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ERJ170
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US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 10:04 pm

http://www.usatoday.com/travel/news/2005-01-20-usair-airbus_x.htm

Looks like US Airways is cancelling 35 Airbus, and postponing other orders from Airbus..

Could this be the courts way of pushing Boeing later on?

The deal would end US Airways' rights or obligations to acquire 35 Airbus planes, delay delivery of other planes, and provide $6 million in cash to US Airways from conversion of credits it has with Airbus.

The U.S. Bankruptcy Court in Alexandria, Va., will hold a hearing to consider approval of the deal on Jan. 27, following any objections that are due by Jan. 25.

US Airways, which filed for Chapter 11 in September, has been working hard to trim the size of its fleet. It plans to become a low-cost carrier focused on point-to-point flying on the East Coast and in the Caribbean.
Aiming High and going far..
 
DAYflyer
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 10:20 pm

I wondered when this was going to happen. It was but a matter of time before they cancelled or defered odersof new aircraft. Is this a cancellation of all new aircraft orders, or just the narrow-bodies?
One Nation Under God
 
John
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:08 pm

I hope they didn't cancel the 10 A330-200 orders due in 2007. They very much NEED these planes for added long haul lift, as those 762s are getting OLD and TIRED.
 
HlywdCatft
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:18 pm

Lets not start the Boeing behind this conspiracy crap. Face it Airbus can't afford those planes. Just like CO possibly cancelling their recent 7E7 order has nothing to do with Airbus or cities in Europe threatening with tariffs, that only happens to Thai Airways.
 
PHLBOS
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:21 pm

Face it Airbus can't afford those planes.

Don't you mean US Airways can't afford those planes?
"TransEastern! You'll feel like you've never left the ground because we treat you like dirt!" SNL Parady ad circa 1981
 
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yyz717
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:24 pm

US does not need 332's. The only thing they need is profit.

It makes you wonder whether US could have been solvent and profitable had it not gone on an Airbus buying binge for no reason. Had US kept their M80, F100 fleets and not bought the 321/320/319, perhaps their balance sheet would have been stronger and their lease costs much lower.

Funny how so many airlines that fall into bankruptcy or liquidation have new fleets, such as Aero Lloyd, Swissair, Sabena, Ansett, Canada 3000, Midway.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
AA717driver
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:28 pm

This order is a liability on the books. They probably needed to get rid of it to avoid mandatory if small payments toward those planes.

Re: replacing old, tired 762's.

That's what I was talking about when U filed Ch.11 the first time. They will be unable to acquire new equipment for a LONG time. They will have no access to reasonable credit for a LONG time and any cash or equipment they are able to get will be financed at Mafia rates.

If they survive, it will be a decade-long recovery IF they do everything exactly correct. We have numerous examples of airlines that have filed Ch.11 over the past couple of decades. We have only a couple examples of those who have survived.TC
FL450, M.85
 
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yyz717
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:32 pm

'Old' 762's can be refurbished. Customers will not know the difference.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
N801NW
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:32 pm

Any chance NW could use this to accelerate A330 deliveries and move more DC-10's out to the desert? (still want to fly one though.)
 
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ERJ170
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:34 pm

I have to agree.. US doen't need to purchase any more aircraft.. They are getting the E170 aircraft in.. They could just update their interiors on their 737s, 757, and 767. You know, new seat covers, clean the walls, IFE, repaint... I'm sure it is much easier to update than to purchase new aircraft.. Their Boeing are closer to being paid for if they aren't already.. just work with what you got.. as long as you take care of what you got.. go for it.. it works for NW..
Aiming High and going far..
 
supa7E7
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:35 pm

AA717, actually Airbus will take orders from your kid if his or her cash flow looks appropriate. Your post is mostly nonsense.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
ATLhomeCMH
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:39 pm

It has nothing to do with Boeing. It has everything to do with the fact that US isn't profitable enough to buy new a/c AND avoid liquidation once they blow through the $900 million in loan guarantees they just received.
"The most terrifying words in the Engligh language are, 'I'm from the government and I'm here to help.'"-Ronald Reagan
 
clipperno1
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:51 pm

provide $6 million in cash to US Airways

Whooopee, what a HUGE saving. Seems like they are starting to collect the (as we like to call it here in Germany), "peanuts"...... Don't bash I don't want to see them go..never!

Funny how so many airlines that fall into bankruptcy or liquidation have new fleets, such as Aero Lloyd, Swissair, Sabena, Ansett, Canada 3000, Midway

Ansett new fleet?!! Whatever.

Anyhow...
If you're in deep financial sh*t and happen to have a simply common sense, would you go out and buy a new house or car? nope. cxx of the orderings is correct imo.
"I really don't know one plane from the other. To me they are just marginal costs with wings."� Alfred Kahn, 1977
 
AA717driver
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RE: US Airways Cancel/delay Airbus Orders...

