Bronner Tells Usa Today Bankruptcy Could Occur

[ITRADE]

What is US Airways YTD profit?

 

[767jetz]

USA320pilot,

Once again you completely ignored the simple basic question from my previous post, and instead chose to engage in a pi$$ing contest. You are SOOOOOOO predictable.

I will not debate the issue with you either, because the only things you have to offer amounts to "woulda' - shoulda' - coulda'" while you throw threats at your fellow employees and try to ram your unique perspective down everyone else's throat.

The bottom line is that none of your predictions, that you once claimed to know as fact on good authority, have become reality. Here you sit with no pension and your company within weeks of being in CH11 again, yet you still spew your bitter selfserving propaganda at the world.

So I will ask you once again for the benefit of the good folks of USAirways...
If UA is in violation of the law (as you claim) by defferring payments to the pension plans while in CH11, how does it benefit US Airways to file for CH11 to avoid the same payments? Are you saying that US will engage in illegal action once in CH11? If so, why not just break the law and avoid CH11?

Your argument makes no sense.

 

[enilria]

The company is required to make $110 million in DB pension plan payments to the AFA and IAM on September 15, however, if the filing occurs on Sunday, September 12 the company would not be forced to fund the IAM and AFA pensions.

The argument against this date is that according to the August 4 SEC 10Q filing the company will not default on the potential loss of financing for new regional jets, violation of debt covenants and significant collateralization events under certain credit card processing agreements" until September 30.

Respectfully,

USA320Pilot

[post="167117"][/post]​

It's pretty common for a company to mislead as to the date they would file for chapter 11 since involuntary bankrupcy (which can happen if the creditors get to court first) opens up another can of worms. It is quite likely that they would want to file before the "official date" of 9/30 as a result.

 

[enilria]

Call me ignorant, but how does a profitable company go into bankruptcy.

[post="167210"][/post]​

Actually, profitable companies have gone into chapter 11 before, particularly after losing gigantic lawsuits.

Of course, US Airways is not a profitable company so that's irrelevant here. One quarter of profits preceded and followed by numerous quarters of losses does not define profitability.

I guess if you believe Southwest's growing operation in Philadelphia and IAir's bloodbath at Dulles will have no added negative impact on US Airways and you essentially choose to stick your head in the sand then things are rosy.

If things were really solved now after one quarter of profits then investors would be lined up to give US Airways hundreds of millions in new capital, but I can't see a queue forming from my vantage point.

 

[funguy2]

Iwould like to know WHY the company did not make 2003 pension contribution , which placed the payments in the "rears", when they had $1 billion dollars in Guarantee money.

If they can't spend the money, why borrow the money in the first place?????
And don't give me a line of BS. Either answer these questions with some validity, or don't answer at all!

[post="167129"][/post]​

The term is "in arrears":

Main Entry: ar·rear
Pronunciation: &-'rir
Function: noun
Etymology: Middle English arrere behind, backward, from Middle French, from (assumed) Vulgar Latin ad retro backward, from Latin ad to + retro backward, behind -- more at AT, RETRO-
1 : the state of being behind in the discharge of obligations -- usually used in plural <in arrears with the rent>
2 a : an unfinished duty -- usually used in plural <arrears of work that have piled up> b : an unpaid and overdue debt -- usually used in plural <paying off the arrears of the past several months>

- Merriam-Webster online dictionary.

On the subject of why borrow if you cannot spend: Airlines are a cash intensive industry. Think of US Airways bank account as a bucket with a hole in the bottom... Revenue cash gets poured in the top, and expenditure cash (i.e. wages, fuel, etc) go out of the hole at the bottom of the bucket... When the bucket fills up (assuming that more cash is poured in than can flow out of the hole at the bottom), investors get to take come cash out of the bucket in profits...

Well, in US Airways' case, the hole in the bucket got larger, and less cash is being poured in the top, thus the water level is dropping... Now, US Airways must borrow money in order to keep the water level up, which means they cannot "spend" it... Otherwise, eventually the money being poured in the top will immidiately flow out the bottom, and there won't be enough to flow out the bottom to pay the basic bills (fuel, labor). So that's my illustration why they borrow money but cannot spend it... Its a safety cushion to avoid running dry while they try to fix things...

 

[funguy2]

767jetz:

I'm not going to waste my time with your nonsense because Bronner said four times in press that he wanted to buy United assets and Susan Carey reported that US Airways rushed to get out of bankruptcy to buy United assets, but that SARS and the Iraqi War ended to fast.

Nonetheless, that's water over the damn, but yout "jab" about US Airways liquidating is interesting. It appears that US Airways has a new business plan and ATSB support. Furthermore, the ATSB's auditor recently told the news media he believes the creditors will support another Chapter 11 restructuring.

Bill Warlick, an analyst with Fitch Investors Service and the ATSB's loan guarantee application auditor, who I understand recommended the Board approve US Airways' application and reject United's application, told the Charlotte Business Journal, "The threat of bankruptcy (for US Airways) is more real now. There is a pretty good chance that (creditors) will take some action by October if the company doesn't meet those (ATSB) covenants."

