SonOfACaptain
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Rumors From Within US Airways

Thu May 27, 2004 12:23 pm

My dad was telling me (furlough US pilot working for Mesa) that US Airways may sell 50 737s to FedEx. (25 currently flying and 25 that are in the desert)
That should bring in some more cash. Also, you guys probably already know of the 60 A320s they plan to buy for point to point service to compete with Southwest.

A final note is that we should know by October whether USAir will make it. (I also got this from my dad.)

-SOAC
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airtran737
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:24 pm

I can see the selling of the 737's. I cant see them buying 60 A320s....who'd finance them?
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
MSYtristar
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:25 pm

60 A320's for point-to-point competition against Southwest? Are they high?

"Metrojet 2" is not what US needs to start up right now.


Steve/MSY
 
SonOfACaptain
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:28 pm

"Metrojet 2" is not what US needs to start up right now.

It's not suppose to be a separate airline, it's going to be mainline.
Hopefully this will bring my dad back quicker.

-SOAC
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rjpieces
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:35 pm

My dad was telling me (furlough US pilot working for Mesa) that US Airways may sell 50 737s to FedEx

I have heard these rumors before...Another possible source of 737s for FedEx is United.
"Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon"
 
WidgetBoi
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:41 pm

Would the A320s have first and economy cabins or single class service?

Thanks for the help  Big grin

jeremy
 
iowaman
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:49 pm

My dad was telling me (furlough US pilot working for Mesa) that US Airways may sell 50 737s to FedEx. (25 currently flying and 25 that are in the desert) That should bring in some more cash.

Sure it would bring in some cash, but it will cost more for those 60 A320's then they will get from selling 50 737's..................
 
Vorticity
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:50 pm

Sad, I always liked the look of a 757 in US Airways colors. But it's better they go to UPS than sitting in the desert I suppose... let's use those planes!
Thermodynamics and english units don't mix...
 
SonOfACaptain
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:53 pm

Would the A320s have first and economy cabins or single class service?

I'm not sure but I would guess it would be a 2 class layout. But my dad told me that he wouldn't be surprised if US cuts out its F/C on domestic routes do to all the free upgrades that are costing them money. (THAT WAS JUST A THOUGHT, don't go around saying US is getting rid of its F/C  Smile )

-SOAC
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freshlove1
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:57 pm

I could believe this because US is trying to get the fleet that they have down to one type which will probably be Airbus. There were rumors like this floating around not to long ago saying that US Mainline wanted to get rid of all the Boeings and get more Airbus A/C. But remember rumors like this are a daily thing in this industry, but I don't doubt what your dad has herd. Does he fly the ERJ/CRJ/DH8/or B19 for Mesa/Air Midwest??
 
cancidas
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RE: Rumors From Within US Airways

Thu May 27, 2004 12:58 pm

ok, if in financial trouble then what is the point of buying 60 aircraft? doing that you're spending money you don't have. as much as i would love to see US flying on into the future i think that this may be a bad idea, that is if it's even true.
"...cannot the kingdom of salvation take me home."
 
SonOfACaptain
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RE: Rumors From Within US Airways

Thu May 27, 2004 1:00 pm

Does he fly the ERJ/CRJ/DH8/or B19 for Mesa/Air Midwest??

He flies the CRJ-200, based out of PHL.

-SOAC
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SonOfACaptain
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RE: Rumors From Within US Airways

Thu May 27, 2004 1:06 pm

ok, if in financial trouble then what is the point of buying 60 aircraft? doing that you're spending money you don't have.

I asked the same question to my dad. He said that although its going to be expensive, US NEEDS them to survive. OHHHH I forgot to mention that these 60 planes will be flying at a lower CASM (I think that is how you say it) than the other aircraft. (I'm not sure how they are going to do it)

-SOAC
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cancidas
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RE: Rumors From Within US Airways

Thu May 27, 2004 1:17 pm

man, that's part of the reason i'm studying airport managment. i never really cared for the managment side of the airlines, i rather be there where you can smell the fuel. Big grin

by the way, can someone explain CASM?

