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US Airways - 30 To 90 Days Puzzle  
User currently offlineMariner From New Zealand, joined Nov 2001, 25078 posts, RR: 85
Posted (10 years 6 months 3 weeks 4 days 11 hours ago) and read 3420 times:
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The CEO of US Airways says that the next 30 to 90 days are "critical" for the airline - but the Chairman of the board, Bronner, said the same thing six weeks ago.

http://biz.yahoo.com/djus/040130/1722000985_1.html

The CEO also says that he does foresee a trip to Chapter 11 within the "relevant timeline".

But if the airline's finances are so critical, why does he rule out a possible return to bankruptcy at the end of the 30 to 90 days?

cheers

mariner


aeternum nauta
16 replies: All unread, jump to last
 
User currently offlineFlyinggizmo From United States of America, joined Dec 2003, 98 posts, RR: 0
Reply 1, posted (10 years 6 months 3 weeks 4 days 11 hours ago) and read 3350 times:

Siegel and Bronner will not allow for a Chapter 11 filing. They will pull the plug, pay off all debts, and walk away with a small chunk of money while the airline will be dead. But who can blame them? ALPA has already run back to the table to negotiate(a positive sign) after their membership discovered that there is NO JOBS out there right now. A 55 year old captain who gets bounced from US will find himself pulling up the gear for some 23 year old "Like wow, I'm an pilot!" girl at the fun rate of $20,000 a year max. The AFA came back teary eyed last night, their obnoxious "FULL PAY TO THE LAST DAY" leader forced to do it because her membership discovered the same thing and told her that if they lose their livelihoods thanks to her posturing, "We know where you live" - so to speak. The IAM is sticking their chests out, but the fact is that IAM doesn't have a leg to stand on - Eastern is well remembered for what happened there, and AMFA is gaining up on them anyway. If IAM acts like a bunch of Soprano types, while all the others have knuckled under, THEN you will see a chapter 11 filing. Otherwise, it's close the shop down, sell the assets, and tell the unionistas to learn to say, "Do you want fries with that?"

Is it certain that US Airways will die? No. There has been some very positive movement in the last 24 hours that have made me rethink it. PIT is a dead duck no matter what happens, and the express carriers are going to learn to bow and serve the J.O. That's about $150 million right there, which will help out. The shuttle isn't going to be sold, unless a chapter 7 filing is imminent. It is too complex and too important to sell if you want to have a company worth saving. In addition, some other stuff is happening in the background, so all I can say is keep watching.


User currently offlinePVD757 From United States of America, joined Aug 2003, 3412 posts, RR: 17
Reply 2, posted (10 years 6 months 3 weeks 4 days 10 hours ago) and read 3289 times:

I disagree about the shuttle being so complex and important. There is no dedicated fleet for the route. It is completely integrated into the US system. The only thing that would bring in money would be the slots and the gates at the affected airports. If the sale of the shuttle will help delay the red for a period of time, then they will do it as long as a certain amount is made. This will not be a fire sale. That's what ch.7 is for. As far as the pilots, go I was informed by an employee somewhat up the ladder that the pilots on average fly significantly less a month compared to other airlines. This whole deal about maybe bringing 60 more planes into the fleet stems from the productivity gains that management wants. They want comparable hours flown per month or they will probably not be able to continue to survive.

User currently offlineMariner From New Zealand, joined Nov 2001, 25078 posts, RR: 85
Reply 3, posted (10 years 6 months 3 weeks 4 days 10 hours ago) and read 3223 times:
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I agree that the death of US Airways is not certain.

However, I'm still puzzled about the 60 x A320's - 30 this year, they say.

To begin with, there's usually about a 12 month lead time from placing the order to getting the first plane. And, as I understand it, the A320 production line is pretty much maxed out.

There are some scheduled for leasing companies, and there may be a few spare already with the leasing companies, so that could help.

But 30 this year?

cheers

mariner



aeternum nauta
User currently offlineN670UW From United States of America, joined Jul 2003, 1603 posts, RR: 8
Reply 4, posted (10 years 6 months 3 weeks 4 days 9 hours ago) and read 3171 times:

It's very hard to believe that these planes will additions to the fleet.

The company continues to send Airbuses (319's, 320's) to the desert as they run out of time (several are already sitting out there), and it appears some 737's have some work that need done soon. The new Airbuses seem like replacement aircraft.



670


User currently offlineOuboy79 From United States of America, joined Nov 2001, 4581 posts, RR: 23
Reply 5, posted (10 years 6 months 3 weeks 4 days 7 hours ago) and read 2991 times:

Gizmo hit it right on the nose. The major issues right now are ALPA work rules and the Airbus heavy mx issue. ALPA has caved to the union busters again and will likely give up the productivity improvements as requested. Will UAIR get everything they want? Nope. However they should give up enough to provide for the additional 60 aircraft without any increase in pilot numbers.

