LGB Photos From , joined Dec 1969, posts, RR: Posted (7 years 2 months 1 week 4 days 10 hours ago) and read 1668 times:
ALEXANDRIA, Va., Sept 5 (Reuters) - A federal judge on Thursday allowed US Airways Group Inc. to return 67 aircraft, a key element of its plan to restructure itself under bankruptcy protection from creditors.
Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia approved a pact reached between the airline and certain leasing companies and creditors which had earlier objected to taking the aircraft back.
The lenders and leasing companies could still file claims against the airline related to the aircraft later in the bankruptcy proceedings, US Airways attorney John Butler told the judge.
US Airways, the nation's sixth-largest airline, filed for Chapter 11 bankruptcy protection on Aug. 11 after failing to win concessions from all of its unions, vendors and creditors to restructure its operations.
The airline had argued that the aircraft, a mix of Fokker 100s, MD-80s, Boeing 737s and Boeing 757s, no longer fit into its business plan.
Among those originally objecting were German state-owned bank Kreditanstalt fuer Wiederaufbau, with 17 planes involved, John Hancock Life Insurance Co. (two planes), Dutch bank ABN AMRO (two planes) and Credit Suisse First Boston (one aircraft).
All but 10 of the 67 aircraft are already mothballed. Under the deal reached Thursday, US Airways will pay some storage and insurance costs for a short period.
Butler said US Airways was negotiating to retire a further 22 aircraft. "This entire industry is involved in an exercise to reduce and retire aircraft. It's a process we intend to continue," he told the judge.
The airline is trying to cut costs by $1.3 billion and already has won more than $500 million in annual concessions from its pilots and flight attendants.
On Aug. 12, another judge permitted the airline to proceed with the first stage of its $500 million debtor-in-possession funding plan. The package is backed by a group led by Credit Suisse First Boston and Bank of America Corp..
Access to the next tranche, up to $175 million, is due to be considered on Sept. 26, at a hearing on whether to finalize court approval of the financing package. The bankruptcy court will then also review the status of a proposed $200 million equity investment that has been pledged to the carrier by Texas Pacific Group after it emerges from Chapter 11.
US Airways is the first major domestic carrier to seek bankruptcy protection since the Sept. 11 attacks triggered a financial crisis in an industry that already had been wracked by recession. The airline lost almost $2 billion last year and was $500 million in the red in the first half of 2002.
FutureFO From Ireland, joined Oct 2001, 2881 posts, RR: 34 Reply 2, posted (7 years 2 months 1 week 4 days 5 hours ago) and read 1364 times:
Not too many. But considering the fact that they have retired the MD80's, the F-100's, The F-28's, the B732's. But with them getting rid of the 752's would be a mistake. And considering that they don't have that much traffic to qualify in keeping the 333's,and the 762's.
N628AU From United States, joined Oct 2000, 324 posts, RR: 2 Reply 4, posted (7 years 2 months 1 week 3 days 23 hours ago) and read 1072 times:
Current fleet size as of two weeks ago was 311. They are retiring 29 B733 and B734 aircraft. 3 757s will be retired as well. Two 737 aircraft are already parked (tail nos 352 and 415 I believe?). This will put the total fleet down to 279, and will remain there to see if the fleet can be profitable. The airline can shrink to as few as 245 per the ALPA contract if necessary, but Siegel does not wish to shrink that far if not necessary. Also on the table is the A330/B767 situation. Current rumor is potentially returning the A330 fleet for some B767-300 aircraft instead, but only time will tell.
CV990 From , joined Dec 1969, posts, RR: Reply 5, posted (7 years 2 months 1 week 3 days 20 hours ago) and read 977 times:
Hi!
