Dollars and Jens
Friday, August 20, 2004
Soaring with the Penguins
Richard Branson was once asked how to become a millionaire. "Start out as a billionaire," he recommended, "and buy an airline."
Pollock, in his message to pilots, also rebuked some members of his own union group for dismissing the threat of liquidation.

"I know you've heard it before, but these negotiations are quite likely the most critical ones of our careers. This may very well be our last time at bat, our last opportunity to control the fate of our airline and our careers," Pollock said.
If US Airways is worth more alive than dead, it's because it would be worth so little dead. Sell off those airplanes to whom, exactly? America West, maybe; Southwest doesn't fly most of the airplanes in US Airways's fleet. And certainly not United Airlines, which is worth less alive than abandoned by the side of the road; it is generating a prodigious return on its negative value. I've been doing my "United delenda est" schtick for years now, and it seems Bill Mann is on board, though he misspeaks here:
United Airlines' management would dearly like to emerge from bankruptcy, and the process here is to work among all of the creditor classes to come up with a plan that will give the company financing and a capital structure that will allow it to operate.
No. United has negative operating earnings. United has consistently negative operating earnings. United has very consistently very negative operating earnings. This is not about capital structure, unless you mean to include "bolt United onto an enterprise that is generating even more cash than United can burn through" as a capital structure to consider. The assets should be auctioned off now. I'll bid $25 for the rights to that commercial with the parrot playing Rhapsody in Blue on the piano.

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