In any event, analysts agree a second Chapter 11 filing would not necessarily be a disaster. Mike Boyd notes Continental Airlines Inc. went through that ringer twice and is doing well. And Warlick thinks US Airways has sufficient liquidity that its creditors would not force liquidation of the company. "I think they will be given a shot at restructuring again," he says.

Once again, I "want" to buy a Porche... I can even go and tell the USA Today and ALPA I want to buy a Porche... But that doesn't mean it will ever happen.

And who was it on this board who predicted something happening in October? Hmmmm. And it was done with an objective analysis based on publicly available facts.

I would not be so quick to point out that UAIR can follow CAL's BK case. CAL had some assets (i.e. sustainable hubs, Air Micronesia, etc) and a smart and motivated management team. UAIR doesn't have as much head-way as CAL did back in the day.

 

[Cosmo]

... Bronner said four times in press that he wanted to buy United assets and Susan Carey reported that US Airways rushed to get out of bankruptcy to buy United assets, but that SARS and the Iraqi War ended to fast.

USA320Pilot:

You've got it wrong yet again! We've gone over this several times in recent months, but I guess it hasn't sunk in. So, to repeat, this was my exact response to you (on May 17, 2004, in the "Industry Consolidation" thread) regarding why US Airways REALLY exited Chapter 11 on March 31, 2003 --

QUOTE(USA320Pilot @ May 15 2004, 05:44 AM)
As recently stated by Dow Jones Newswires, the reason David Bronner and Dave Siegel exited bankruptcy so early was their interest in US Airways acquiring United Airlines or many of its assets, which Bronner publicly commented on in four separate interviews, but that did not happen due to deteriorating fundamentals.

USA320Pilot:

That's nothing more than revisionist history!

US Airways exited Chapter 11 on March 31, 2003, for one reason and one reason only: The agreement between the carrier and its pre-bankruptcy credit card transaction processor expired by its terms on that date, and no other processor would agree to perform that function for US Airways while it was still in bankruptcy proceedings. And without such a processor and, more importantly, the cash flow generated by the credit card transactions, US Airways would have totally run out of cash within a matter of weeks and quickly entered Chapter 7 proceedings.

No amount of "spin" about a possible merger with United, whether it was talked about by the two companies or not, will change that reality.

Perhaps now you will stop spreading this fabrication? Or to use your tortured syntax, when would now be a good time to stop spreading this fabrication?

 

[Doc]

PITBull, HP_FA, & PineyBob:

PITBull, I understand your frustration and the pension fight is not with me, it's with the Bush Administration and in particular Andrew Card and John Snow. In regard to my DC Plan payments, that is private information. Let me say this, the pilot group gave up 50 to 70% of its DB pension, which was the last major hurdle to get out of bankruptcy 17 months ago. Furthermore, ALPA is likely to see further pension cuts this go-around.

HP_FA, I believe the company, the ATSB, and the major creditors are all working together and PITBull's thought on this subject is accurate.

PineyBob, just like with your Mack Truck theory, you're on to something with the Airbus heavy maintenance ruling, but you need to adjust your thoughts a little bit.

Respectfully,

USA320Pilot

[post="167132"][/post]​

Oh my so you gave up 50% to 70% of you pension...You have got to be kidding me most of us have none to give up.....And if you don't have money in the bank after the cash you guys were pulling in well shame on you.....but I'm sure your all taken care of ...right...so your just worried about my.... J.O.B.
So I'm supposed to vote yes just for me...I bet if there is a vote in the CWA it will be a big..........

NOOOOOOOOOOOOOOOOOOOOO

 

[Cosmo]

USA320Pilot:

And if you don't believe me, perhaps the following paragraph from page 42 of US Airways' SEC Form 10-K for the year ended December 31, 2002 (which was filed on March 27, 2003), will clarify the issue for you:

US Airways utilizes third party service providers to process credit card transactions. As a result of the Chapter 11 filing, these providers have required additional cash collateral to minimize their exposure. If US Airways fails to meet certain financial or nonfinancial covenants, these providers can (i) require additional cash collateral or additional discretionary amounts upon the occurrence of certain events; and (ii) under certain circumstances, terminate such credit card processing agreements. US Airways has received proposals from and is in negotiations with potential credit card processors for Visa and MasterCard transactions, once US Airways emerges from Chapter 11 bankruptcy protection and transitions its current relationship with National Processing Corporation (NPC), a division of National City Bank of Cleveland. US Airways currently has an agreement with NPC which expires March 31, 2003, but which provides for a 45-day extension if a series of milestones are met. Specifically, the 45-day extension with NPC requires that the Company have a confirmed plan of reorganization and a new credit card processing agreement in place by March 31, 2003. The Company then has to substantially complete the plan and close on the ATSB Loan by April 15, 2003, allowing for an extension of the NPC agreement until May 15, 2003. Assuming these conditions are met, US Airways would expect to transition to its new processor in late April or early May. However, there can be no assurance that the current contract can be extended beyond March 31, 2003, if US Airways does not execute an agreement with a new processor by this date. The termination of credit card processing agreements could have a material adverse effect on the Company’s liquidity, financial condition and results of operations.

