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US Airways Reaches $125 Million Agreement With ZW  
User currently offlineUALGSO From , joined Dec 1969, posts, RR:
Posted (9 years 7 months 1 week 1 day 18 hours ago) and read 9611 times:

A summary below

ARLINGTON, Va., Feb. 18 /PRNewswire-FirstCall/ -- US Airways Group, Inc. today announced that it has reached agreement with Eastshore Aviation, LLC, an investment entity owned by Air Wisconsin Airlines Corp., and shareholders, on a $125 million financing commitment to provide a substantial portion of the equity funding for a plan of reorganization (POR).
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The $125 million facility will be made in the form of a debtor-in- possession (DIP) term loan, to be drawn in the amount of $75 million (immediately upon approval by the U.S. Bankruptcy Court) and two subsequent $25 million increments. This loan would be second only to the Air Transportation Stabilization Board (ATSB) loan with regard to the company's assets that are pledged as collateral. Upon emergence from Chapter 11, the $125 million financing package would then convert to equity in the reorganized US Airways.

Air Wisconsin, based in Appleton, Wis., is the nation's largest privately held regional airline. In 2004, its 87 all-jet fleet generated approximately $700 million in revenue and flew more than 7 million passengers under the United Express brand. As part of this agreement, US Airways and Air Wisconsin will enter into an air services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under the US Airways Express brand. Air Wisconsin's arrangements with United Airlines are unaffected by this agreement with US Airways.

Pretty interesting read...
Looks like AWAC just found a back up in case UA turns to another carrier.

[Edited 2005-02-19 00:28:19]

[Edited 2005-02-19 00:31:03]

67 replies: All unread, showing first 25:
 
User currently offlineORDZW From United States of America, joined Aug 2004, 198 posts, RR: 3
Reply 1, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9454 times:

Originally, I was worried about this announcement, however I have a theory:

It might be possible that we are moving our 50 seat regionals to US Airways as a better fit, and then filling the United space with new, larger aircraft. This is something that I think United is looking for, and this may be a very positive move. I may just be looking at it through rose-colored lenses, but I have to stay positive!

It is worrying, but exciting at the same time!

What do you think?



9E, AA, AQ, AX, BA, CO, CP, DH, DL, EV, F9, FL, HA, HP, KL, NK, NW, OH, OO, QX, RP, RW, S5, TW, UA, US, WN, YV, ZK, ZW
User currently onlineERJ170 From United States of America, joined Apr 2004, 6771 posts, RR: 17
Reply 2, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9425 times:

Perhaps this is the reason ZW was looking at the E170???


Aiming High and going far..
User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4106 posts, RR: 5
Reply 3, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9395 times:

Wait, it says they aren't required to fly for US Airways Express...this could get interesting...

User currently onlineERJ170 From United States of America, joined Apr 2004, 6771 posts, RR: 17
Reply 4, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9369 times:

Hmm... this could be interesting.. ZW already basically owns UA at RDU... perhaps they will get a lot of the US at RDU also.. then they will have both sides of the terminal..

Or perhaps ZW could be looking at the future.. a hostile takeover.. and could run US themselves.. and then won't have to worry about UA and their contracts.. then, unlike DH.. they will be starting with established routes.. established aircraft.. and an already established name.. sounds like a plan to me..



Aiming High and going far..
User currently offlineORDZW From United States of America, joined Aug 2004, 198 posts, RR: 3
Reply 5, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9354 times:

Quoting FriendlySkies (reply 3):
it says they aren't required to fly for US Airways Express


That's what was weird to me, too.

It is very exciting, hopefully we'll hear something about the United side soon...



Edit to correct spelling

[Edited 2005-02-19 01:15:53]


9E, AA, AQ, AX, BA, CO, CP, DH, DL, EV, F9, FL, HA, HP, KL, NK, NW, OH, OO, QX, RP, RW, S5, TW, UA, US, WN, YV, ZK, ZW
User currently offlineSolehibob From United States of America, joined Feb 2005, 47 posts, RR: 0
Reply 6, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9316 times:

I wonder how this spins into the Indy Air situation?

