Bankruptcy Coming?
- Thread starter USA320Pilot
- Start date
Yep, yep, yep. US is, unfortunately, one of those fairly rare birds in business where the whole is worth less than the sum of its parts. Thus, maximizing shareholder value comes from divesting the parts and shutting down the whole.ELP_WN_Psgr said:
It ain't pretty, but it seems like the most likely path.
Which brings up an interesting question. With Independence popping up, and Mesa taking this sort of growth path, what does the end-game look like for these regionals? Are they the next sleepers to change the face of commercial aviation? Anyone know what, if anything, is going on over at SkyWest?
OP
USA320Pilot
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- May 18, 2003
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EyeInTheSky said: “Avek00, what's going to happen is going to happen. All the paycuts and productivity changes won't change the fact that this airline is again headed for Chapter 11 bankruptcy protection. I can guarantee you this time it's going to look like the Texas Chainsaw Masacre. UGLY!â€
Avek00 said: “I beg to differ. IMHO, while US will not be around for the long haul, another round of concessions combined with a new business plan could absolutley keep the airline afloat until a merger or sale can be brokered a few years down the road.â€
USFlyer said: “My take is a merger is still in US's future and quite honestly best interests. Downsizing PIT and rebuilding a point to point network along the east coast makes US an even more attractive merger partner, in my opinion. If Lakefield's business plan is what I believe it to be, US's network one year from now would fit nicely into several other carrier's respective networks without requiring a lot of rework in a merger.â€
USA320Pilot comments: I strongly agree with Avek00 and USFlyer’s comments. US Airways new business plan makes it a much, much more attractive for M&A activity. The company’s operational and labor cost targets would permit stand-alone operations that are profitable with a CASM of about 7.5 cents (with a fuel cost of about 90 cents per gallon).
In addition, the elimination of the Pittsburgh hub and focus on increasing flying out of Boston, New York, Philadelphia, Washington, and Charlotte would create a network more easily integrated into a broader business enterprise.
With a competitive cost structure and most of the network restructured with Philadelphia transatlantic flights to 15 markets, the largest number of Caribbean destinations of any U.S. carrier, a re-focused East Coast network with more point-to-point and RJ flying, global reach provided by the Star alliance; coupled with a competitive cost structure, US Airways would become an attractive merger partner.
The challenge: No U.S. airline has the resources to buy US Airways, thus, the only way the company would combine with another airline would be for a venture capitalist to step in to provide the financing. Investor’s who have publicly expressed interest in US Airways and a future partner has been RSA and TPG. Will it occur?
Maybe, maybe not. But, I have been told by senior management that if the company restructures the airline will be involved in M&A activity.
Respectfully,
USA320Pilot
Avek00 said: “I beg to differ. IMHO, while US will not be around for the long haul, another round of concessions combined with a new business plan could absolutley keep the airline afloat until a merger or sale can be brokered a few years down the road.â€
USFlyer said: “My take is a merger is still in US's future and quite honestly best interests. Downsizing PIT and rebuilding a point to point network along the east coast makes US an even more attractive merger partner, in my opinion. If Lakefield's business plan is what I believe it to be, US's network one year from now would fit nicely into several other carrier's respective networks without requiring a lot of rework in a merger.â€
USA320Pilot comments: I strongly agree with Avek00 and USFlyer’s comments. US Airways new business plan makes it a much, much more attractive for M&A activity. The company’s operational and labor cost targets would permit stand-alone operations that are profitable with a CASM of about 7.5 cents (with a fuel cost of about 90 cents per gallon).
In addition, the elimination of the Pittsburgh hub and focus on increasing flying out of Boston, New York, Philadelphia, Washington, and Charlotte would create a network more easily integrated into a broader business enterprise.
With a competitive cost structure and most of the network restructured with Philadelphia transatlantic flights to 15 markets, the largest number of Caribbean destinations of any U.S. carrier, a re-focused East Coast network with more point-to-point and RJ flying, global reach provided by the Star alliance; coupled with a competitive cost structure, US Airways would become an attractive merger partner.
