akjetBlue
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Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:19 am

Wow!

SAO PAULO, Brazil, Sept 15 (Reuters) - Embraer (EMBR4.SA: Quote, Profile, Research) (ERJ.N: Quote, Profile, Research) on Wednesday said it had suspended aircraft deliveries to US Airways (UAIR.O: Quote, Profile, Research) in the first indication the airline's filing for bankruptcy protection could affect the Brazilian aircraft manufacturer's sales targets.

"Deliveries are temporarily suspended while Embraer's negotiations with US Airways and the main financiers continue," said a spokeswoman for Empresa Brasileira de Aeronautica (Embraer), the world's fourth largest commercial aircraft manufacturer.

According to court documents filed by US Airways in the United States, the carrier owes Embraer $1.47 billion for future aircraft commitments.

Embraer was sticking to its target of delivering 160 of its small and medium-sized aircraft this year pending the outcome of the talks with the U.S. airline, the spokeswoman said.

US Airways, the No.7 U.S. airline, filed for Chapter 11 bankruptcy protection for a second time in two years on Sunday, casting a cloud over large orders it has made for planes built by Embraer and its Canadian rival, Bombardier (BBDb.TO: Quote, Profile, Research) .

US Airways ordered 85 of the 70-seat EMBRAER 170 regional aircraft in May 2003 in a $2.1 billion deal.

Embraer said earlier this week that it had delivered 12 of those planes in the first half of this year. Industry analysts say US Airways has received 22 jets from the order so far.

Embraer stock was 1.35 percent weaker at 20.40 reais in Wednesday afternoon trading in Brazil. The country's benchmark Bovespa stock index was up 0.6 percent at the time.

Bombardier said on Sunday that its total aircraft deliveries for the current fiscal year would not be affected by US Airways' filing for bankruptcy protection.

Save a horse! Ride a Cowboy!
 
toltommy
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:22 am

Anybody need a jet, quick? Delivery spots just opened up at Embraer!
 
NW747400
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:29 am

Well Embraer got the jitters that US is gonna go belly up. TOLtommy said it best "Anybody need a jet, quick? Delivery spots just opened up at Embraer!"


P.S. If US does go belly up will it make the situation for the other airlines better? Their passengers have to go to another airline could this be just what DL,CO and UA needs to help them get back on their feet?
NW747400
 
NIKV69
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:47 am

What Embraer has done makes perfect sense, US can't pay it's bills and with B6 starting at LGA it's going to get worse. I think US should say "uncle" they have just about run out of options.
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
planemaker
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:53 am

If US does go belly up will it make the situation for the other airlines better?

My two cents - I think that there is still too much LCC capacity coming on stream to make the situation better for the other airlines in a sustained manner - there might be a blip in load factors but yields will remain depressed.

However, sub 70-pax aircraft pricing will probably be taking a big hit over the next couple of years. You probably won´t be able to "give" 50-seat RJ´s away.  Wink/being sarcastic
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
as739x
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:56 am

"Embraer said earlier this week that it had delivered 12 of those planes in the first half of this year. Industry analysts say US Airways has received 22 jets from the order so far."



So how many EMB does USAirways has? Where are the 10 missing planes?

ASSFO

"Some pilots avoid storm cells and some play connect the dots!"
 
FlyGuyClt
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:59 am

And so we have the perfect replacement for the NWA DC9's.

Just a little goofy humor for the day.

Living here in CLT, I hope USAirways management can come up with a plan that works and returns their company to financial stability. The employees of USAirways are derserving professionals.

Safe Flying  Smile
Florida Express, Braniff II and ......
 
S12PPL
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 3:04 am

Yet another sign the end is very near for US. This is a sad time in the industry, as one of the best known airlines in the United States is slowly dying.

I don't see how US can possibly "come back from the dead" as the "new" USAirways out in Alabama.....I just don't see that happening at all.
Next Flights: 12/31 AS804 PDX-MCO 2/3 AS19 MCO-SEA QX2545 SEA-PDX
 
BR715-A1-30
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 5:01 am

Analysts were predicting US to go Belly-up in 2001. My friend brought me a timetable in 2001 and told me to enjoy because it would probably be the last one. I'll believe it when they fly their last flight.
Puhdiddle
 
dbo861
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 5:21 am

""Embraer said earlier this week that it had delivered 12 of those planes in the first half of this year. Industry analysts say US Airways has received 22 jets from the order so far."



