gilesdavies
Posts: 2268
Joined: Tue Dec 02, 2003 7:51 pm

Is This The Start Of The End For US?

Mon Mar 08, 2004 7:49 pm

Just found the below news article about US Airways, and it seems local government in the US is running out of patience with the airline and lack of improvement in it's financial affairs...

US Airways is reliant upon government backing and it looks like they maybe considering to to withhold any further payment!

http://www.zwire.com/site/news.cfm?newsid=11084404&BRD=2305&PAG=461&dept_id=478569&rfi=6

US Airways receives votes of no confidence
Key local government officials have lost confidence in US Airways and its ability to survive its ride out of bankruptcy and its upcoming battle with low-cost carriers in Philadelphia.

"We have no confidence they're going to survive, and we don't want to risk public money," Allegheny County Chief Executive Dan Onorato told the Pittsburgh Airport Area Chamber of Commerce at a meeting Friday in Moon Township.

Onorato said that the $269.3 million offered for capital improvements as part of Gov. Ed Rendell's package to keep the airline's hubs in Pittsburgh and Philadelphia is "off the table now."

"We didn't yank that money," said Chuck Ardo, Rendell's spokesman. "It was an offer made to US Airways (eight months ago) that required a commitment on their part about certain employment numbers and degree of service, and they rejected that" about a month later.

"Since then, there have been a number of conversations, and there will continue to be conversations in the hopes that US Airways will be able to get its financial house in order," he said.

The money "still could be there for the airline," Ardo said, as part of another offer. But there would still be conditions on service and number of employees attached.

"I can tell you for an absolute certainty that the state is going to be very conservative in its offer to safeguard whatever investment the public is asked to make," Ardo said.

Over the last year and a half, Onorato said, strategy has shifted from maintaining the hubs to survival of the airline.

"If I had to predict, I'd give a 50-50 chance US Airways will survive as a company," Onorato said.

"There is only one issue: That's reduction of the debt" used to build Pittsburgh International Airport, he said. Lowering the debt service cost would help US Airways, as well as any other airline doing business or interested in doing business here, he said.

"The only way for them to survive is to do a merger," said Dan Donatella, Beaver County Commissioners chairman. Though Donatella did not attend Friday's meeting, he said Onorato's remarks were "the consensus in all meetings I've attended. ... It is a very strong statement.

"All confidence, obviously, is lost," Donatella said.

Dick Shaw of Beaver, chairman of the board for Michael Baker Corp. and an Allegheny County Airport Authority Board member who attended the meeting, concurred with Onorato's assessment of US Airways' chances.

"Obviously, they have some serious problems," he said. "They can't rely on the federal government to keep them in business.

"As much as we need those jobs, these folks will go to work for somebody else. ... The transition will be painful, but we'll survive."

Karen Ferrick-Roman can be reached online at kroman@times online.com.

 
WMUPilot
Posts: 1428
Joined: Thu Jan 30, 2003 2:48 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 5:42 am

Not the start...just another in the long line
JetBlue - Bringing humanity back to air travel
 
AA737-823
Posts: 4888
Joined: Wed Mar 01, 2000 11:10 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 8:54 am

Well, I really liked the airline. I hope they make it. BUT- this is a FREE MARKET ECONOMY. I sure don't want another public dime sunk into that (or any other) airline. That's not how we're SUPPOSED to do things in this country. Now, after Sept 11, it was a different sotry- a bit of an emergency for all carriers. But that was well beyond two years ago.

R
 
User avatar
American 767
Posts: 3924
Joined: Wed May 19, 1999 7:27 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 11:53 am

Well they don't seem to grow, they seem to be shrinking in size and capacity. They are likely to close the PHL hub now that Southwest is applying to the DOT to get more gates and time slots in PHL, they closed already the BWI hub after Metro jet shut down operations, and like most carriers they are replacing mainline equipment with RJ's on some routes in their system.
I read in the last issue of Airliners an article all about Washington National airport (DCA), they explain that US Airways always had the most departures daily, 180+ (mainline/express/shuttle combined), more than any other US carrier. The airport closed for weeks after the Sept 11 terrorist attacks and now it seems that it has come back nearly to where it was pre-9-11 traffic wise, but US Airways is likely to cut flights out of DCA. If they continue to loose capacity in the DC area then they are going to move their corporate headquarters away from Arlington VA and move probably down to North Carolina which would make sence since they still have a main hub there. US Air has always been very strong in the NorthEast and on the East Coast.

Ben Soriano
Ben Soriano
 
fspilot747
Posts: 3455
Joined: Mon Nov 01, 1999 2:58 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 11:55 am

If they are selling assets (gates), it definitely looks gloomy. We'll have to wait and see what happens.


FSP
 
SHUPirate1
Posts: 3428
Joined: Sat Sep 20, 2003 2:53 pm

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:00 pm

American 767-You might want to check your sources about PHL...the airport is not slot controlled...
Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:12 pm

"We didn't yank that money," said Chuck Ardo, Rendell's spokesman. "It was an offer made to US Airways (eight months ago) that required a commitment on their part about certain employment numbers and degree of service, and they rejected that" about a month later.

Tis true!!! They dont care, they dug themselves into a hole and now they cant get back out because they just simply dont care.

"The only way for them to survive is to do a merger," said Dan Donatella, Beaver County Commissioners chairman.

Tell this dude: Who is gonna want to buy them out with the deep debt problem they got? If another carrier buys them out, THAT carrier will go under too. Well duh!

Like Ive always said in other posts, US is GOING to fail miserably one way or another before the year is out. Just watch. There has been too many USAirways threads about them going out of business....its to be expected and nothing new, we are all just waiting for it to happen.

