USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
The impetus behind out of seniority furloughs, no severance pay, and no MDA displacements to permit new furloughs to fly at MDA is based on two issues: the 150 mainline aircraft point-to-point flying and to conserve cash during the judicial reorganization.
Every union was briefed on this plan months ago, but in the case of ALPA the RC4 dictators have ignored the company’s alternative plan and the advice of the advisor’s who said this plan could be implemented.
As I have previously discussed, the 282 mainline fleet, that would have incrementally increase to 320 aircraft, was based on labor participation and the implementation of the Transformation Plan (TP). The TP is forecast to provide a 4% profit margin and the 150 aircraft mainline fleet would provide a 8% profit margin. There are many creditor’s that are pushing the unsecured creditor’s committee and the company to implement the 150 aircraft plan as part of the new business plan, plan of reorganization, and disclosure statement.
It’s unclear at this time if the plan for out of seniority furloughs is a “club†to get TP labor participation or is the beginning of the 150 aircraft plan.
As I understand it, the 150 aircraft plan provides enormous cost savings by using the court to reduce fixed costs that could not be done outside of the bankruptcy court. It’s a myth that you cannot shrink to profitability in bankruptcy because the company has tools at its disposal that are not available outside of bankruptcy.
Potential cost savings could include hub elimination, better flight crew cross utilization, increased aircraft productivity/utilization, reducing the size and scope of Philadelphia and Charlotte flying, closure of the Pittsburgh maintenance facility, elimination of the A330, B767, and B737s, to create fleet rationalization. This would permit the company to pull down the Charlotte A330 and B767 heavy maintenance tracks, the entire Pittsburgh maintenance facility, eliminate about two thirds of reservation sales functions and possibly close both the Pittsburgh and Winston-Salem reservation sales offices, close at CTO’s, and if the company wins the A320 grievance award, the company would only have to conduct B757 overhaul for a short period, until these aircraft could be replaced with A322 and A321 aircraft.
A key component of this plan to reduce a huge training expense would be to furlough out of seniority.
The operational business plan would be to emulate JetBlue with probably B757, A320, EMB-170/195, and CRJ-200/700/900 aircraft to offer point-to-point flying from 7 East Coast cities: BOS, LGA, PHL, DCA, FLL, PIT, & PHL. Today’s Pittsburgh Post-Gazette wrote two articles that indicate the company may now have decided to implement this plan:
US Airways may cut jet fleet - Pilots would face furloughs, changes in work rules
See Story
US Airways' (Pittsburgh) November flight cuts may hold for a year
See Story
I believe there are two key points here. This plan is being pushed by the creditors and the company does not want to implement the 150 aircraft plan, however, maybe forced to by the creditor’s since management no longer controls the airline. In addition, each union’s leadership has known about this plan and ignored the risks, especially ALPA’s RC4 who have known about this plan for months. I believe it’s important to “shoot the messengerâ€, but if you do not like this plan then pilot’s should contact the PHL and PIT Reps and other union members should contact their Reps for an explanation on why there are no new labor accords, which could eliminate about 10,000 jobs.
In summary, if labor wants to participate in about a 282 aircraft TP, with increases in flying a mainline aircraft over time, then each union better obtain a tentative agreement this week. If not, then employees should get ready to implement the 150 aircraft point-to-point fleet plan to fully emulate JetBlue, versus the LCC/network carrier hybrid business model. If this plan occurs, expect the company to petition the court to furlough all groups out of seniority by position/base, not provide severance pay, or J4J opportunities.
Late today the ALPA MEC unanimously passed a resolution directing the NC to obtain a TA and there are no restrictions on the potentail agreement contents. The company is expected to file its S.1113(e) motion as early as tomorrow and the proposed contract terms will be made public. There is one narrow opportunity still available for every union to obtain a TA, but the window is almost closed.
Regards,
USA320Pilot
Every union was briefed on this plan months ago, but in the case of ALPA the RC4 dictators have ignored the company’s alternative plan and the advice of the advisor’s who said this plan could be implemented.
As I have previously discussed, the 282 mainline fleet, that would have incrementally increase to 320 aircraft, was based on labor participation and the implementation of the Transformation Plan (TP). The TP is forecast to provide a 4% profit margin and the 150 aircraft mainline fleet would provide a 8% profit margin. There are many creditor’s that are pushing the unsecured creditor’s committee and the company to implement the 150 aircraft plan as part of the new business plan, plan of reorganization, and disclosure statement.
It’s unclear at this time if the plan for out of seniority furloughs is a “club†to get TP labor participation or is the beginning of the 150 aircraft plan.
As I understand it, the 150 aircraft plan provides enormous cost savings by using the court to reduce fixed costs that could not be done outside of the bankruptcy court. It’s a myth that you cannot shrink to profitability in bankruptcy because the company has tools at its disposal that are not available outside of bankruptcy.
Potential cost savings could include hub elimination, better flight crew cross utilization, increased aircraft productivity/utilization, reducing the size and scope of Philadelphia and Charlotte flying, closure of the Pittsburgh maintenance facility, elimination of the A330, B767, and B737s, to create fleet rationalization. This would permit the company to pull down the Charlotte A330 and B767 heavy maintenance tracks, the entire Pittsburgh maintenance facility, eliminate about two thirds of reservation sales functions and possibly close both the Pittsburgh and Winston-Salem reservation sales offices, close at CTO’s, and if the company wins the A320 grievance award, the company would only have to conduct B757 overhaul for a short period, until these aircraft could be replaced with A322 and A321 aircraft.
A key component of this plan to reduce a huge training expense would be to furlough out of seniority.
The operational business plan would be to emulate JetBlue with probably B757, A320, EMB-170/195, and CRJ-200/700/900 aircraft to offer point-to-point flying from 7 East Coast cities: BOS, LGA, PHL, DCA, FLL, PIT, & PHL. Today’s Pittsburgh Post-Gazette wrote two articles that indicate the company may now have decided to implement this plan:
US Airways may cut jet fleet - Pilots would face furloughs, changes in work rules
See Story
US Airways' (Pittsburgh) November flight cuts may hold for a year
See Story
I believe there are two key points here. This plan is being pushed by the creditors and the company does not want to implement the 150 aircraft plan, however, maybe forced to by the creditor’s since management no longer controls the airline. In addition, each union’s leadership has known about this plan and ignored the risks, especially ALPA’s RC4 who have known about this plan for months. I believe it’s important to “shoot the messengerâ€, but if you do not like this plan then pilot’s should contact the PHL and PIT Reps and other union members should contact their Reps for an explanation on why there are no new labor accords, which could eliminate about 10,000 jobs.
In summary, if labor wants to participate in about a 282 aircraft TP, with increases in flying a mainline aircraft over time, then each union better obtain a tentative agreement this week. If not, then employees should get ready to implement the 150 aircraft point-to-point fleet plan to fully emulate JetBlue, versus the LCC/network carrier hybrid business model. If this plan occurs, expect the company to petition the court to furlough all groups out of seniority by position/base, not provide severance pay, or J4J opportunities.
Late today the ALPA MEC unanimously passed a resolution directing the NC to obtain a TA and there are no restrictions on the potentail agreement contents. The company is expected to file its S.1113(e) motion as early as tomorrow and the proposed contract terms will be made public. There is one narrow opportunity still available for every union to obtain a TA, but the window is almost closed.
Regards,
USA320Pilot