So how many EMB does USAirways has? Where are the 10 missing planes"

12 Planes in the first half, or 6 months of the year, that's through June. US has received 22 so far, but this is September...3 months later. That might be an explanation.
 
Cory6188
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 5:25 am

Has US made any response to Embaer's decision to stop delivery of the planes?
 
SPREE34
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 6:01 am


"Has US made any response to Embaer's decision to stop delivery of the planes?"

What are they going to say? Give us the airplanes we can't pay for?
I don't understand everything I don't know about this.
 
akjetBlue
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 7:33 am

SPREE34-

Why not? Since JetBlue "doesn't pay for their airplanes," why should US Airways?  Smile/happy/getting dizzy

Save a horse! Ride a Cowboy!
 
MD-90
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 8:20 am

Only a company in Alabama that manages people's retirements would be dumb enough to invest so heavily in US Airways.

It's going to be bad for Alabama taxpayers if US Airways goes under, strange as that seems.
 
flybyguy
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 8:32 am

What Embraer has done makes perfect sense, US can't pay it's bills and with B6 starting at LGA it's going to get worse...

Although I would love to see la Guardia become a second smaller JetBlue hub... JetBlue's presence at LGA hardly upsets anything more than the NYC-Florida market. By far most other carriers out of LGA have more cities and especially STATES to sell to customers.
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
dutchjet
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 8:53 am

This is interesting, since some have suggested that US's new bankruptcy filing was a pre-packaged proceeding, meaning that just about all of US's creditors, banks, lessors, etc had agreed to the proceeding......the idea was that everything would go on in a normal fashion at US, and the only reason for the new bankrupcty filing was to "beat up" employees and the unions and convince them to accept wage cuts and productivity increases.

Embraer's suspension of deliveries to US suggests that it is taking US's Chapter 11 filing very seriously, and that all financial agreements may not be in place over at US Airways. I hope I am wrong, but things do not sound to good for US.

Then again, over a 100 new A32X airliners, 9 new A333s, plus 85 E170s and a good number of CRJS in the past few years......dont you think US has ordered far too many new aircraft? And, this buying spree has certainly added to US's financial problems in recent years.
 
bennett123
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 8:57 am

The question is which supplier or leasor will be next?.
 
FLY777UAL
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 9:09 am

This could be perfect for United...73 unfilled spots.

F L Y 7 7 7 U A L
 
A330323X
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 9:28 am

Embraer Stops Deliveries

ARLINGTON (theHub.com) - Brazilian aircraft manufacturer Embraer today said it has suspended aircraft deliveries to US Airways following the company’s filing for Chapter 11 bankruptcy court protection. “Deliveries are temporarily suspended while Embraer's negotiations with US Airways and the main financiers continue," a spokeswoman for the aircraft manufacturer said.

In a statement, US Airways said, "Embraer has been a great business partner and we will continue to work with them. This decision is one of many reasons why we advised our labor leaders that it will be much worse for employees if we had to file for Chapter 11. We will adjust our business plan accordingly, but our ability to grow is going to be limited." US Airways ordered 85 of the 70-seat Embraer 170 regional aircraft in May 2003. The company has received 22 jets from the order.

---------------------------------------------------------------------------

And there you have it. Make things look bad, so the unions give in.
I'm the expert on here on two things, neither of which I care about much anymore.
 
nickofatlanta
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 10:15 am

A33032X -
I would hope at this point we can all agree that we don't need to "make things look bad" at US Airways, they are pretty bad. It's a fact as far as I'm concerned. Being in Chapter 11 is a pretty bad thing!
 
ua777222
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 11:26 am

Wait,

Are the 170's(?) that US is taking, are they for USX or US Airlines?

Thanks again.

UA777222
"It wasn't raining when Noah built the ark."
 
SegmentKing
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 11:41 am

well all union contracts can be voided by the bankruptcy judge, so it doesn't matter who USAirways is trying to convince of the bad financial position.

-n
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
 
freshlove1
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 11:56 am


"US can't pay it's bills and with B6 starting at LGA it's going to get worse"


Bankruptcy Code provides a priority status for post-petition purchases (goods and services received after the date of the filing). We (US) can and will pay for all such post-petition goods and services in the normal course of business.