Is that clear enough for you? Do you now understand that neither Bronner's quoted "desires" to acquire United assets nor the supposed "facts" in Susan Carey's WSJ article had any impact on the absolutely imperative need for US Airways to exit Chapter 11 by no later than March 31, 2003, with the only real alternative being the carrier's imminent (at that time) liquidation?

 

[RowUnderDCA]

ok both of you cite evidence to bolster your points, but neither of you really refute the other's point, so can you give it a rest, please?

 

[enilria]

I don't doubt that at some point US Airways analyzed buying the assets of United, just like they analyzed buying the assets of TWA, Midway, PSA, Piedmont, etc.; but at this point US doesn't have two nickels to rub together so who cares what might have happend? The reality is that United is now in better shape than US Airways, although not by that much.

I think I would have to be content with the decreasing possibility of US surviving rather than focusing on delusions of future grandeur that is getting less and less likely.

By the way, it seems inevitable that the company will file for Chapter 11 again and at that point you can probably wave goodbye to Mr. Bronner because the ATSB is going to wipe out his equity in their desperate attempt to recover my (and the other taxpayer's) money!!!

 

[700UW]

There is no taxpayer's money in the loan, the loan was given to US Airways by private banks and the RSA. The loan is guaranted by the ATSB in case of default, but it is also collateralized with enough of US Airways' assets to pay it off in case of a default.

 

[USA320Pilot]

My primary concern is for US Airways and its employees and I find it interesting how some United employees frequent the US Airways board and post their “uninformed jabsâ€￾. Throughout the years the two companies have attempted two mergers, negotiated the alliance, and held UCT, & ICT discussions.

In fact, US Airways management and analysts have discussed these combinations as well. Did they occur? No, and I always qualified my posts. Nonetheless, they parties attempted to complete transactions more than once and may do so in the future.

In my opinion, the industry will consolidate and with today’s fundamentals, nobody can predict what will happen.

Separately, from a personal perspective, it appears US Airways has a plan to transform itself that may be distasteful to some employees, and on the other hand it appears United has no long-term plan, no exit financing, no equity plan sponsor, no loan guarantee, pension lawsuits, and no POR. Therefore, before the United employees talk more “pot shotsâ€￾ maybe they should look in the mirror.

Respectfully,

USA320Pilot

 

[700UW]

My primary concern is for US Airways and its employees and I find it interesting how some United employees frequent the US Airways board and post their “uninformed jabsâ€￾. Throughout the years the two companies have attempted two mergers, negotiated the alliance, and held UCT, & ICT discussions.

In fact, US Airways management and analysts have discussed these combinations as well. Did they occur? No, and I always qualified my posts. Nonetheless, they parties attempted to complete transactions more than once and may do so in the future.

In my opinion, the industry will consolidate and with today’s fundamentals, nobody can predict what will happen.

Separately, from a personal perspective, it appears US Airways has a plan to transform itself that may be distasteful to some employees, and on the other hand it appears United has no long-term plan, no exit financing, no equity plan sponsor, no loan guarantee, pension lawsuits, and no POR. Therefore, before the United employees talk more “pot shotsâ€￾ maybe they should look in the mirror.

Respectfully,

USA320Pilot

[post="167360"][/post]​

Yea ok, if you care about the US Airways employees why do you post the following:

False facts
Threats
Initimdating statements

Why are you obsessed with the IAM and its stance?

And you have instigated the UAL people coming over here and US has no plan except to pillage the employees paychecks and benefits.

 

[USA320Pilot]

As I now understand it, US Airways and its advisors from the Seabury Group, Arnold & Porter, and FTI Consulting have been working on a pre-packaged bankruptcy filing, which could take as little as 120-days for the company to file its Plan of Reorganization (POR). Much of the work is complete and is contained in the "Transformation Plan". The POR will detail that the security will reamin in place, the company would remain the debtor-in-possession (DIP), there would be no DIP financing required, and the ATSB would agree to the filing. Upon emergence there would be another stock offering for RSA who would remain in control of the company.

The pre-packaged plan has facility, airport leases, and labor contracts in the “cross-hairsâ€￾, which could make it extremely important for the union’s to strike new labor accords and obtain S.1113 protection.

As David Bronner told the USA Today, the filing could occur in mid-September, presumably September 12, which would be a voluntary filing coordinated with the ATSB.

I believe it’s significant to note that Bill Warlick of Fitch Rating and the head of the Board's loan guarantee application auditors, told the Charlotte Business Journal last week, "The threat of (US Airways) bankruptcy is more real now. There is a pretty good chance that (creditors) will take some action by October if the company doesn't meet those covenants." In any event, the analysts agree a second Chapter 11 filing would not necessarily be a disaster.

Airline analyst Mike Boyd notes Continental Airlines Inc. went through that ringer twice and is doing well. And Warlick thinks US Airways has sufficient liquidity that its creditors would not force liquidation of the company. "I think they will be given a shot at restructuring again," he says.

From this observer’s perch, why would the ATSB’s financial auditor have made these comments and whom has he been talking to?

Respectfully,

USA320Pilot