Thu Jan 20, 2005 11:54 pm

Supa7E7--Well... TWA carried their A330 orders on the books as a liability (along with the RR Trent's that came with them). It impacted TWA's credit rating and was finally negotiated away when TWA converted them to A318 orders.

As for the rest of the post. After being through three bankruptcies with TWA and a brush with Ch.11 at AA and having intimate knowlege of the proceedings from a member of the creditor's committee on the last TWA filing, AND being on the APA BOD for the discussions and briefings prior to the brush with Ch. 11, I stand by my comments on the hurdles any company in Ch.11 faces when emerging from bankruptcy.

Because of its credit rating, TWA was paying as much for their MD80's as they would for a 757 at market rates. They had to go back to Carl Icahn to borrow money (in the mid-90's when money was flowing freely) because they couldn't get it anywhere else.

My kid may be able to order an A320. Whether he can pay for it is another matter. AND, more importantly (since my post had nothing to do with USAir's ability to order airplanes and everything to do with wanting to clear a liability off the balance sheet) having the A320 order on his balance sheet will negatively impact his ability to borrow money from me to buy more Yugi-Oh cards.  Big grin TC
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hawk44
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 7:50 am

Anybody know what type of Airbus aircraft were in the order?

Hawk44
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A330323X
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 7:58 am

As far as I've heard, US is cancelling 35 options and receiving their money back for them. I believe US still will have on order the 19 A320-series aircraft, and I'm near-certain that US will still have on order the 10 A330-200 series aircraft. Those aircraft still on order will be delayed, though. How much, I'm not sure, and I'm not entirely sure on the rest of it at this point.
I'm the expert on here on two things, neither of which I care about much anymore.
 
ScottB
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 8:52 am

From reading the docket with the bankruptcy court (here: http://www.donlinrecano.net/dr201/mwc/04-13819/dk001615-0000.pdf), it does appear that the 35 cancelled aircraft are "Purchase Right" aircraft, which would, as my best guess, be options with guaranteed delivery slots. The actual orders (19 A320/A321 and 10 A330 aircraft) appear to be delayed as part of this agreement. The court wouldn't be "pushing Boeing" given that the company itself is asking for this agreement with Airbus to be approved.

In any case, it's probable that the orders have been pushed back past 2007 (my guess would be to 2008 or 2009). The company will be returning 10 A319's to GECAS this year, and 15 737-300's to GECAS in 2006 and 2007. Given that the average age of the 737-300's will be over 20 years at the end of 2007, it's likely that the Airbus narrowbodies will largely be replacements in the fleet at that point. Similarly, the 767-200's originally delivered to PI will be roughly 20 years old in 2007.
 
Indy
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 8:59 am

If you were Airbus and you had an order for 35 jets from US Airways what would you do? Would you honor the order with the thought that you may be building 35 jets that won't be delivered? Is it possible that US Airways believes that Airbus won't honor the orders so to save face they go ahead and just terminate the orders?
Indy = Indianapolis and not Independence Air
 
gigneil
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 9:17 am

Any chance NW could use this to accelerate A330 deliveries and move more DC-10's out to the desert?

I have heard extensively that NW is looking to accelerate their A330 deliveries. I don't know if US cancelling their 332s (which we don't know for sure they are) would be fast enough for them. Those delivery slots would begin in 2007, and NW is scheduled to wrap up their delivery of 330s around then (I think).

NW only has 3 more 332s to receive. Its amazing how quickly they got those aircraft delivered after changing the order from all 333s to 14 and 10.

N
 
roseflyer
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 9:18 am

Are they still taking delivery of new E170s and CR7s? I heard that the financing on the Embraers crumbled due to US Airways not meeting credit requirements.

If you have never designed an airplane part before, let the real designers do the work!
 
GSPSPOT
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 10:01 am

Okay, forget about new aircraft for a while. As Yyz717 stated, the 762's can be refurbished. I would have no problems flying one at all if I felt it had been freshened, and offered features other airlines' planes do. As it stands now, though, my frequent-flyer partner says NW's 30+ year-old DC10's are better to fly on than US's 20-odd year-old 762's....
Finally made it to an airline mecca!
 
skymileman
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 12:49 pm

Surprise, Surprise, Surprise! I just hate to see any airline dieing the slow death that US Airways seems to be doing. Those poor employees are just stuck to go down with the ship! We all know that the executives are going to walk away with their pockets lined (With what we're not yet sure!).
-LMP
 
Planesmart
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RE: US Airways Cancel/delay Airbus Orders...

Fri Jan 21, 2005 1:08 pm

This will be a deal between the Courts, A, airline and other connected parties.

Has to be by mutual agreement, as option $'s are transferrable and sometimes deferable, but rarely refundable.

If the Courts cancelled the options without agreement, then A would hold the the $'s as compensation. This would extinguish a small asset on US's books and a significant contingent or even term liability.

Given the airlines condition, more likely the option $'s will be used as part-payment for confirmed orders that will definitely be delivered.

Court hearing will reveal all.