US can pay their bills just like they have in the past and will in the future and B6 doesn't pay hardly anything for those Airbuses due to the lease deal they have with them. When they start paying the full lease payments on those planes we will see how much profit B6 is making.
 
AirframeAS
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:27 pm

The real question is are any of the current EMB jets that US has...are they paid for. AND...does US owe any monies to EMB to the planes that have not been delivered or manufactured yet?
A Safe Flight Begins With Quality Maintenance On The Ground.
 
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mariner
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 2:39 pm

Freshlove1:

You don't really believe all that crap about JetBlue's supposed deal with Airbus, do you?

If you do, take a squizz at JetBlue's SEC filings - they'll show how much they are paying for the planes, both leased and purchased.

Airbus doesn't let a plane off the property until there is a full payment deal in place with a financier - a leasing company or a financing bank(s).

cheers

mariner
aeternum nauta
 
flyibaby
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 4:28 pm

Freshlove, B6 also doesnt have unions to deal with..big plus, and their planes are consistently full. When they don't see the potential they thought they would have in a market, they simply pull out. i.e. ATL-LGB. They are very smart, and very savy, and are paying on their A/C
 
B6FA4ever
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 5:21 pm

just a quick comment regarding us (B6) starting service out of LGA. like some one mentioned above...we are only gonna fly LGA-FLL. that is ONLY 1 market. there are so many other florida cities and (again like stated above) states thats connected to LGA. We won't put that much of a dent on US Airways. its only LGA-FLL.

and thank you Mariner and Flyibaby...good explanation!

i do hope for the best for US Airways and all their employees and their families.

UA777222, i believe that the E170's were for their USX carriers. the pix i come across on airliners.net all say US Airways Express on the fusalage (spelled?) please correct me if i'm wrong  Smile/happy/getting dizzy

~B6FA4ever
 
777ER
Crew
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 5:59 pm

UA777222
The EMB170s are all for US Express.
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planemaker
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 6:53 pm

"Wow!"

This thread goes to show how important managing the media is. EMB announces after US Airways enters BK that it has "suspended" aircraft deliveries and it merits a thread.  Smile

On the other hand, BBD announced before US Airways entered BK that it was "deferring" CRJ deliveries and it more or less passed below the radar screen. End result is the same - no aircraft deliveries to US Airways, but EMB´s timing makes it look worse.  Wink/being sarcastic
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
bennett123
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 7:10 pm


Clearly no one is going to continue deliveries unless they are going to be paid.

If I was a leasor, I would be checking the contract.
 
planemaker
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 7:22 pm

Back in May, an analyst with JP Morgan said in a research note that GECAS does USD$2.7 billion worth of total business with US Airways. In a press release on May 12th, GECAS announced that that 66 of the 170+ BBD & EMB aircraft just ordered by US Airways would come from existing orders GECAS had placed with both manufacturers.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
Regis
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 9:00 pm

This thread goes to show how important managing the media is. EMB announces after US Airways enters BK that it has "suspended" aircraft deliveries and it merits a thread.

On the other hand, BBD announced before US Airways entered BK that it was "deferring" CRJ deliveries and it more or less passed below the radar screen. End result is the same - no aircraft deliveries to US Airways, but EMB´s timing makes it look worse"


Planemaker, what is your point? Are you suggesting Embraer should have announced the suspention of aircraft deliveries before the bankruptcy filing? In the absence of a payment default by USAirways, I don't think there would be a legal basis for that. I actually think that it was honorable for Embraer to only announce this action after the bankruptcy than to have jumped ship in middle course, which would have been tantamount to a no-confidence vote in US Airways future, further accelerating its downwards spiral.
 
planemaker
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 9:24 pm

Regis, there are a couple of points to draw which have nothing to do with "honour" and everything to do with business - BBD got the jump on EMB.

Both BBD and EMB had the same US Airway´s financial information. However, BBD elected to proactively deal with the situation and made a concerted effort to negate any negative press. When US Airways and BBD announced that they had reached an agreement to defer CRJ deliveries a few weeks prior to US Airway´s BK, there was relatively little media noise and BBD´s share price was not affected (surprisingly.)