User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 7, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9294 times:

Quoting ERJ170 (reply 4):
Or perhaps ZW could be looking at the future.. a hostile takeover.. and could run US themselves..


And how much of a stake exactly do you think $125 million would give AWAC in the carrier?



Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4106 posts, RR: 5
Reply 8, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9285 times:

Quoting SHUPirate1 (reply 7):
And how much of a stake exactly do you think $125 million would give AWAC in the carrier?


100%

j/k  Big grin


User currently onlineERJ170 From United States of America, joined Apr 2004, 6771 posts, RR: 17
Reply 9, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9268 times:

well, if ZW was good.. I'd say all they need 51%


Aiming High and going far..
User currently offlineCasInterest From United States of America, joined Feb 2005, 4629 posts, RR: 2
Reply 10, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9252 times:

This seems like a way to keep the major's operating , by being supported from the regionals. Maybe since US Airways is so close to the brink, this is a way for "United" to help out a code share partner. However Mesa, and Chautauqua are not involved which makes me wonder what exactly is going on at ZW. Could this also be leverage for them in the case that United dumps their contract and goes with another of the regional carriers?


Older than I just was ,and younger than I will soo be.
User currently offlineAvek00 From United States of America, joined Oct 2004, 4388 posts, RR: 19
Reply 11, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9244 times:

*mindless a.net armchair CEO hat on*

Maybe Air Wisconsin is trying to take over US ala Swissair/Crossair.

*mindless a.net armchair CEO hat off*



Live life to the fullest.
User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 12, posted (9 years 7 months 1 week 1 day 17 hours ago) and read 9238 times:

ERJ-Isn't AWAC among the better regionals out there? I know they don't quite compare to Chautauqua (who is excellent), but AWAC simply has a massive problem right next to Lake Michigan, and with a certain Elk Grove-based airline taking all of their ATC flow ground delay slots.


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently onlineERJ170 From United States of America, joined Apr 2004, 6771 posts, RR: 17
Reply 13, posted (9 years 7 months 1 week 1 day 16 hours ago) and read 9203 times:

SHUPirate1..

I have flown United a total of 2 times.. both were RDU-ORD-OAK...

The over all experience I hated.. not the actual flights, but the handling of me as a customer by United..

On all 8 legs.. the United system somehow cancelled all my seat reserves and put me at the back of the plane like I was supposed to be Rosa Parks.. that ticketed me off.. but on all the RDU-ORD and ORD-RDU flights, it was on the Bae146.. and those flights and crews were very good.. so I would have to say, from my limited experience, that ZW was pretty good.. hopefully US will let ZW have assigned and make up some of their own routes.. if they get E170 for them (or even E190) then that would be freaking awesome!



Aiming High and going far..
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 14, posted (9 years 7 months 1 week 1 day 16 hours ago) and read 9190 times:

A few comments:

Anyone who thinks that this is over and that Air Wisconsin is going to walk away with US at this price is absolutely crazy.

I agree that this provides ZW with a spot to place their CRJ-200 equipment in the event they are unable to renew their UA contract. The fact that ZW is not required to operate as US Airways Express makes perfect sense; they would prefer to keep the UA flying, and will only operate for US if necessary.

This will also greatly help US in renegotiating their existing RJ contracts with Chautauqua, Trans States, and *especially* Mesa, by providing US with another source of RJ feed.

As for ZW flying as US Airways Express, they could fly lots and lots of CRJ-200/700/900 equipment as US Airways Express. The US ALPA contract does not permit anyone other than MidAtlantic to fly the EMB-170. There is a scenario in which an affiliate US Airways Express carrier could be permitted to operate up to 25x EMB-190. Obviously, the BAe 146 falls under the scope of US mainline, as US mainline previously operated the type.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineAllstarflyer From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 7 months 1 week 1 day 16 hours ago) and read 9170 times:

Well, because I was concerned for them that UA may want to go with bidders other than ZW leaving them on the short end or out of UX flying, I'm glad ZW could get this deal. I'm confident they could serve US profitably.

