New week, new News (UAL gets 3 billion)

United Airlines announced today that it has launched its 3 billion dollar exit financing loan and expects to exit Chap 11 on Feb 1. Part of the loan will pay off DIP loans it secured while in Chap 11. The six-year loan will be secured by substantially all available assets at United.

As of this date UAL's 3 billion dollar exit loan is the largest loan any airline has received coming out of Chap 11 and gives UAL almost 5 billion in cash. If UAL's new business plan works they will become a force to contend with once again.

Its looks as though 2006 will be an interesting year for the airlines. This is the year that will prove if the airlines new business models will work or not. The one component of the plans that everything revolves around is the price of fuel. Any dramatic spike in the price of fuel is going to send everything tumbling. Just as an example Indy based its model on fuel prices of $50 a barrel, and we all know what oil spiked to over the summer.