News and Notes From United's 10-K

(MoneyWatch)  The hit parade just keeps coming. Today I'm taking a slightly deeper look at United's annual report. Here are some interesting bits for you.

• At the end of 2008, the new first and business class products had been installed on only 25 aircraft. The "majority of the 66 remaining aircraft" will be completed in 2009 and 2010 with the project fully completed in 2011. That's a long ways away.
• United was operating 409 mainline aircraft at the end of 2008. That's down from 460 at the end of 2007. United Express has 280 aircraft operating now, a full 40 percent of the total fleet.
• Mileage Plus award redemption "represented 9.1% of United's total revenue passenger miles in 2008, 8.0% in 2007 and 8.1% in 2006." On the flip side, fewer people were redeeming for non-United awards. "Mileage Plus members redeemed miles for approximately 613,000 non-United awards in 2008 as compared to 928,000 in 2007."
• The open skies agreement between the US and EU "provides United with additional commercial opportunities since it triggered the effectiveness of United's anti-trust immunity with British carrier bmi, creating the potential for increased cooperation between the two carriers in the transatlantic market. The DOT had previously conditioned the carriers' immunity upon the entry into force of an open skies agreement with the U.K. and the U.S./EU agreement satisfies this condition." I don't think I realized that, but I guess I should have.
• All of United's workgroups have their contracts become amendable in January 2010. This includes ramp, mechanics, pilots, flight attendants, engineers, and dispatchers. That may be a very rough year for the airline.
• Until January 20, 2010, United was able to suspend its agreement with Paymentech and JPMorgan Chase that required additional cash holdback if United's cash balance dropped. This was accomplished by putting up airplanes as collateral. If that hadn't happened, United would have had to pay an additional $132 million into the reserves because its cash balance dipped below the allowable level. After January 20, the airline will once again be required to have higher reserves if the cash balance is below $2.5 billion. At the end of 2008, cash was at $2.039 billion. A similar agreement is in place with American Express.