[Edited 2004-05-27 06:22:55]
"...cannot the kingdom of salvation take me home."
 
WidgetBoi
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RE: Rumors From Within US Airways

Thu May 27, 2004 3:29 pm

Thanks for the help SonOfACaptain!

BTW..great name  Big grin

jeremy
 
Trvlr
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RE: Rumors From Within US Airways

Thu May 27, 2004 3:43 pm

I can see the selling of the 737's. I cant see them buying 60 A320s....who'd finance them?

Airbus, of course! Big grin

Aaron G.
 
TriStar500
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RE: Rumors From Within US Airways

Thu May 27, 2004 4:36 pm

CASM = costs per available seat mile
Homer: Facts are meaningless. You could use facts to prove anything that's even remotely true!
 
AirframeAS
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RE: Rumors From Within US Airways

Thu May 27, 2004 4:40 pm

You just got to love the smell of jet exhaust when you arrive at work, eh?? Cleans your sinuses! LOL!!

US and Airbus?? Are they CRAZY?!? Is this another way for US to die off easily? Not a very wise move right now. Leasing them, on the other hand, is a different ballgame. But buying them....with what money and from whom??
A Safe Flight Begins With Quality Maintenance On The Ground.
 
gigneil
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RE: Rumors From Within US Airways

Thu May 27, 2004 4:51 pm

Its well known that part of the exit from bankruptcy included plans to deploy 60 new Airbus frames and retiring a lot of Boeings.

It was part of the deal with the pilots.

N
 
swardu
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RE: Rumors From Within US Airways

Thu May 27, 2004 9:57 pm

I'm still trying to figure out, though, how US can afford much of anything? They are having difficulties paying back their loan gaurentees, the employees have had to take 20-30% pay cuts and a fair amount of furloughs, a CEO switch (which wasn't bad) and a pension company (Alabama Pension) that is about ready to drop them and cut all financing, and US can afford to bring in 60 NEW, EXPENSIVE, Airbuses? The 737's won't garner them a lot of cash as they are some of the 1st ones off the -300 and -400 line. I can see simplification yes, but I think I would do it after I've established a good track record instead of in the midst of internal chaos.
 
clipperno1
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RE: Rumors From Within US Airways

Thu May 27, 2004 10:55 pm

If US Airways goes point-to-point (...for what reason ever), how much of an value are they to the Star Alliance?
"I really don't know one plane from the other. To me they are just marginal costs with wings."� Alfred Kahn, 1977
 
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ERJ170
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RE: Rumors From Within US Airways

Thu May 27, 2004 10:56 pm

isn't one of the airline alliances trying to get a LCC into their alliance? If so, US could be what STAR is looking for...
Aiming High and going far..
 
xjramper
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RE: Rumors From Within US Airways

Thu May 27, 2004 11:03 pm

how much of an value are they to the Star Alliance?

I would say more value. An increased number of routes from/to a particular city will result in more choices for the traveler especially if it consists of a New York route or a west coast route.

Just my .02

XJR
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GSPSPOT
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RE: Rumors From Within US Airways

Thu May 27, 2004 11:55 pm

It still could be valid info. Who knows? It comes from a source closer than you or me....
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NIKV69
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RE: Rumors From Within US Airways

Thu May 27, 2004 11:57 pm

Hey Matt,

It is good to see someone using their head, how can you buy 60 new planes? This year will tell the tale for US. I am glad you are studying airport management too Matt!
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
AA737-823
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RE: Rumors From Within US Airways

Fri May 28, 2004 12:23 am

No one would finance an order for 60 A320s... no one but Airbus, I guess. I mean, I really doubt it, but if Airbus did it, I would probably just roll my eyes and make some comment about European tax money. But then, I guess it would be American tax money that would be paying for the A320s anyhow (through previous bankruptcy funding / federal loans).

"They NEED these 320s to survive..." Funny, that's what they said about the ba-zillion regional jets (170s, CRJ's, 145s, whatever else they ended up with) and I don't see the company making a dramatic turnaround.