I flew last summer with USAir, they appeared to have a lot of airliner models and I think what they're doing is quite wise. If they stay only with the Airbus family - A319/329/321 - they can easely retire the 737/F100/MD80/757, all these models can be replaced by the Airbuses. About the long-haul fleet I think the major problem will be the replacement of the 767-200ER's. These are quite old aircraft ( some of them came from Piedmont!!!! ) but the A330-300 is too big to replace it, I think it could be wiser for them to inflect their strategy to the A330-200 maybe, but the short/medium haul fleet is wisely guaranteed by the Airbus family, no doubt for me!
regards
Goingboeing From United States, joined Dec 1999, 4875 posts, RR: 26 Reply 6, posted (7 years 2 months 1 week 3 days 15 hours ago) and read 875 times:
Wouldn't it be nice if the carriers who were not in bankruptcy could just end an obligation like this? I mean, AA bit the financial bullet and got rid of their F100's. U only had to file bankruptcy and presto - no more F100 obligations. Perhaps the others can petition their creditors to settle outstanding debt for pennies on the dollar, as bankruptcy is allowing US to do.
ChrisNH From United States, joined Jun 1999, 3156 posts, RR: 3 Reply 7, posted (7 years 2 months 1 week 3 days 14 hours ago) and read 854 times:
I think the 'news behind the news' is this: Airbus wins, Boeing loses. Surely operating costs were a part of the analysis over which types to mothball. And none of that crap from the pro-Boeing folks that Airbus essentially 'gave' the planes to USAirways. These planes still cost something to operate, and the Boeings they're parking have already been paid for. So, in the end, it's about which types are more economical to operate.
Goingboeing From United States, joined Dec 1999, 4875 posts, RR: 26 Reply 8, posted (7 years 2 months 1 week 3 days 13 hours ago) and read 806 times:
Chris - that's not the issue at all...the issue is that U is allowed to walk away from financial obligations. Try to tell the bank holding the note on your car that you aren't happy with the gas mileage, so your not going to make any payments on it anymore. My guess is that you'd be seeing the repo man in short order. Bankruptcy only allows U to walk away from obligations for just pennies on the dollar, and not have to worry about paying any lease payments, or any penalties for breaking the lease. It has nothing to do with Boeing versus Airbus.
CV990 From , joined Dec 1969, posts, RR: Reply 9, posted (7 years 2 months 1 week 3 days 13 hours ago) and read 780 times:
Hi!
Excuse me to "use my spoon" on this matter. The history of USAir is an amalgamation of small regional airlines, for me is quite a miracle the way these guys survived so long, can we imagine the operating costs of them? DC-9's, MD80's, 737-300's, 737-400's, Fokker F100's, 757-200's, A319's, A320's, A321's, A330-300's, 737-200's, 767-200ER's, 727-200's, how can an airline make money like that? I can a pilot fly today a MD80 and tomorrow a Fokker 100? This is the real issue of USAir! I think if they cut all those models and standard in the Airbus, soon we'll see USAir comming up as a Phoenix, I hope sincerely that! Look to Continental, they had the same problem, lot's of airliners, lot's of models, now they finnally got on Boeing with a very efficient and neat fleet those guys are ready to make money! Another airline that will need soon to review their fleet seriously is Northwest!
Regards
Goingboeing From United States, joined Dec 1999, 4875 posts, RR: 26 Reply 10, posted (7 years 2 months 1 week 3 days 12 hours ago) and read 752 times:
I dunno...it leaves a bit of a bitter taste in my mouth when this "Phoenix" rises due in large part to harming the leasing companies, oil companies, airports, etc. who will only see a small portion, if any, of the money they were owed.
CV990 From , joined Dec 1969, posts, RR: Reply 11, posted (7 years 2 months 1 week 3 days 11 hours ago) and read 721 times:
Hi Goingboeing!
I understand your point quite well, that's how the system works in USA and in my country Portugal it's not much different than that too!!! I was just looking to the aviation side, but I do agree with you, many people will "see the money by a binocular" - a portuguese expression for those that will actually just smell that money!
regards
Heavymetal From , joined Dec 1969, posts, RR: Reply 12, posted (7 years 2 months 1 week 3 days 11 hours ago) and read 694 times:
You nailed it on the head, GoBo.... this is just another chapter in a long sad THICK book entitled "How Our Economy Increasingly Rewards and Forgives Idiotic Choices By Well Paid Executives". Your example of the car and the gas mileage was a great one...where are these breaks for us?