Really quick...as far as where they will come from. You'll probably see a lot of used aircraft come into the mix and Seigel has stated that "they will come from multiple sources." If the company wants the productivity improvements from ALPA, they will need to meet the requires of the minimum fleet numbers - which means the 60 new jets will be additional to the 279 contractual minimum. If this item is not met, I don't see ALPA moving much.

Now on to the airframes timing out and the IAM issues. As has been said...the IAM is a dying entity at UAIR. AMFA is moving in VERY quickly and will likely replace the IAM soon. They are trying anything right now to save themselves, even if it means acting like the strong powerful union of old. I too forsee IAM settle at the request of the membership by the approval of a Non-MEC backed contract...followed quickly by the voting in of the AMFA. Heavy mx will be done in house and hopefully we'll see UAIR pursue other opportunities such as doing mx for other airlines. Now the question is...will it be done in CLT or PHL or perhaps a new base in Right-To-Work Alabama.

Like I said in another thread about a month ago. Things will continue to move fast as UAIR undergos a restructuring outside the courts. A lot of this should have been done in Ch11...but the management team failed to have enough foresight to realize the LCCs will continue to grow at a quick rate. However, who would guess that the LCCs would start exploiting RJs to penetrate even smaller markets. JetBlues order of the 190s changed things more than we even realize now...so much so that it brought Southwest to start considering a small jet.

We'll see what happens.


User currently offlineFA4UA From United States of America, joined Nov 2003, 812 posts, RR: 20
Reply 6, posted (10 years 6 months 3 weeks 4 days 1 hour ago) and read 2856 times:

Forgive me if I sound a bit "Lofty" but... what's US' mission statement anymore? Where are they headed? Are they trying to be a superior East Coast Air Carrier? Are they trying to be a premier airline with good service to Europe? Are they just in survival mode right now and can't talk about the future?

It seems like a lot gloom and doom from all the news, the chatter on a.net and press releases, but what's the vision from upstairs saying?

FA4UA



The debate continues... Starwood or Hyatt... which is better
User currently offline727LOVER From United States of America, joined Oct 2001, 6422 posts, RR: 17
Reply 7, posted (10 years 6 months 3 weeks 3 days 20 hours ago) and read 2756 times:

Heavy mx will be done in house and hopefully we'll see UAIR pursue other opportunities such as doing mx for other airlines. Now the question is...will it be done in CLT or PHL or perhaps a new base in Right-To-Work Alabama.

Any chance they'll re-open the MX base in TPA?



Listen Betty, don't start up with your 'White Zone' s*** again.
User currently offlineMariner From New Zealand, joined Nov 2001, 25078 posts, RR: 85
Reply 8, posted (10 years 6 months 3 weeks 3 days 18 hours ago) and read 2625 times:
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FA4UA:

I think you've made a strong point, "lofty" or not.  Smile/happy/getting dizzy

The suggested addition of 60 x A320 to the fleet really confuses me, given that some 40 or so Embraers are coming in this year as well.

That's one heck of a capital expense for a company that's losing money.

At the time the Embraers were ordered, we were told that this was to be the way of the future. If 60 x A320's come in, then the Embraers aren't the only way of the future.

If 70 planes (30 x A320, 40 x Embraer) come into the fleet this year they have to fly somewhere, and simply increasing the frequency on present routes is a puzzle, because obviously, a lot of those routes are losing money, and the competition isn't just going to stand by and watch.

To start new routes is expensive, and it's hard to think of destinations that aren't already well served.

Not to mention the arrival of Southwest at PHL. US has said they will cut fares to compete, which means that routes that are losing money will lose more money.

I wish US well, I don't want to see all those people lose their jobs, but I don't understand what place US sees for itself in the future.

In the end, it's the vision thing and only the CEO can provide it. Mr. Siegel may or may not be a good manager, but he has not defined what he wants the airline to be.

Is it enough simply to survive, and hope that the good times will roll and solve the problems?

cheers

mariner



aeternum nauta
User currently offlineTrekster From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 6 months 3 weeks 3 days 18 hours ago) and read 2603 times:

So, what do u think, will they go under before the end of april

I hope not, im flying them on the 10th April


User currently offlineTOLtommy From United States of America, joined Dec 2003, 3289 posts, RR: 4
Reply 10, posted (10 years 6 months 3 weeks 3 days 17 hours ago) and read 2561 times:

"Forgive me if I sound a bit "Lofty" but... what's US' mission statement anymore? Where are they headed? Are they trying to be a superior East Coast Air Carrier? Are they trying to be a premier airline with good service to Europe? Are they just in survival mode right now and can't talk about the future?"