The challenge: No U.S. airline has the resources to buy US Airways, thus, the only way the company would combine with another airline would be for a venture capitalist to step in to provide the financing. Investor’s who have publicly expressed interest in US Airways and a future partner has been RSA and TPG. Will it occur?
Maybe, maybe not. But, I have been told by senior management that if the company restructures the airline will be involved in M&A activity.
Respectfully,
USA320Pilot
ELP_WN_Psgr
Senior
- Nov 29, 2003
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- 0
Actually, there is an airline out there that has the wherewithal to buy USAirways, lock, stock, and barrel.....and basically do it from petty cash......but they have better sense.
And why on Earth would you listen to anyone from senior management? They are the people whose vision, or lack thereof, got you into the mess you are currently in.
Just a few thoughts from the desert. Wishing everyone a safe & happy Memorial Day holiday...join me in keeping in mind why we have it for a holiday.
E-Trons:E-TRONS said:Sing along with me.....(ode to USA320PILOT)
"He's a real nowhere man.....sitting in his nowhere land......spewing all his nowhere plans for everybody...."
Do you really think this is an appropriate time to
make jokes about a very serious situation? The
scope of the changes that must happen to keep
US Airways going past September are huge and
A320 is only trying to provide information that is
available through many news sources so that
the terribly misinformed union employees can
make an informed decision when the time comes.
The future of US Airways is now. Decisions must
be made quickly and consensually, or as A320
has warned, they will be made through the
judicial system and a lot of employees will be
scratching their heads and wondering why they
were not given the opportunity to save their
jobs (and homes, cars, and medical insurance)
rather than wondering if they will make enough
on unemployment to bridge the gap until they
find another job.
IMO, it will not be a case of one airline buying all of US. It will be a case where one airline does end up with part of US and others (perhaps several?) end up in the buying mode to keep the balance of power. Some pieces of US may in fact be bought simply so they don't fall into the wrong hands.mweiss said:
And IMO any sale of assets will come once US has gone into chap. (7?, 11?) BK and will be directed from Alabama as a fire-sale (and not as the result of any merger or sale driven or orchestrated from CCY).
SpinDoc wrote:
E-Trons:
"Do you really think this is an appropriate time to
make jokes about a very serious situation?"
Yes, I think its joke. This is a total joke of a management team who blew two consecutive concessions.
Joke that people left millionaires while the company goes down the drain.
Joke that poster like you are still thinking there is a glimmer of hope; yes that's real laugh.
"The scope of the changes that must happen to keep
US Airways going past September are huge and
A320 is only trying to provide information that is
available through many news sources so that
the terribly misinformed union employees can
make an informed decision when the time comes."
Now it's this guys job to do what the union leadership can't do, now a self-appointed mastermind of the airline industry must wake up the brainless union membership, another joke.
"The future of US Airways is now. Decisions must
be made quickly and consensually, or as A320
has warned, they will be made through the
judicial system and a lot of employees will be
scratching their heads and wondering why they
were not given the opportunity to save their
jobs (and homes, cars, and medical insurance)
rather than wondering if they will make enough
on unemployment to bridge the gap until they
find another job."
Every employee who can think rationally realizes what's at stake. I have a big news flash for you: This company is going to fail unless divine intervention comes forth very fast. This management does NOT have the power of it's labor force behind it, they simply don't, you know it, I know it and anyone who thinks otherwise is deluding themselves. When employees are only worried about whether they receive severance or a pension, this is a pretty clear sign of the things to come. All you posters including the captain are posting desperate cries in the wilderness and no one can hear you. We are fast becoming the next Eastern and all others that have failed.
Remember, when labor is not behind its company, there is no company.
And like the good captain is famous for saying: Do I like it, nope, but that’s reality.
E-Trons:
"Do you really think this is an appropriate time to
make jokes about a very serious situation?"
Yes, I think its joke. This is a total joke of a management team who blew two consecutive concessions.