L.1011 From United States, joined Aug 2001, 2209 posts, RR: 14 Reply 15, posted (7 years 2 months 1 week 3 days 6 hours ago) and read 550 times:
You must remember that USAirways employs tens of thousands of Americans. The last thing the economy needs right now is for USAirways to liquidate. So Bush is giving them some breathing room. While it may not be right, it is about the only thing this airline can do to stay in the air.
AA717driver From United States, joined Feb 2002, 1565 posts, RR: 17 Reply 17, posted (7 years 2 months 1 week 3 days 5 hours ago) and read 500 times:
I believe those 757's were the original EAL 75's. If so, they are real 'beaters'. They can be had for pennies on the dollar just like the 747-100's and DC10-40's(soon to be) in the desert. Save a buck and spend $100 in mx.TC
Goingboeing From United States, joined Dec 1999, 4875 posts, RR: 26 Reply 18, posted (7 years 2 months 1 week 3 days 4 hours ago) and read 438 times:
A couple of points. First, going back to the car analogy, the minute you drive off the dealers lot, it begins losing lots of value. That doesn't really matter to the bank that loaned you the full value of the car - they expect to get paid in full. Even if you check the internet and tell the bank "Edmunds says it's only worth this much", they'll still repo the car if you don't make payments. THat's no different than borrowing whatever amount they agreed to for those "beater" 757's. Bankruptcy is letting them skate on a lot of obligations.
UAL may not be far behind. Then they will get out of debt for pennies on the dollar, and they will have their wages and benefits cut to lean them up a bit, then they will head out into the world to do battle with Delta and AA, NW, and the others. Only THOSE airlines will still be paying 100 cents on the dollar for their debt.
So what's the most likely scenario? AA files. Followed by Delta. Followed by NWA, and even followed by SWA. All in an effort to "level the playing field". At what point will the courts and the government say "Enough". Hate to sound harsh here, but U should be liquidated, as should UAL if they file bankruptcy. Let the remaining airlines bring in any people and equipment they need. Everybody said there should be some consolidation in the industry. This is the best way to achieve that.
John From United States, joined Sep 1999, 1301 posts, RR: 8 Reply 19, posted (7 years 2 months 1 week 3 days 2 hours ago) and read 389 times:
Only 10 of the 34 US 757s were originally from Eastern. And let me tell ya, they're real DOGS, too. I believe the ex-Easterns are tail numbers 600 thru 610?
N628AU From United States, joined Oct 2000, 324 posts, RR: 2 Reply 20, posted (7 years 2 months 1 week 3 days 1 hour ago) and read 377 times:
The ex EAL aircraft are 600-609 and 618. I have confirmed two of the tail numbers being returned to the lessor are 615 and 616.
Many companies have filed for Chapter 11 bankruptcy protection, and have come back. In the airline industry there are America West and Continental. In other industries, there is Exxon and Federated Department Stores (the parent company of Macy's) to name a few. The lessors involved were given an opportunity to work with US Airways to voluntarily restructure agreements to lessen any impact. They chose not to, so US filed. This was an inevitable choice, as not taken some drastic action was going to lead to even more people harmed.
GoingBoeing, please spare the theatrics. You can go out and get a bunch of credit cards, buy all kinds of stuff, then realize you cannot pay for it, and then go back and declare bankruptcy, and get the debts discharged if the court so approves. Yes, your car would probably be reposessed. This is the difference between secured and unsecured creditors. The car loan (like a house mortgage), is a form of secured credit. So are the aircraft leases. The lessor is getting the aircraft back, the airline version of your car being reposessed.
