Mwhahahahahahaahahahahahahaahaa nothing like two idiots getting together... ..but at this stage of the game, they are looking like the new problem children of the industry. Walter DCA ----- Original Message ----- From: "W Wilson" <wlw-jr@att.net> To: <AIRLINE@LISTSERV.CUNY.EDU> > > CHICAGO, July 25 (Reuters) - Shares of United Airlines parent UAL Corp. > (UAL) plunged on Thursday, continuing a sell-off started last week when UAL > said it may have difficulty refinancing loans due later this year if it > fails to obtain federal loan guarantees. > UAL shares fell as much as 25 percent and have lost more than half their > value in less than a week, as company talk about difficult access to capital > markets following the Sept. 11 attacks outweighed any boost it might have > gotten from a new marketing pact with US Airways (U), analysts said. > > UAL shares fell as low as $3.49 Thursday, by far the lowest level since the > adoption of an employee stock ownership plan in 1994 that gave workers a > major stake in the No. 2 U.S. air carrier behind American Airlines parent > AMR Corp. (AMR). UAL declined to comment on the stock movement. > > > > The shares were off 60 cents, or 12.75 percent, at $4.10 on Thursday > afternoon. They have lost more than 85 percent of their value since the > Sept. 11 attacks. > > "It is still the fallout from their conference call when they said that if > they don't get the government loan guarantees they have greater liquidity > issues than previously believed," Goldman Sachs airline analyst Glenn Engel > said. > > "And obviously the market is very risk averse now and anything that smacks > of risk is getting pummeled," Engel said. > > Last week, Elk Grove Village, Illinois-based UAL reported a $341 million > second-quarter net loss and said the third quarter likely would be similar > because a slow industry recovery had stalled. The company lost a record $2.1 > billion last year. > > UAL said it was concerned about its ability to refinance $900 million of > loans due near the end of the year without government approval of its loan > guarantees application. The company has accessed private capital this year, > but said the bulk of those opportunities had been tapped. > > PROBLEMS WITH LABOR GROUPS > > UAL has asked the government to back 90 percent of a $2 billion loan under > airline aid legislation passed following the Sept. 11 attacks. UAL needs to > demonstrate commitment to cost cutting to receive the guarantees, but has > not been able to get all of its labor groups to go along so far. > > "I can see where there are still questions about UAL, but it is still a less > rudderless company than it was a year ago," air industry analyst Michael > Boyd said. "UAL is in no danger of going out of business at this point." > > UAL's lack of a permanent chief executive and inability to negotiate cost > cuts with mechanics and flight attendants has fostered a perception that UAL > does not have a long-term plan to address its problems, Boyd said. > > Chief Executive Jack Creighton assumed control of UAL last October on a > temporary basis and has said he intends to step down when a successor is > found. > > Shares of Arlington, Virginia-based US Airways rose Thursday following the > marketing pact, which came about a year after a proposed merger of the > airlines fell apart over antitrust concerns. > > A US Airways loan guarantee application has conditional approval and the > marketing pact added to perception that the air carrier has a plan to turn > things around, Boyd said. > > Jim Higgins, a Credit Suisse First Boston analyst, said the marketing > alliance increases the chances the government will approve loan guarantees > for United and US Airways, though both applications still have significant > hurdles. > > While the revenue generated could be considerable, UAL and US Airways face > considerable financial challenges and losses continue to mount for both, > Merrill Lynch airline analyst Michael Linenberg said in a research note. > > > ©2002 Reuters Limited. >