STT757 From United States, joined Mar 2000, 9970 posts, RR: 41 Reply 6, posted (4 years 8 months 3 weeks 4 days 17 hours ago) and read 759 times:
From Last Weeks Wall Street Journal..
"""US Airways Considering
Asset Sales to Aid Recovery
By SUSAN CAREY and SCOTT MCCARTNEY
Staff Reporters of THE WALL STREET JOURNAL
Nine months after it stepped out of bankruptcy-court protection, still-troubled US Airways Group Inc. hired Morgan Stanley to develop alternatives, including the sale of some assets, to get the company back into the black and help it compete with low-cost rivals, said David Bronner, nonexecutive chairman of the airline.
Mr. Bronner, chief executive officer of a pension fund that is US Airways' largest investor, said Morgan Stanley was engaged recently to prepare scenarios for the airline's board when it meets next month. Directors are worried about financial covenants that will kick in this spring and summer on a $1 billion loan backed in large part by the federal government, he said.
"I want to be able to be in a position to repay [the government] and look after all the stockholders," said Mr. Bronner, who runs Retirement Systems of Alabama. "If you're close to where you want to be [financially] and you have one or two little assets you can sell, you look at all the alternatives."
The nation's seventh-largest airline, swamped by low-cost competitors on its East Coast turf, is evaluating whether to sell a variety of holdings, including gates, routes, planes, aircraft delivery positions, some regional jet operations, its Boston-New York-Washington shuttle service, and possibly assets at one or more of its three hubs, located in Philadelphia, Pittsburgh and Charlotte, N.C., said people familiar with the matter.
Morgan Stanley declined to comment. The possibility of asset sales was reported Thursday by the New York Times.
"We have more than enough slots and gates to run the company and still sell some," said Mr. Bronner, who added that US Airways may not sell anything and has no target figure for sale proceeds. "The objective is to build value for shareholders and to grow. We've made such huge strides, I'd hate to see the thing cave."
A number of big airlines have been approached by the investment bank in recent days, said people with knowledge of the matter. The Morgan Stanley pitch is divided into three sections, said one airline executive who has seen it. The first part essentially is the US Airways Shuttle, which flies hourly or every other hour between Washington, New York and Boston, related slots at New York's La Guardia Airport and gates in New York and Boston, this person said. The second part covers US Airways' regional operations, some of which already own or have orders for regional jets. The third piece of the pitch is assets at US Airways hubs, in Philadelphia, Pittsburgh and Charlotte.
Putting assets up for sale could put US Airways into play. But in the current harsh environment, where big airlines are suffering from the industry's worst downturn, other network carriers probably don't have the money or the fortitude to buy US Airways in its entirety. The individual assets might not be that attractive either. "Even if they gave them away," said another executive whose airline has been contacted by Morgan Stanley, "these assets aren't making any money today, except a little piece here, a little piece there." And for assets that have value, the price could come down if US Airways continues to have financial difficulties and is forced back into Chapter 11.
However, Continental Airlines has long coveted more real estate at La Guardia, to complement its hub at Newark, N.J. The lease on US Airways' terminal there is backed by Continental, which acquired it through the purchase of Eastern Airlines. Continental now has the right to occupy the terminal if US Airways defaults. A spokesman for Continental declined to comment.
AMR Corp.'s American Airlines, in turn, has coveted US Airways Shuttle. In 1997, American agreed to buy it from a consortium of banks for $300 million. But US Airways scotched the deal by exercising its right to buy the 53% of Shuttle that it didn't own. American walked away with a $10 million breakup fee. US Airways Shuttle competes against a larger shuttle run by Delta Air Lines, and with Amtrak train service. A spokesman for American declined to comment, except to say, "As part of our turnaround plan, we are very focused on strengthening our route network."