N628AU From United States, joined Oct 2000, 324 posts, RR: 2 Reply 22, posted (7 years 2 months 1 week 2 days 22 hours ago) and read 308 times:
Tedski,
The 767-200s are not as bad as one may lead you to think. They are true workhorses, and rarely do they have reliability issues. The A330 may be nice from a passenger standpoint, but it is murder to support it, especially considering US is the only operator of the type in the country. The engine package is another issue entirely. Spare parts are not readily available from other carriers, as a great deal use the RR Trent or GE powerplant. Few run the PW4168. The current rumor making the rounds throughout the system is that the A330 will be the widebody type to be returned, and 767-300 aircraft procured in their place. Asiana has realtively new -300s available to lease (they are in the desert), and they also run the CF6 engine like our -200 fleet, making for very nice commonality and support issues.
TEDSKI From , joined Dec 1969, posts, RR: Reply 23, posted (7 years 2 months 1 week 2 days 17 hours ago) and read 281 times:
N628AU, you are forgetting that NW will be the other US carrier that will operate the A330 with the PW4168. I would think that US Airways would go for PW4000 powered aircraft after the incident on the ground with one of their GE CF6 powered 767-200ERs where the engine came apart during a test run.
Goingboeing From United States, joined Dec 1999, 4875 posts, RR: 26 Reply 24, posted (7 years 2 months 1 week 2 days 16 hours ago) and read 255 times:
GoingBoeing, please spare the theatrics. You can go out and get a bunch of credit cards, buy all kinds of stuff, then realize you cannot pay for it, and then go back and declare bankruptcy, and get the debts discharged if the court so approves. Yes, your car would probably be reposessed. This is the difference between secured and unsecured creditors. The car loan (like a house mortgage), is a form of secured credit. So are the aircraft leases. The lessor is getting the aircraft back, the airline version of your car being reposessed.
You know the difference between personal bankruptcy and corporate bankruptcy? It's your problem if you feel the need to "keep up with the Jones" by charging up your credit card for things you can't afford. It's way different in the business world. The corporation is COMPETING with other companies who are still paying their "unsecured creditors". 100 cents on the dollar. With the industry is such shitty condition, I would fully expect a BK filing by UAL to begin a domino effect of BK filings by the other airlines - if for no other reason than to allow them to COMPETE. That's why I say any airline that files BK should just be liquidated. It's painful, sure. But that would allow the healthier airlines to get people, equipment, routes, and most importantly INCOME to grow stonger. Sorry to sound so harsh, but sometimes, reality bites. At the very least, any BK reoganization plan should stipulate that unsecured creditors be paid no less than 90 cents on the dollar. Otherwise, you WILL see a parade of US airlines in bankruptcy court.
N628AU From United States, joined Oct 2000, 324 posts, RR: 2 Reply 25, posted (7 years 2 months 1 week 2 days 14 hours ago) and read 226 times:
GoingBoeing,
Than you must feel every corporation that files Chapter 11 must liquidate. That is just plain ludicrous. The bankruptcy laws exist for everyone's protection, but most of all, the creditors are. The creditors committee is very active in the courtroom pursuing no one's interest but their own. If this airline were to liquidate, most creditors would see nothing. Not a single penny on the dollar. All those you spoke of being harmed by Chapter 11 would be harmed to a much greater extent. This is a risky game, and liquidation is still a possibility (albeit remote), if the creditors convince the Court that is the best way for them to be paid (in this case, that is most likely false).
Tedski,
From a support perspective, going with the PW4000 just over the PHL incident would be a logistical nightmare for US. The parts, tooling, and training required would be a long term financial boondoggle. I do know that NW is getting the A330 with the PW4168, but that is not enough from a support standpoint. This is my job, and I can tell you that Boeing is much easier to support. I can on and on about the differences, but it would get too involved for this forum. Trust me, the Asiana 767-300 is the best bet for US right now.
26 TEDSKI: Regarding the PW4000 question, how do you handle the A330s logistically? Can't you get the same identical parts for a PW4000 on a 767-300ER like you w
27 Goingboeing: N628AU - WHich begs the question - is it in the best interest of the aviation industry to let U or UAL walk away from debt to compete with AA, NW, DL,
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