USA320Pilot
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- May 18, 2003
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ALPA MEC talking points - March 30, 2005
The Republic/Wexford/US Airways deal
On March 14, US Airways announced that it had reached an agreement with Republic Airways Holding, Inc., and its majority shareholder, Wexford Capital LLC, on an equity and financing package that includes a $125 million dollar investment upon US Airways' emergence from Chapter 11.
The agreement also includes options for obtaining 110 million dollars of other liquidity enhancements that would be available prior to emergence to assist US Airways in completing its restructuring.
Republic is the parent company of Chautauqua Airlines and Republic Airlines. Both those airlines fly as US Airways Express carriers.
The agreement allows US Airways to exercise its option to obtain $110 million dollars through the sale of certain assets. These assets include ten EMB-170 aircraft currently owned by US Airways and three EMB-170 aircraft currently committed for delivery to US Airways; other EMB-170 related assets, such as a flight simulator; 113 commuter slots at Reagan National Airport; and 24 commuter slots at the LaGuardia airport. US Airways currently operates 25 EMB-170 aircraft.
This option can be exercised prior to the effective date of US Airways' plan of reorganization, but no later than Dec. 31, 2005.
In addition, US Airways could assign to Republic the leases for an additional 15 EMB-170 aircraft. Republic would enter into a regional jet service agreement that would continue the operation of the aircraft as US Airways Express. In addition, Republic would simultaneously lease back the slots to US Airways. At any time on or after the second anniversary of the slots sale/leaseback agreement, US Airways will have the right to repurchase the LaGuardia and Washington slots at a predetermined price.
After the effective date of US Airways' POR, if US Airways does not exercise the slots sale/leaseback option, Republic then has an option to purchase/assume debt and leases for all 28 EMB-170 aircraft and to fly them as US Airways Express. If this portion of the agreement is implemented, it would constitute the sale of US Airways' MidAtlantic aircraft to Republic. If either option is exercised, Republic will comply with the applicable provisions of all existing agreements with US Airways regarding MidAtlantic Airways.
This equity investment is contingent on several events:
US Airways must secure a total of $350 million in new cash investment (including the $125 million from Republic and the $125 million previously secured from Eastshore Aviation, LLC) to finance the US Airways POR and other conditions, including Republic being satisfied with US Airways' business plan.
The agreement provides for comparable treatment such as representation on the US Airways board of directors as was provided to Eastshore.
The agreement also includes a commitment by US Airways to amend and restate its existing jet service agreement with Chautauqua, to assume that agreement, and to enter into a new jet service agreement with Republic for regional jet feed using the EMB-170 and 190 aircraft under the US Airways Express brand.
On March 31, US Airways is scheduled to seek the court's approval for this proposed agreement.
ALPA’s response
The MEC recognizes that the Republic Airways Holdings agreement with US Airways may impact the careers of US Airways’ pilots.
ALPA is evaluating all pertinent LOA 91 provisions in response to pilots’ concerns about any possible MDA transaction resulting from US Airways' proposed agreement with Republic Airways, and what US Airways' agreement with Republic could mean for MDA pilots and for all pilots on the APL list.
ALPA continues to assess every aspect of this situation and all possible outcomes so that the rights and protections contained in the MDA contract, LOA 91 and the entire current contract, will be preserved.
It is critical that we fully understand the potential agreement and all LOA 91 implications, evaluate the legal procedures available to us, and prepare for our next steps. This evaluation period is absolutely necessary. In a situation like this, where several parties are involved, the process becomes complicated. However, ALPA will not jeopardize the careers of MDA pilots, or other US Airways pilots, by prematurely stating our intentions until we have evaluated every piece of information that is needed to represent the best interests of all US Airways pilots.
March 30, 2005 MEC ALPA resolution
During a special MEC meeting on March 30, the MEC unanimously passed a resolution that directs that a response be filed on March 30 with the Bankruptcy Court stating that ALPA is reserving all rights under the Collective Bargaining Agreement.
The resolution also states that:
The US Airways MEC will continue to pursue every opportunity to achieve the most advantageous outcome for all US Airways’ pilots, and
the US Airways MEC directs the MEC Officers and MEC Negotiating Committee to meet with all other parties to this agreement as necessary in order to resolve the career impact issues resulting from the provisions of the Republic Holdings – US Airways agreement, including job and seniority issues.