To sell anything, US Airways would need the agreement of the Air Transportation Stabilization Board, the federal panel that provided $900 million in loan guarantees to back the carrier's $1 billion bankruptcy-exit financing. The board has a lien on many of US Airways' assets and could call the loan in the event of certain asset sales. Even if the government approved, US Airways "would have to work with the ATSB to pay them back early" with whatever proceeds the airline garnered, said Mr. Bronner, the carrier's chairman"
"makes much more sense to live in the present tense"
STT757 From United States, joined Mar 2000, 9970 posts, RR: 41 Reply 7, posted (4 years 8 months 3 weeks 4 days 17 hours ago) and read 759 times:
In the late 1980s Eastern started planning for a "new" terminal at LGA to be built adjacent to their Shuttle Terminal, Eastern was then aquired by the Texas Air Corporation who took over the project.
The Texas Air Corporation was at the time the largest Airline corporation in the World, airlines under Texas Air control were Eastern, Continental, NY Air, PeoplExpress/Frontier, Britt Airways, Presidential Airways.
The Texas Air Corporation were the ones who actually began construction of the Terminal around 1989-1990, they planned to move both CO and Eastern into the Terminal.
Eastern's Unions went on Strike in 1989 and to keep Eastern afloat they sold the Eastern Shuttle to Donald Trump, they also sold the Eastern Shuttle Terminal to him but retained Eastern's Non shuttle operations and the Construction on the Terminal Continued.
In 1991 Eastern finally folded, as did the Texas Air Corporation. CO became split from them and became a separate entity, in the bankruptcy Liquadation sale of Eastern's Assets CO purchased Eastern's LGA slots and they took over the "new" Terminal project which was still not complete.
CO operated a large hub from LGA for about two years , all the while construction of the "new" LGA terminal continued.
Around late 1992 CO was experiencing their own financial crisis and sold the LGA slots to US Airways, they also decided to "lease" (not sell) the yet to be completed "new" LGA terminal to US Airways.
A few month's after US Airways bought CO's LGA's slots the "new" terminal was completed and US Airways moved in, CO remained at Eastern's old Main Terminal Gates to this day.
The US Airways lease at LGA with CO is a long term lease (30-40 years?..), it was done because US Airways did not have the money to out right buy it from CO and CO was smart enough to go with the lease because eventually CO can get it back should US Airways default on a payment.
Bankruptcy protection prevented CO from kicking US Airways out of the terminal during US Airways recent CH-11 filling, if CO can take the terminal back from US Airways they still would need "slots" to fill the place.
"makes much more sense to live in the present tense"
Captaink From Mexico, joined May 2001, 3730 posts, RR: 9 Reply 8, posted (4 years 8 months 3 weeks 4 days 17 hours ago) and read 732 times:
I love airliners.net. Isn't there anything I can't find out? Thanks a mil STT757 for that excellent explanation of some history I was totally unaware of.
One additional question, if CO operated a sizable hub out of LGA, what was the situation with EWR at that time?
STT757 From United States, joined Mar 2000, 9970 posts, RR: 41 Reply 9, posted (4 years 8 months 3 weeks 4 days 16 hours ago) and read 718 times:
"what was the situation with EWR at that time?"
Domestically just about the same size as they are today at EWR (250+ flights), though back in the early '90s their International route network was not as "robust" as it is today.
Back in '92 CO operated from EWR to Frankfurt, London Gatwick, Paris Orly, Madrid, Munich with DC-10s and 747s.
Plus plenty of flights to the Carribean (STT, SXM, Antigua, Aruba, Kingston, Montego Bay, Santo Domingo, Puerto Plata, ST.Croix) as well as Cancun and Mexico City.
"makes much more sense to live in the present tense"
727LOVER From United States, joined Oct 2001, 4357 posts, RR: 15 Reply 11, posted (4 years 8 months 3 weeks 3 days 18 hours ago) and read 516 times:
CO operated a large hub from LGA for about two years
I totally disagree w/ that statement.
What routes did they fly out of LGA? I don't remember a large hub at LGA. For one thing, to operate a large hub at LGA, they would need to buy slots, and the DOT would balk since they have a large hub at nearby EWR.