-R


User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 16, posted (9 years 7 months 1 week 1 day 16 hours ago) and read 9126 times:

I just noticed that no one had actually posted the link.

Here's the press release: http://www.usairways.com/about/press/nw_05_0218.htm

And a Q&A: http://www.usairways.com/about/press/qa_eastshore.htm



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineSegmentKing From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 7 months 1 week 1 day 16 hours ago) and read 9049 times:

Scary to think that a major regional airline like AWAC is helping bail out a legacy, USAirways.

AWAC has always been one of the most finacially sound of all regional airlines, this move doesn't surprise me although I would have suspected they'd invest a lot more money.

-n


User currently offlineMojo89 From United States of America, joined Feb 2004, 123 posts, RR: 1
Reply 18, posted (9 years 7 months 1 week 1 day 14 hours ago) and read 8861 times:

Wow. Didn't see this one coming at all. From reading the press release and Q&A, this thing looks great overall! Our owners never cease to amaze me. It will be very interesting to see how this plays out. Seems like the worst case scenario so far is Eastshore Aviation gets its money back if US Air goes belly-up. Looks like we've definitely got a solid alternative to UA now! Sweet.


When the going gets weird, the weird turn pro. -Dr. Hunter S. Thompson
User currently offlinePSU.DTW.SCE From United States of America, joined Jan 2002, 7591 posts, RR: 27
Reply 19, posted (9 years 7 months 1 week 1 day 14 hours ago) and read 8828 times:

Sounds like somewhat of a win-win for AirWhisky.

ZW could remain flying for United, and not do any flying for US

If United drops them, they go and fly for US.
Probably screwing Mesa.

And the musical chairs game of regional airlines continues.


User currently offlineOuboy79 From United States of America, joined Nov 2001, 4601 posts, RR: 23
Reply 20, posted (9 years 7 months 1 week 1 day 13 hours ago) and read 8733 times:

This is definitely a bit of a shock as others have said. What this means? Couple scenerios...

1) Absolutely nothing then what has been stated...a way for Wiskey to hedge against UAL should that deal fall out.

or...

2) Setups the eventual investment by Sir Richard. Current ownership break down is RSA ~40%, GE ~10%, ALPA ~20%, followed by the other unions and creditors that picked up stock after the last Ch11. The stock will likely be eliminated, again, and shares reissued. We will probably see something like:

RSA - 26%, AWAC - 20%, GE - 10%, Unions - 20%, and Sir Richard with 24%. This will give Branson with the maximum amount allowed of voting stock. Once the common stock is issued I would expect Branson to get the maximum 49% with the rest going to the other preferred stock holders and the general public (probably OTC until they get relisted on NASDAQ).

or...

3) Sets up the irony of a regional buying the legacy made from regionals. Air Wiskey can become the primary feeder for US Airways and absorb the operation of Piedmont and PSA. Mid Atlantic will remain a branch of mainline since their payscale is much lower than those at AWAC. Also there would be the issue of the 146s as they would not be able to fly under the US Airways banner unless they were mainline - once a mainline plane always a mainline plane. Of course not sure how excited AWAC will be to fly Dash 8s again...but imagine if it opens up the opportunity to get a fleet of Q400s in here.

What ever happens is up in the air right now and we probably won't know for a few more months. One thing is becoming clear...she ain't dead yet and got some more life today.


User currently offlineN1120A From United States of America, joined Dec 2003, 26501 posts, RR: 75
Reply 21, posted (9 years 7 months 1 week 1 day 13 hours ago) and read 8644 times:

>Maybe Air Wisconsin is trying to take over US ala Swissair/Crossair.<

That is not what happened with SR/LX. SR actually owned a controlling share in LX. When SAirGroup went bankrupt, that freed LX which, with help from the Swiss Government, took over most of SR's fleet from the banks and became Swiss.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineJ32driver From United States of America, joined May 2000, 399 posts, RR: 1
Reply 22, posted (9 years 7 months 1 week 1 day 3 hours ago) and read 8405 times:

You guys are reading way to much into this. Its a hedge against UAL... thats all.