Joke that people left millionaires while the company goes down the drain.
Joke that poster like you are still thinking there is a glimmer of hope; yes that's real laugh.
"The scope of the changes that must happen to keep
US Airways going past September are huge and
A320 is only trying to provide information that is
available through many news sources so that
the terribly misinformed union employees can
make an informed decision when the time comes."
Now it's this guys job to do what the union leadership can't do, now a self-appointed mastermind of the airline industry must wake up the brainless union membership, another joke.
"The future of US Airways is now. Decisions must
be made quickly and consensually, or as A320
has warned, they will be made through the
judicial system and a lot of employees will be
scratching their heads and wondering why they
were not given the opportunity to save their
jobs (and homes, cars, and medical insurance)
rather than wondering if they will make enough
on unemployment to bridge the gap until they
find another job."
Every employee who can think rationally realizes what's at stake. I have a big news flash for you: This company is going to fail unless divine intervention comes forth very fast. This management does NOT have the power of it's labor force behind it, they simply don't, you know it, I know it and anyone who thinks otherwise is deluding themselves. When employees are only worried about whether they receive severance or a pension, this is a pretty clear sign of the things to come. All you posters including the captain are posting desperate cries in the wilderness and no one can hear you. We are fast becoming the next Eastern and all others that have failed.
Remember, when labor is not behind its company, there is no company.
And like the good captain is famous for saying: Do I like it, nope, but that’s reality.
OP
USA320Pilot
Veteran
- May 18, 2003
- 8,175
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Mweiss:
Mweiss asked: Why would anyone want to buy the whole thing including the unwanted workforce when they can wait it out and get the valuable assets, minus the liabilities, soon enough anyway?
USA320Pilot comments: If US Airways has a competitive cost structure and is a viable on-going concern, then the company is worth more with its work force in place with a turn key operation. If the company does not have a competitive cost structure in place, then the company could liquidate. With the exception of Southwest, who likely will not enter the M&A game, there is no airline that has the resources to participate in consolidation. Therefore, the money would have to come from an equity investor who is a venture capitalist. Finally, a turn key operation with a competitive cost structure could change the way airline’s do business and be financially successful when combined with another business entity.
In my opinion, there will be new labor deals from a majority of the unions and then the company will file for bankruptcy. The company has already hired its bankruptcy advisors and then they will likely S.1113 any union who does not participate. Will it end up going to Chapter 7? Maybe, maybe not. Will there be consolidation? Probably.
Regards,
USA320Pilot
Mweiss asked: Why would anyone want to buy the whole thing including the unwanted workforce when they can wait it out and get the valuable assets, minus the liabilities, soon enough anyway?
USA320Pilot comments: If US Airways has a competitive cost structure and is a viable on-going concern, then the company is worth more with its work force in place with a turn key operation. If the company does not have a competitive cost structure in place, then the company could liquidate. With the exception of Southwest, who likely will not enter the M&A game, there is no airline that has the resources to participate in consolidation. Therefore, the money would have to come from an equity investor who is a venture capitalist. Finally, a turn key operation with a competitive cost structure could change the way airline’s do business and be financially successful when combined with another business entity.
In my opinion, there will be new labor deals from a majority of the unions and then the company will file for bankruptcy. The company has already hired its bankruptcy advisors and then they will likely S.1113 any union who does not participate. Will it end up going to Chapter 7? Maybe, maybe not. Will there be consolidation? Probably.
Regards,
USA320Pilot
EyeInTheSky
Veteran
IT's time for everyone to step out of fantasy merger land. Like I said, Texas Chainsaw Masacre...stealing a car and selling the parts...whatever you want to call it, it's going to be fugly.
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
- 37
If the company attempts to S1113 IAM-M or AFA, there is your Chapter 7 filing.USA320Pilot said:
Humor is good for the heartSpinDoc said:
I do not dispute your reasoning. However, I do disagree with your hope of UAIR continuing on as an airline.