STT757 From United States, joined Mar 2000, 9970 posts, RR: 41 Reply 12, posted (4 years 8 months 3 weeks 3 days 6 hours ago) and read 448 times:
"What routes did they fly out of LGA? I don't remember a large hub at LGA. For one thing, to operate a large hub at LGA, they would need to buy slots, and the DOT would balk since they have a large hub at nearby EWR."
You didn't read what I wrote, CO purchased Eastern's (Non)shuttle slots for LGA at Eastern's bankruptcy liquadation.
Flights CO operated nonstop from LGA between early '91-late '92..
Atlanta 4 daily-Buffalo 4 daily- Detroit 4 daily- Ft.Lauderdale 4 daily-Fort Myerse 1 daily-Miami 4 daily- New Orleans 2 daily- Orlando 4 daily- Tampa 3 daily- West Palm Beach 3 daily- Denver 3-4 daily- Houston 7-9 daily- Cleveland 7 daily.
There might have been a couple more which I can't recall, but that's some of their flights.
All 727s, 737-300s, M80s.
"makes much more sense to live in the present tense"
Jfklganyc From United States, joined Jan 2004, 1030 posts, RR: 3 Reply 13, posted (4 years 8 months 3 weeks 3 days 6 hours ago) and read 411 times:
Thank You for the clarification. I knew I flew CO out of LGA to CO / KMCO), USA - Florida">MCO when I was a kid. They did have a much larger presence, I just though they scaled it back when they tried to convince NYers that EWR was New York-- a point still lost on me.
As for the terminal, lets talk about its current use. US Airways really doesn't need it the way it used to. They still have a large presence at the airport, but its mainly with RJs. LGA is small, its slots and gates are very, very valuable. To waste a whole concourse (built for mainline jets) on RJs and Dash 8s is ridiculous and I'd imagine that if US is selling off assets and slots at the airport, other airlines would be more than happy to park a 757 or two alongside that terminal.
I must also say that it is a beautiful terminal--much nicer than anything else at LGA, and truly represented US when they were the largest carrier at the airport. But its storied past in the past decade surely means that it will probably have an interesting turn of events in the near future.
STT757 From United States, joined Mar 2000, 9970 posts, RR: 41 Reply 14, posted (4 years 8 months 3 weeks 3 days 4 hours ago) and read 347 times:
You know what's shocking..
Besides the Shuttle flights and flights to their hubs at PIT, Charlotte, PHL etc US Airways only has one non regional jet/prop flight from LGA. A A320 flight to San Juan on the weekends!
The whole US Airways operation at LGA (minus the Shuttle and PIT, Charlotte flights) is nothing but DH-8 props and "some" ERJ-145s.
"makes much more sense to live in the present tense"
A330323X From United States, joined Oct 2003, 3039 posts, RR: 44 Reply 15, posted (4 years 8 months 3 weeks 3 days 3 hours ago) and read 283 times:
You know what's shocking..
Besides the Shuttle flights and flights to their hubs at PIT, Charlotte, PHL etc US Airways only has one non regional jet/prop flight from LGA. A A320 flight to San Juan on the weekends!
That's incorrect. US has a daily nonstop mainline flight to MSY, and I believe an 8x-weekly (daily + Sat) flight to NAS. In addition to the Saturday SJU, there's also a Saturday FPO, and a seasonal BDA.
I'm the expert on here on two things, neither of which I care about much anymore.
Ezra From United States, joined Mar 2000, 438 posts, RR: 2 Reply 16, posted (4 years 8 months 3 weeks 3 days 3 hours ago) and read 259 times:
To return to Lga1011's question, what about DL acquiring the lease to the US terminal at LGA? They are bursting at the seams in their current quarters, and their shuttle flights leave from the opposite side of the airport. Moving to the US terminal would give them more space and allow them to consolidate all their operations in one terminal. Surely CO doesn't need all those gates for itself, and the US operation as it exists now could easily fit in the current DL terminal.
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