstanding as to what backstop financing is or why CAL (or any other airline) would not want it. Here's an article from 2009 that explains backstop financing as well as the market conditions at the time
Aviation Today :: Airlines Need Manufacturer’s Financial Help
Aviation Today :: Airlines Need Manufacturer’s Financial Help
#8
Gets Weekends Off
Joined APC: Jan 2012
Posts: 230
There seems to be a misunderstanding as to what backstop financing is or why CAL (or any other airline) would not want it. Here's an article from 2009 that explains backstop financing as well as the market conditions at the time
Aviation Today :: Airlines Need Manufacturer’s Financial Help
Aviation Today :: Airlines Need Manufacturer’s Financial Help
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