However, EMB was not proactive in dealing externally with US Airways deteriorating situation. By announcing a suspension AFTER US Airways entered BK instead of coming to some sort of an agreement "a la BBD" before hand, EMB has in fact high lighted its "no-confidence vote in US Airways future, further accelerating its downwards spiral," as you put it. Consequently, more media attention was spot lit on the announcement and the EMB share price dropped.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
ChiGB1973
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 10:52 pm

"Only a company in Alabama that manages people's retirements would be dumb enough to invest so heavily in US Airways.

It's going to be bad for Alabama taxpayers if US Airways goes under, strange as that seems."


The Retirement System of Alabama is worth $26 billion. Though it is not good news, the taxpayers won't suffer in Alabama. Educate.

M
 
AZjetgeek
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RE: Embraer Suspends US Airways Jet Deliveries

Thu Sep 16, 2004 10:53 pm

What seems overlooked in all the previous posts in this thread is that US placed the $4.3 billion order for RJ's through BBD and EMB in April 2003, a month AFTER emerging from their last Ch 11 filing. They ordered 170 aircraft that they likely did not need. Granted, I'd imagine they thought that by ordering when they did they could hedge against the likelihood of higher prices for the RJ's in the coming years.

It should also be noted that US created MidAtlantic Airways as one of their USX carriers and specified that MidAtlantic would only fly the EMB 170's.

GECAS has agreed to take some of the 85 CRJ's US ordered. With EMB announcing it has suspended delivery of its RJ's to US, is it safe to assume that some of the remaining 63 ERJ's will be diverted to GECAS?

US created this mess and others, including their employees and GECAS, are paying the price for the airline's poor management.
Long live the RJ!
 
ua777222
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RE: Embraer Suspends US Airways Jet Deliveries

Fri Sep 17, 2004 12:00 am

I'm having issues understanding who own's what. Please help if possible. If a UAX CRJ is bought doesn't say Mesa or Chautauqua or Trans States Airlines own the a/c? Thus meaning that they pay for the a/c and all of its operating costs and then nail UA for whatever is agreed? Or is USX just a branch off of USair and not a 2nd party airline?

Thanks for any help!

UA777222
"It wasn't raining when Noah built the ark."
 
Dasheighty
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RE: Embraer Suspends US Airways Jet Deliveries

Fri Sep 17, 2004 1:48 am

I was Thinking (Which is dangerous.)

If Us Airways folds I wonder if Jet Blue And or southwest will Pick up those Embraer's that are being hold as well as pick up Us Airways route structure should they Flop. ...Perhaps there is a side deal here.

I hear I solitary trumpet playing the Godfather Theme.
 
AZjetgeek
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RE: Embraer Suspends US Airways Jet Deliveries

Fri Sep 17, 2004 2:10 am

I actually emailed US a couple months ago about the subject of the duplication of aircraft from different manufacturers. For example, their USX fleet includes the CRJ-200 (50 pax) and the ERJ-145 (50 pax). The response I received said to the effect that their USX carriers own some of the aircraft listed as part of the USX fleet, and, for that reason, there is duplication.

To me, that doesn't answer the question completely, which is, why wouldn't US purchase the same aircraft as what their Express carriers already own?

It concerns me that they have something like nine USX carriers, three of which they own. That number of carriers contributes to the problems the mainline carrier has in terms of diversity of aircraft when it would make more sense economically to standardize, e.g. WN, B6, F9.
Long live the RJ!
 
FA4B6
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RE: Embraer Suspends US Airways Jet Deliveries

Fri Sep 17, 2004 3:17 am

I know US and LOT are getting the the 170's, and jetBlue is getting the 190's. Who is getting delivery of the 175's and 195's?
"Leap! And the net will appear."
 
airways6max
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RE: Embraer Suspends US Airways Jet Deliveries

Fri Sep 17, 2004 3:54 am

This is not surprising, given that US has entered Chapter 11 for the second time in two years. No aircraft manufacturer will want to deliver planes to an airline that doesn't have the money to pay for them.
 
akjetBlue
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RE: Embraer Suspends US Airways Jet Deliveries

Sat Sep 18, 2004 2:15 am

Didn't Air Canada order the 175s?

Anyone else know who ordered the 175s or 195s?

-Philzy
Save a horse! Ride a Cowboy!