I've been wondering the same thing. What's the goal? I honestly think that when they first went CH11, the goal was to dump debt, restructure labor and AC lease contracts, and make the company pretty for a UA merger. Over at USaviation.com, it's very clear that US employees have their hopes pinned on a merger with UA. The UA bankruptcy has them scratching their collective heads.

To survive I think US needs to be shut down, and rebuilt from scratch. That includes laying off every employee, making them reapply, and hiring the ones who can best work under the new structure. Work rules, ground procedures, benefits, pay for performance, staffing, and even the fare structure need to be junked and recreated.

I don't know that the current leadership has the cojones to make it happen, tho....


User currently offlineTrekster From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 6 months 3 weeks 3 days 15 hours ago) and read 2454 times:

Toltommy,

But would that not cause a lot of problems, especially money wise, if they have to let go off every employee, that's thousands of people, would they not have to pay them like they do in the UK (There is a situation at my work where they are letting people go cause of money and this is one of the unions arguments)
It would also cause a huge headache to passengers,and I don't think usair want to do that do they, they want to keep people flying there airline.

I know in a way it makes sense, but u cant just stop a business like usair and start all over again,that would take months, even years to do.

(By the way,better get my holiday insurence before its too late, just in case)


User currently offlineAA717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 12, posted (10 years 6 months 3 weeks 3 days 14 hours ago) and read 2367 times:

You mean reincarnate them like PanAm and Braniff? When a famous name goes away, you can't restore it to its former glory. Too much baggage.

SWA is going into PHL BIG TIME. U will lose something like $.02/seat mile to them by matching prices...

Used airplanes to replace new airplanes that they can't afford to maintain? What? Did USAir hire Jeff Erickson and Peiser of TWA fame while we weren't looking?TC



FL450, M.85
User currently offlineGigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 13, posted (10 years 6 months 3 weeks 3 days 12 hours ago) and read 2257 times:

Capital expenses aren't real money to many major corporations.

When you put on a piece of capital, your bottom line doesn't change. Cash goes out, asset comes in, asset has same value as the cash for at least a certain amount of time.

That's why its important to learn to capitalize certain expenses to improve performance.

N


User currently offlineAALGAgirl From United States of America, joined Dec 2003, 9 posts, RR: 0
Reply 14, posted (10 years 6 months 3 weeks 3 days 11 hours ago) and read 2224 times:

I agree the next 30 to 90 days are very important US airways
1.came out of bankruptcy to fast
2.did not really cut back on any
service
3. They did however just layoff some more employees
Branson, is just sitting back waiting to get approval from someone to pick at them IE first he has to get approval or change the law of foreign ownership
then the second one would be Jetblue to start the picking
then us air will start selling off routes and or terminals
This is just another shame, I think the judge handling this one should relook
this carriers finance give them one more shot before the picking birds come down on it.


User currently offlineMariner From New Zealand, joined Nov 2001, 25078 posts, RR: 85
Reply 15, posted (10 years 6 months 3 weeks 3 days 11 hours ago) and read 2227 times:
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Gigneil:

Yes, I understand that. However, whether you're buying or leasing a plane, there is a large capital outlay.

In the case of the purchased plane you get the asset. In the case of the leased plane, you're stuck with the lease - which will have a minimum time frame attached to it.

In the case of the purchased plane, say you put down 10% - if you try to sell the plane immediately, it has already lost that much - if not more - in value, unelss you're doing a leaseback, in which case certain leasing conditions apply.

The second question becomes whether adding 70 aircraft to the fleet this year will improve performance.

As Frontier pointed out in their conference call a couple of days ago, adding routes and frequencies - that is, giving yourself the means to expand - is an upward pressure on the CASM. Apart from the cost of the aircraft, it comes from crew costs, airport costs, landing fees, fuel, catering, fuel, etc.

It's fine if you immediately have enough additional revenue to cover that upward pressure, but new routes and frequencies sometimes need time to mature.

And any upwards pressure on trhe CASM is about the last thing US needs right now.

cheers

mariner

ps: to be fair, Frotier was able to reduce their CASM - ex fuel - fractionally, despite their expansion.



aeternum nauta
User currently offlineN670UW From United States of America, joined Jul 2003, 1603 posts, RR: 8
Reply 16, posted (10 years 6 months 3 weeks 3 days 10 hours ago) and read 2167 times:

Heavy mx will be done in house and hopefully we'll see UAIR pursue other opportunities such as doing mx for other airlines. Now the question is...will it be done in CLT or PHL or perhaps a new base in Right-To-Work Alabama.

Heavy maintenance is done in CLT and PIT, not PHL.




670


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