10/12/02 Chip's Corner Released

[chipmunn]

[P][FONT face=Times New Roman size=3]USaviation.com has released this week''s Chip''s Corner article titled US Airways Fleet Plan Restructuring Update. The column provides a pre-bankruptcy versus post petition analysis of the company''s fleet plan, specific bankrputcy actions, an examination of key events from last week, and what the fleet and employee staffing could look like in the future. [/FONT][/P]
[P][FONT face=Times New Roman size=3]The column can be viewed by clicking onto the following link:[/FONT][/P]
[P][A href=http://www.usaviation.com/nm/anmviewer.asp?a=669&z=The][FONT face=Times New Roman size=3]http://www.usaviation.com/nm/anmviewer.asp?a=669&z=The[/FONT][/A][FONT face=Times New Roman size=3] column can be v8[/FONT][/P]

 

[PHL]

Why the additional 20 A330 options? Was this the original deal with Airbus, or are those 20 options new as part of the restructuring?

If they are new, why - especially considering the comment that a 767-300ER swap is still a possibility.

 

[chipmunn]

The original A-330 order was for 7 deliveries, 7 to be re-confirmed, and 16 options.

US then reached agreement for three deliveries and accepted to of these aircraft; however, we revenue began to slide aircraft number ten was deferred.

The company holds one delivery position and 20 options.

Chip

 

[curious]

What are the proposed delivery dates on the orders? And I am assuming that the options sit in never-never land until US decides what to do with them in the distant future?

 

[DCAflyer]

Chip,

Does the company have plans to further retire aircraft as new Airbusses come online? In other words, what are Dave's thoughts on rebuilding and growing the airline after we emerge from C11? If we are to remain a stand-alone carrier with domestic and international alliances (i.e., if the unique corporate transaction doesn't come to fruition, where will that leave us in terms of our franchise? (And, by the way, these questions are not meant as an invitation by the pessimists to rehash the theory that we are going to be a de facto UAL regional airline, which I find to be a preposterous assertion!)

DCAflyer

 

[chipmunn]

Curious & DCFlyer:

Curious asked: What are the proposed delivery dates on the orders?

Chip answers: Curious, the past public disclosure said there would be three A320 family deliveries in the fourth quarter 2005, with additional deliveries in 2006. The remaining A330 is scheduled for delivery in 2006.

DCflyer asked: Does the company have plans to further retire aircraft as new Airbusses come online? In other words, what are Dave's thoughts on rebuilding and growing the airline after we emerge from C11? If we are to remain a stand-alone carrier with domestic and international alliances (i.e., if the unique corporate transaction doesn't come to fruition, where will that leave us in terms of our franchise? (And, by the way, these questions are not meant as an invitation by the pessimists to rehash the theory that we are going to be a de facto UAL regional airline, which I find to be a preposterous assertion!)

Chip answers: DCFlyer, I believe it is too soon to know what the company will do regarding fleet rationalization. The lease negotiation process is on going and must be decided first; however, an all Airbus fleet does provide many benefits. In my opinion, the dooms day crowd who believe US will become a UA feeder is a a preposterous assertion because it defeats the US alliance benefit. The only way US receives alliance incremental revenue is when a passenger takes a flight on a US aircraft; therefore, the alliance provides long-haul expansion motivation. When market conditions permit, I see long-haul flying from the hubs expanded to the Midwest, Southwest, Northwest, and West Coast markets, increased Central American, Caribbean, and European flying.

As MDA comes on-line, some of the Large RJs will replace B737s, these B737s will fly current East Coast A319 routes, and the A319s will be redeployed into long thin, long-haul markets. This will better match capacity with demand, lower unit costs, and increase revenues.

Chip