FYI: Concessions have NEVER-EVER saved a single airline. It's a ruse.
This company is headed back to bankruptcy court. I stand firm with the belief that Bronner had this planned all along. Seigel got the boot because he screwed up the way it was supposed to go during BK#1. Now we have a new CEO but I must warn you....beware of false prophets. Same song different singer.
If management was serious about running a good company then they would be changing all aspects of the company....not just the pay & benefits portion. But they have not and continue to dilly-dally around like everything is alright. Can't you see that??
The fork is already in us.....now they just have to turn us over
!!My sympathies at all UAIR employees.
It is starting to look like UAIR will be pushing for chap 11 again this fall/winter; probably followed shortly thereafter by chap 7.
It would be in UAIR's best interests to wait until UAL emerges from chap 11; they should have a bit extra cash on hand to bid up UAIR's assets.
How do I expect this to go down? UAL will try to pick up as many gates and slots as possible for PHL, LGA, and BOS as they can reasonably get.
There will be a food fight over DCA gates/slots. This will probably be the most valuable piece of UAIR.
As for the aircraft, I'd expect them to be returned to the lessors; there are plenty of good used aircraft out there for sale that it won't be a problem for any airline to lease non-UAIR equipment to fly those routes. This will pretty much wipe out UAIR ALPA's fragmentation clause. For those very senior pilots, they'll find a way to get onto an acquiring airline's seniority list. But it will be very few.
In another post, USA320pilot stated that he expected an acquirer to take most of UAIR's employees due to the training time required. The only labor group that I can see where this would be an issue is with the pilots. However, with so many pilots on furlough at other airlines, it wouldn't take any acquirer very long to have trained pilots in place on the equipment of the acquirer's choosing (read this as MadDogs, Triple7s, Fokkers, and anything else that the company currently flies).
So why does USA320pilot keep posting here, urging UAIR employees to take pay cuts? Because he is acting in his own self-interest. If UAIR fragments, USA320pilot will end up not having a job, since he is, IIRC, a junior 320 FO after all of the displacement bids. I think that he's hoping that UAIR can turn around and be bought down the road by a single airline as a package deal, with all of UAIR's employees being guaranteed employment at the new company.
I know that I've offended some UAIR employees, but UAIR's survival is highly doubtful. Keep your resumes updated.
It is starting to look like UAIR will be pushing for chap 11 again this fall/winter; probably followed shortly thereafter by chap 7.
It would be in UAIR's best interests to wait until UAL emerges from chap 11; they should have a bit extra cash on hand to bid up UAIR's assets.
How do I expect this to go down? UAL will try to pick up as many gates and slots as possible for PHL, LGA, and BOS as they can reasonably get.
There will be a food fight over DCA gates/slots. This will probably be the most valuable piece of UAIR.
As for the aircraft, I'd expect them to be returned to the lessors; there are plenty of good used aircraft out there for sale that it won't be a problem for any airline to lease non-UAIR equipment to fly those routes. This will pretty much wipe out UAIR ALPA's fragmentation clause. For those very senior pilots, they'll find a way to get onto an acquiring airline's seniority list. But it will be very few.
In another post, USA320pilot stated that he expected an acquirer to take most of UAIR's employees due to the training time required. The only labor group that I can see where this would be an issue is with the pilots. However, with so many pilots on furlough at other airlines, it wouldn't take any acquirer very long to have trained pilots in place on the equipment of the acquirer's choosing (read this as MadDogs, Triple7s, Fokkers, and anything else that the company currently flies).
So why does USA320pilot keep posting here, urging UAIR employees to take pay cuts? Because he is acting in his own self-interest. If UAIR fragments, USA320pilot will end up not having a job, since he is, IIRC, a junior 320 FO after all of the displacement bids. I think that he's hoping that UAIR can turn around and be bought down the road by a single airline as a package deal, with all of UAIR's employees being guaranteed employment at the new company.
I know that I've offended some UAIR employees, but UAIR's survival is highly doubtful. Keep your resumes updated.