UAL keeps AWAC.... The $125m will eventually return to AWAC with interest.
UAL dumps AWAC.... They place 70 RJs with US
US liquidates.... The amigos running AWAC have claimed DIP behind only the ATSB.

The guys running AWAC are pretty darned smart. They have made it this far on nothing but private money. When your risking your own money and not the stockholders, you will make better decisions. I say again... these guys are smart.


User currently offlineATWZW170 From United States of America, joined Oct 2004, 904 posts, RR: 3
Reply 23, posted (9 years 7 months 1 week 1 day 3 hours ago) and read 8378 times:

I have to agree with ORDZW...this is awesome news for us. The 50 seat RJ's go to the US Airways system, we order larger EMB-190, that can fly in either the US OR UA systems...or the CRJ700, CRJ900 and fly those for UA...it's a total win win. If we fly for US Airways, we have the right to basically bump out another express carrier....probably Mesa...would really love to screw Mesa seeing as how they have screwed every other regional by paying very low wages and making the good ones, like ZW, have to become more competitive by cutting wages....and someone asked how does Indy play out in all this...they don't. I don't see why anyone would think that.

Can't wait to see what comes out next week!



Success is getting what you want...happiness is liking what you get
User currently offlineAA717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 24, posted (9 years 7 months 1 week 1 day 2 hours ago) and read 8333 times:

A330323X--I'm assuming you still believe your CBA is worth more than the paper it's written on?

Have they not proved that they can impose any contract they want? All they have to do is rattle the 1113 sabre again and 'viola!' your SCOPE allows 100 seaters.