The Republic/Wexford/US Airways deal
On March 14, US Airways announced that it had reached an agreement with Republic Airways Holding, Inc., and its majority shareholder, Wexford Capital LLC, on an equity and financing package that includes a $125 million dollar investment upon US Airways' emergence from Chapter 11.
The agreement also includes options for obtaining 110 million dollars of other liquidity enhancements that would be available prior to emergence to assist US Airways in completing its restructuring.
Republic is the parent company of Chautauqua Airlines and Republic Airlines. Both those airlines fly as US Airways Express carriers.
The agreement allows US Airways to exercise its option to obtain $110 million dollars through the sale of certain assets. These assets include ten EMB-170 aircraft currently owned by US Airways and three EMB-170 aircraft currently committed for delivery to US Airways; other EMB-170 related assets, such as a flight simulator; 113 commuter slots at Reagan National Airport; and 24 commuter slots at the LaGuardia airport. US Airways currently operates 25 EMB-170 aircraft.
This option can be exercised prior to the effective date of US Airways' plan of reorganization, but no later than Dec. 31, 2005.
In addition, US Airways could assign to Republic the leases for an additional 15 EMB-170 aircraft. Republic would enter into a regional jet service agreement that would continue the operation of the aircraft as US Airways Express. In addition, Republic would simultaneously lease back the slots to US Airways. At any time on or after the second anniversary of the slots sale/leaseback agreement, US Airways will have the right to repurchase the LaGuardia and Washington slots at a predetermined price.
After the effective date of US Airways' POR, if US Airways does not exercise the slots sale/leaseback option, Republic then has an option to purchase/assume debt and leases for all 28 EMB-170 aircraft and to fly them as US Airways Express. If this portion of the agreement is implemented, it would constitute the sale of US Airways' MidAtlantic aircraft to Republic. If either option is exercised, Republic will comply with the applicable provisions of all existing agreements with US Airways regarding MidAtlantic Airways.
This equity investment is contingent on several events:
US Airways must secure a total of $350 million in new cash investment (including the $125 million from Republic and the $125 million previously secured from Eastshore Aviation, LLC) to finance the US Airways POR and other conditions, including Republic being satisfied with US Airways' business plan.
The agreement provides for comparable treatment such as representation on the US Airways board of directors as was provided to Eastshore.
The agreement also includes a commitment by US Airways to amend and restate its existing jet service agreement with Chautauqua, to assume that agreement, and to enter into a new jet service agreement with Republic for regional jet feed using the EMB-170 and 190 aircraft under the US Airways Express brand.
On March 31, US Airways is scheduled to seek the court's approval for this proposed agreement.
ALPA’s response
The MEC recognizes that the Republic Airways Holdings agreement with US Airways may impact the careers of US Airways’ pilots.
ALPA is evaluating all pertinent LOA 91 provisions in response to pilots’ concerns about any possible MDA transaction resulting from US Airways' proposed agreement with Republic Airways, and what US Airways' agreement with Republic could mean for MDA pilots and for all pilots on the APL list.
ALPA continues to assess every aspect of this situation and all possible outcomes so that the rights and protections contained in the MDA contract, LOA 91 and the entire current contract, will be preserved.
It is critical that we fully understand the potential agreement and all LOA 91 implications, evaluate the legal procedures available to us, and prepare for our next steps. This evaluation period is absolutely necessary. In a situation like this, where several parties are involved, the process becomes complicated. However, ALPA will not jeopardize the careers of MDA pilots, or other US Airways pilots, by prematurely stating our intentions until we have evaluated every piece of information that is needed to represent the best interests of all US Airways pilots.
March 30, 2005 MEC ALPA resolution
During a special MEC meeting on March 30, the MEC unanimously passed a resolution that directs that a response be filed on March 30 with the Bankruptcy Court stating that ALPA is reserving all rights under the Collective Bargaining Agreement.
The resolution also states that:
The US Airways MEC will continue to pursue every opportunity to achieve the most advantageous outcome for all US Airways’ pilots, and
the US Airways MEC directs the MEC Officers and MEC Negotiating Committee to meet with all other parties to this agreement as necessary in order to resolve the career impact issues resulting from the provisions of the Republic Holdings – US Airways agreement, including job and seniority issues.
You are correct on both.