Also, the waiting list for new 737NGs is over two years. That it mind, surely the 320 wait is nearly as long, right? So how would 60 new 320s in two years help an airline set to exit existence in October???

Just skeptical thinking, feel free to show me the light.  Smile

R
 
GSPSPOT
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RE: Rumors From Within US Airways

Fri May 28, 2004 12:33 am

That's right.... I thought when they came out of bankruptcy, they said they were going to focus on more regional jet, point-to-point service...
Finally made it to an airline mecca!
 
SonOfACaptain
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RE: Rumors From Within US Airways

Fri May 28, 2004 1:58 am

That's right.... I thought when they came out of bankruptcy, they said they were going to focus on more regional jet, point-to-point service...

The RJ's are still going to be a big part of their plans. The 320's will just compliment them on bigger routes. Also, many of you think US will become all point-to-point. No, this is just for the 60 planes, although US is starting to put more planes on point-to-point routes. This is being done just to compete with LCC namely Southwest.

-SOAC
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Cubsrule
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RE: Rumors From Within US Airways

Fri May 28, 2004 2:05 am

Did US ever resolve the issues with their mechanics related to the heavy maintenance of the Airbii? I remember it was a big deal 6 months or a year ago, but I never heard about a resolution.
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ouboy79
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RE: Rumors From Within US Airways

Fri May 28, 2004 2:07 am

The order for 60 narrowbody Airbuses is not really a rumor. This something that has been publically talked about for the last few months. Once pilot negotiations complete and a new agreement is in place, the they will place the order. GECAS is probably going to be the one assisting them again as they have a financial stake in the airline (around 10-15% ownership). As far as how can they afford them? They will probably be leased through GECAS.

Reply to some comments above...

I'm still trying to figure out, though, how US can afford much of anything? They are having difficulties paying back their loan gaurentees

A false statement. They actually paid $250 million of it down in the first quarter of this year, well ahead of schedule and more than they were required to. This cut their outstanding ATSB backed loan to under $700 million.

a pension company (Alabama Pension) that is about ready to drop them and cut all financing

'Bama Dave has been successful in nearly everything he has done. It is important to note that he owns over 40% of the airline and controls the board of directors. He may not know a lick about running and airline, but he knows how to run a business and the new CEO is a great person to have in charge of getting the financials in order. However, if he does decide to cut and run it won't be like what most people think. I could honestly seem him throw everything out the window (which they are attempting to do is a subtle way) and start over from scratch. Now does this mean he shuts it down and then pulls a Swiss Airlines type of tactic (read: Piedmont becomes the new mainline carrier and US Airways, Inc. is liquidated) or an assett transfer to Sir Richard...who knows. All options are being looked at right now except and assett sale as that has seemed to have been taken off the table for right now. For right now.  Smile

The sale of 25 737s to FedEx has been discussed a lot over on the US Airways' PIT employee bitching board (read: US Aviation) and it seems to have been pushed aside.

Lot of rumors and they have a billion in the bank still with a strong 2nd quarter under way, after a good 1st quarter (they didn't lose money until paying the ATSB loan down by a chunk). We should hear a lot of news come June in terms of labor and more operational information in July as the new fall schedules are rolled out with the fleet reallignments.
 
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mariner
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RE: Rumors From Within US Airways

Fri May 28, 2004 2:14 am

The idea of the 60 x A320 is an old one. It was first suggested by the previous CEO, Mr. Siegel, before he left the company.

The problem is that there are not 60 x A320 available anytime soon. The A320 production line is maxed out. It is now between 15 to 18 months from order to first delivery. And no order has been placed yet.

The leasing companies have places in that production line, but most of those are already assigned to other airlines.

There are a few - a very few - used A320's available, but they are older birds and would require extensive maintenance.

Equally, US Airways is having some problems with the financing for the Embraers, so I can't see GECAS rushing to finance 60 more planes.