Good luck.TC



FL450, M.85
25 ATWZW170 : I don't think that Air Wisconsin wants to keep the 146. When we had a revenue share contract, we made tons of money thanks to ASE...now that it's a fe
26 PSU.DTW.SCE : So here's a theory......that could potentially play out. United drops ZW.......Picks up Mesa to replace flying. Mesa drops US, ZW picks up US. There a
27 ATWZW170 : That is so true....all these no name airlines are all of a sudden flying for major carriers....I wonder if Colgan Air is going to be a good airline to
28 Post contains links and images Ouboy79 : ATWZW170 - I can guarantee you that the 146s will not go to US Airways...Why? View Large View MediumPhoto © Frank C. Duarte Jr. Once its been flo
29 A330323X : As I already said, Anyone who thinks that this is over and that Air Wisconsin is going to walk away with US at this price is absolutely crazy. Remembe
30 Lowecur : All should become clearer on 3/15/05. US Airways needs to submit their reorganization plans to the bankruptcy court on this date, which needs to inclu
31 Ouboy79 : Right now RSA is at a point where they can do two things... 1) Invest more and be an additional DIP financer (remember UAL has several). 2) Suck it up
32 Post contains links and images A330323X : We'll see what happens...but I think RSA will remain part of US AIrways - in a smaller fashion. I really disagree. Dr. Dave (and his ego) needs comple
33 Flyibaby : Is anyone considering that this also might help position UA to resume a merger with US once out of bankruptcy as reported last week? I realize that ZW
34 ATWZW170 : I kind of thought about that as well. Our owners have done the smart thing and now if a merger where to happen, Air Wisconsin just might have a voice
35 Post contains images Ouboy79 : Ed - you catch on quick in terms of the pic. As far as Doc Dave's ego. Yeah you have a point...but it will come down to whether or not RSA wants to pu
36 Supa7E7 : If UA screwed them over, at least they have plenty of cash. Why would UA donate further money to an already profitable regional, anyway? So with this
37 Post contains images A330323X : As far as Doc Dave's ego. Yeah you have a point...but it will come down to whether or not RSA wants to put up more cash to ensure their stake in the f
38 FriendlySkies : Does UA still own a large portion of ZW, or have they given up all their shares in the company? I know at one point UA completely owned ZW, but I don'
39 Piedmontbrat : If US Airways is smart, they'll dump Mesa as their express carrier like a hot potato. Mesa is the single worst carrier I've ever tried to fly. I hope
40 Avek00 : UA needs to help itself at this point - can't even think about helping US...
41 ORDZW : AWAC is currently 100% privately owned. The only ties we have with UA is a contract agreement, (which will hopefully continue). There are the three m
42 Mojo89 : FriendlySkies- UA does not own any of ZW. It was purchased from them in 1993 by CJT Holdings who has owned it ever since.
43 CcrlR : If that happens then we will party like it's 1990 again. I rather see them get CRJ-900s and the 700s if they need to which would be better than the E
44 Tockeyhockey : Scary to think that a major regional airline like AWAC is helping bail out a legacy, USAirways. ok, i could be wrong about this, but as i understand t
45 Avek00 : "but USairways is NOT a legacy carrier. they are a LCC that managed to grow into something pretty big." An airline that, until recently, had the highe
46 Tockeyhockey : granted, US is not an LCC in terms of being inexpensive, but it was a small regional airline that flew mainly in PA. in that sense it is more closely
47 Flyibaby : Tockey Granted so..but with the aquisition of piedmont and psa in the 80's, it ended all that.
48 ATWZW170 : I've heard that US had better numbers than UA...kind of scary to think about.
49 Avek00 : "Tockey Granted so..but with the aquisition of piedmont and psa in the 80's, it ended all that." Exactly - US was a MASSIVE operation by the early 199
50 Post contains images Ouboy79 : Tockey - I would recommend some sites like airchive.com and other sites that cover the history of PSA, Piedmont, Allegheny, Mohawk, etc. Allegheny was
51 Post contains links CasInterest : Pittsburgh Gazette Here is a more detailed article, Basically 1. ZW gets the option to fly 70 of the 50 seat regional routes for US Airways. 2. 3 Sea
52 OzarkD9S : US, nor any of it's merger partners with the possible exception of PSA was ever an LCC. US (Allegheny), Piedmont, Mohawk and Lake Central were all loc
53 Post contains images Ouboy79 : Each little piece is starting to fall together...this is getting interesting.
54 Flyibaby : CasInterest I needed that laugh...thanks.
55 ATWZW170 : It just go to show you that UA can't boss around the regionals anymore. I think for the past two years AWAC has been playing nice and UA tried to cram
56 UALGSO : I believe that when everything gets sorted out that this will be the beginning of closer US/UA partnership i.e. somekind of buyout here in the future.
57 Ouboy79 : Hate to tell ya...UA isn't going to be buying US with their lack of cash and higher employee costs. No merger. Plus UAL still has to figure out what t
58 Post contains links A330323X : US Airways' motion to approve the agreement with the bankruptcy court is now available at http://www.donlinrecano.net/dr201/mwc/04-13819/dk001866-0000
59 Ouboy79 : I believe once they go over 70 RJs they will become a J4J company...just clearing it up - that is for any over 70 and not just for the CR9s. Now to se
60 A330323X : I believe once they go over 70 RJs they will become a J4J company...just clearing it up - that is for any over 70 and not just for the CR9s. Yes, thou
61 PSU.DTW.SCE : I assume this means the "wholely-owned" are safe by whatever fallout may or may not happen (PDT/ALG, PSA). Basically its Mesa & TSA who risking being
62 Midway2AirTran : Good move for Air Whisky! Good way to leverage themselves against the UAL termoil and Mesa's aggressiveness. Also helps that AWAC is privately owned f
63 PITrules : WASHINGTON (AP) -- US Airways Group Inc. could add up to 70 regional jets to its fleet through its proposed link-up with Air Wisconsin Airlines, which
64 ERJ170 : I read somewhere that ZW was going to add a few CRJ, but more 90 seat options.. do they have to be the CR9 or can they be the E90/E95?
65 A330323X : Basically its Mesa & TSA who risking being screwed. And Chautauqua. Again, I don't expect *all three* contracts to be rejected. I think it'll likely b
66 PITrules : No, United may cause United to lose two Express carriers in a year. That's what I meant to say, thanks
67 ATWZW170 : This is going to get very interesting in the next few weeks....Mesa is chomping at the bit to replace us and if UA really wants a crappy product, then
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