A Safe Flight Begins With Quality Maintenance On The Ground.
 
jeffrey1970
Posts: 1231
Joined: Sat Apr 07, 2001 1:41 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:21 pm

AirframeAS,

I agree with you, especially on the part about a merger. I think it is safe to say that it is going to be a long time before any of the major us airlines get involved in a merger. At least that is my opinion. I think that if United had been able to do the merger with Usairways, United may be around today. Plus, if another airline was interested in Usairways assets, wouldn't it be cheaper to waite for them to go under and buy stuff at auction?
God bless through Jesus, Jeff
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:27 pm

Jeff,

Just wondering your opinion...if an airline is interested in merging with US or buying them out (think economics) where are they going to find the cash to do this? I think the saying is true when one gets married: 'My debt becomes your debt.' So I think that carriers are thinking about that quote alot. Its too much of a risk for anyone, expecially USAirway's closest partners, to take over US. Just let US go away quietly without any help.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
jeffrey1970
Posts: 1231
Joined: Sat Apr 07, 2001 1:41 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:45 pm

AirframeAS,

That is what I meant to say. I am sorry for not saying it better. I do not think any airline is going to be interested in taking on Usairways dept. I think that it would be better to buy there assets at auction.
God bless through Jesus, Jeff
 
N79969
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 12:50 pm

Obviously this is not good news but it does not necessarily signal the end is inevitable. I wish USAirways employees luck...it's going to be a difficult year.

 
FA4UA
Posts: 777
Joined: Sat Nov 22, 2003 6:26 pm

RE: Is This The Start Of The End For US?

Tue Mar 09, 2004 5:40 pm

Ok, I'll be the first to admit that the future is very dark for US, however I think it's important to ask... Who is this Onorato character? Did he get a chance to meet with the top brass at US? Did he get a chance to see the fabled Business Plan? Does he have a Business Degree or an Aviation Management Degree?

In other words, as far as I know this guy betting his 50/50 and stirring up a lot of controversy around that part of the country, might not have a real grasp on the situation. As far as we know, he might just be as informed as the headlines he reads! Too bad the article didn't elaborate on his credentials!

FA4UA
The debate continues... Starwood or Hyatt... which is better
 
flashmeister
Posts: 2671
Joined: Fri Apr 28, 2000 4:32 am

RE: Is This The Start Of The End For US?

Wed Mar 10, 2004 12:33 am

You don't have to meet with the top brass at US to see where this is going... loan covenants have to be met, they have to turn around to PROFIT by July, and their prime investor is getting anxious to get his money back. Add to that the labor trouble and LCC invasion, and there's no need for a meeting -- the future is plainly evident.

If UA had acquired US earlier, which I was vehemently in favor of, I would think that UA would be in the same deep well that US finds itself in today. While UA may get some US assets at auction when they die, I don't think it would be something on the level of AA+TWA. The US system, which was never well integrated anyway, is almost certainly going to be broken up piecemeal.
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

RE: Is This The Start Of The End For US?

Wed Mar 10, 2004 12:59 am

AA/TWA should have taught the airline world that mergers are just too expensive. I should say mergers between companies that have large amounts of debt and few assets are too expensive. Even though AA got a lot of TWA's debt eliminated through the pre-planned ch. 11 they still assumed a fair amount of it.

Bronner is sitting around watching the value of USAir's remaining assets languish while prospective buyers' bottom lines aren't getting significantly better.TC
FL450, M.85
 
Guest

RE: Is This The Start Of The End For US?

Wed Mar 10, 2004 1:06 am

The Embraer 170's will help, but they may be a bit late.
 
ScottB
Posts: 5414
Joined: Fri Jul 28, 2000 1:25 am

RE: Is This The Start Of The End For US?

Wed Mar 10, 2004 5:20 am

If the UA-US merger had gone through, the combined United Airlines likely would have declared bankruptcy in late 2001 or early 2002 and probably would have ended up liquidating. As part of the merger agreement, UAL would have paid out $60/share to US Airways shareholders (roughly $4 billion in cash expense) and assumed $7 billion in US Airways debt. Do you think that UAL would have survived as long as it has if it had paid out $4 billion in cash AND had to undergo the expense of integrating the operations of the two airlines while dealing with the after-effects of 9/11 and a recession? They were both losing money even before 9/11.

Until US Airways management bites the bullet and puts in place a sustainable business model which recognizes the realities of the air travel marketplace today, the company will continue to bleed cash until Bronner or the ATSB pulls the plug. Continuing to rely on last-minute-gouge and loss-leader fares, combined with inefficient scheduling at the hubs, will doom the airline.

FYI, Dan Onorato runs the county. It doesn't matter what his background is; he's the guy the airline has to negotiate with in order to get the concessions it wants at PIT. If he doesn't believe in the (lack of) a real business plan, why on earth would he give away the store in Pittsburgh? If US's plan is to cut back mainline service further and replace mainline jobs with lower-paying jobs at Midatlantic or Mesa, how does the county benefit from placing hundreds of millions of dollars in debt from the airport on its taxpayers?

Who is online

Users browsing this forum: a320fan, art, Baidu [Spider], BoeingVista, ciarano, czpdx, DeltaB717, GavinSharp, Google [Bot], hOMSaR, iamlucky13, ikolkyo, Jetty, karungguni, keesje, mclewis1, Miami, Midway737, par13del, SInGAPORE_AIR, ucdtim17, Ulsterman81, VCEflyboy, Yahoo [Bot] and 259 guests