So - without wanting to burst anyone's bubble - I'll believe it when I see it.

cheers

mariner

[Edited 2004-05-27 19:22:10]
aeternum nauta
 
Guest

RE: Rumors From Within US Airways

Fri May 28, 2004 2:19 am

I've heard SWA is giving US until July 1 and they will lay the hammer down on the top 10 markets out of both PHL and PIT. Take it for what it's worth.
 
KaiGywer
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RE: Rumors From Within US Airways

Fri May 28, 2004 5:22 am

Cancidas, CASM is Cost per Available Seat Mile. It is the cost of flying one seat one mile. On the other hand you have RASM, revenue per available seat mile.
“Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, an
 
USairways16BWI
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RE: Rumors From Within US Airways

Fri May 28, 2004 5:28 am

instead of 60 A320's, how about 40 757's? lol just a thought. i love the 757. oh well.  Laugh out loud
 
masseybrown
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RE: Rumors From Within US Airways

Fri May 28, 2004 1:27 pm

There's a lot of financial misinformation in some of the above posts. I suggest anyone who cares about accuracy read the company's SEC Form 10-Q for the quarter ending March 31.

http://edgar.sec.gov/Archives/edgar/data/701345/000119312504081493/d10q.htm
 
AirframeAS
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RE: Rumors From Within US Airways

Fri May 28, 2004 4:07 pm

I've heard SWA is giving US until July 1 and they will lay the hammer down on the top 10 markets out of both PHL and PIT. Take it for what it's worth.

What source did you hear this from?? This is going to be very interesting once again.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
cancidas
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RE: Rumors From Within US Airways

Fri May 28, 2004 4:41 pm

take this into account, there is no news of this info at any of the people i work with, beit mainline or express. hmmm....
"...cannot the kingdom of salvation take me home."
 
AA717driver
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RE: Rumors From Within US Airways

Sat May 29, 2004 12:30 am

Massey--Can you give us the Cliff Notes version? The last time I tried reading a 10-Q filing, I needed therapy. Big grin

SOAC--Tell your dad to hang in there. I'm furloughed TWA/AA. Do whatever it takes to not let this affect the relationship with the family. That's what's important. Good luck.TC
FL450, M.85
 
Guest

RE: Rumors From Within US Airways

Sat May 29, 2004 12:34 am

What source did you hear this from?? This is going to be very interesting once again.

An SWA scheduler working on the bid.




 
N670UW
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RE: Rumors From Within US Airways

Sat May 29, 2004 11:36 am

Did US ever resolve the issues with their mechanics related to the heavy maintenance of the Airbii? I remember it was a big deal 6 months or a year ago, but I never heard about a resolution.

As of now, no. The company and the IAM are meeting with an arbitrator over the issue, although I'm not familiar with the timeline for when the decision will be announced.

Another interesting development, though, is that ST Mobile Aerospace has began work on the eleventh and twelfth Airbusses (an A319 and an A320), although the company originally stated only ten aircraft would be worked on initially by STMAE.


Edit: typo

670

[Edited 2004-05-29 04:43:07]
 
A330323X
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RE: Rumors From Within US Airways

Sat May 29, 2004 11:44 am

As of now, no. The company and the IAM are meeting with an arbitrator over the issue, although I'm not familiar with the timeline for when the decision will be announced.

Here's the most recent update from the IAM. It explains it pretty well. Expect a decision in August.


Airbus Subcontracting Arbitration Update

May 6, 2004

To All District 141-M Members at US Airways:

Dear Sisters and Brothers,

The arbitration hearing in the US Airways Airbus subcontracting dispute took place on April 30, May 3 and May 4, 2004 in Arlington, Virginia. Arbitrator Richard Bloch heard testimony from witnesses for both the IAM and US Airways.

The IAM maintains the same position we had when this dispute began last August –IAM-represented US Airways employees must perform all airframe heavy maintenance on US Airways’ aircraft, regardless of manufacturer or where the maintenance is performed. Several current and retired IAM Representatives testified at the hearing about the origin and intent of the contract language that has protected this work for more than fifty years.

A verbatim transcript of the three-day hearing will be sent to all parties within three weeks. The IAM and US Airways will file post-hearings briefs within thirty days of receipt of the transcript. Following submission of the post-hearing briefs, each party will have fifteen days to file a reply brief.

A three-member System Board, made up of one person appointed by the IAM, one by US Airways and neutral arbitrator Richard Bloch, will meet to discuss the case and issue a decision after all briefs have been submitted. No date has been set for the System Board to meet.

Thank you for your continued support.

Sincerely and fraternally,

Scotty Ford
President and Directing General Chairman
IAM District 141-M
I'm the expert on here on two things, neither of which I care about much anymore.
 
swatpamike
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RE: Rumors From Within US Airways

Sat May 29, 2004 12:17 pm

I don't think that we will see to many new aircraft at US Airways anytime soon. The regional jet deal is back in talks with GECAS after a downgrade of US corporate credit rating put the financing deal in jeopardy. I don't see how they could finance 60 320's.

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20040507/bs_nm/airlines_usairways_dc_5
 
flashmeister
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RE: Rumors From Within US Airways

Sat May 29, 2004 4:13 pm

Even if US and GECAS come to another agreement, the costs for all of the new RJs, not to mention the new Airbii, will be significantly higher, because of US' newly-lowered credit rating. How does Bronner really think he's going to pull this off?
 
cloudy
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RE: Rumors From Within US Airways

Sun May 30, 2004 10:53 am

I've heard SWA is giving US until July 1 and they will lay the hammer down on the top 10 markets out of both PHL and PIT. Take it for what it's worth
-----

If true this would constitute communications with a competitor with a view towards dividing or influencing a market. This is illegal. It is doubtful, then, that someone smart and highly placed enough to engage in this kind of activity would be so careless as to let it leak onto a public bulletin board. It is remotely possible, but not likely.

It is also uncharacteristic of Southwest to engage in outright predatory behavior. Competitors have been severely hurt by Southwest, but the actions Southwest took to hurt them were done for the purposes of making a profit whether they were still around or not. Southwest does not deliberately kill airlines in order to take their traffic.
 
iowaman
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RE: Rumors From Within US Airways

Sun May 30, 2004 11:00 am

I'm sorry but US and there fares are rediculous, I wanted to fly from LAS to CLT and it is $1951.00!!! Thats pathetic. I kind of hope they do go out of business
 
N670UW
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RE: Rumors From Within US Airways

Sun May 30, 2004 11:02 am

I'm sorry but US and there fares are rediculous, I wanted to fly from LAS to CLT and it is $1951.00!!! Thats pathetic. I kind of hope they do go out of business

When did you try to book in relation to the time of the trip? I find nearly $2,000 for an economy fare a bit hard to believe.



670
 
iowaman
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RE: Rumors From Within US Airways

Sun May 30, 2004 11:22 am

Leaving June 20th, has to be N/S because im flying alone.

http://www.expedia.com/pub/agent.dll?tovr=2004032200&ps3u=
 
iowaman
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RE: Rumors From Within US Airways

Sun May 30, 2004 11:24 am

Actually, it's only $951 because I would be flying one way, but still, wayyyyyyyy to much money,
 
gigneil
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RE: Rumors From Within US Airways

Sun May 30, 2004 11:55 am

If you're over 13, you can connect.

ATA has a $219 fare.

N
 
masseybrown
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RE: Rumors From Within US Airways

Sun May 30, 2004 1:15 pm

AA717, the Cliff notes version of the 10-Q is that as of April 1, UAIR had about $250 million free cash over required minimums and commitments against that of over $100 milliion for essential capital expenditures and over $100 million for pension contributions during the rest of 2004. The revised GECAS financing agreement says that GECAS will not finance any new aircraft after Sept 30, unless certain unspecified performance guarantees, such as an operating profit, are met during the second and third quarters.

It is *essential* for UAIR to generate a couple hundred million cash during the summer quarters. They probably haven't generated anything during April and May because of fuel prices and the lack of any new assistance (wages or productivity) from the employees, making performance during June - August crucial. Failure to build a cash cushion means no more new aircraft and a VERY difficult winter.