Creditors Committee Named

[700UW]

EDS, GE on US Airways creditor committee
Mon Sep 20, 2004 08:40 PM ET
WASHINGTON, Sept 20 (Reuters) - General Electric Co. (GE.N: Quote, Profile, Research) , Electronic Data Systems Corp. (EDS.N: Quote, Profile, Research) and leading unions were among those named on Monday to the committee of unsecured creditors in the US Airways (UAIRQ.O: Quote, Profile, Research) bankruptcy case, a source close to the case said.

Click here for story

 

[USA320Pilot]

MEC CODE-A-PHONE UPDATE - September 20, 2004

This is Jack Stephan with a US Airways MEC update for Monday, September 20th, with one new item:

Today, ALPA was appointed to the 13-member Unsecured Creditors’ Committee, which represents the US Airways creditors’ interests during Chapter 11 bankruptcy. It is composed of representatives from the Company’s largest unsecured creditors, with each committee member having one vote. MEC Chairman Bill Pollock has appointed MEC Vice Chairman Kim Snider as ALPA’s Unsecured Creditors’ Committee representative.

Other organizations with a representative appointed to the Committee include Airbus, the AFA, Bombardier, the CWA, Electronic Data Systems Corp., General Electric Co., the IAM, the PBGC, Sabre Holdings Corp., U.S. Bank, Wachovia Corp. and LSG Skychefs.

Please remember we have 1,879 pilots on furlough.

Thank you for listening.

USA320Pilot comments: From this observer's perch, Bill's appointment of Kim is good news. Kim is a respected and experienced ALPA official who approaches business with a balanced approach.

Respectfully,

USA320Pilot

 

[delldude]

this is all well and wonderful....but unsecured creditors???what have they to gain...in essence,we are all unsecured creditors...who stand to lose all and get in line AFTER the secured creditors .....
what do the secured creditors have to say about our dilema...thats who has the leverage now.....please tell me.. :mf_boff: :mf_boff: :mf_boff:

 

[Justme]

Unsecured creditors committee is expected to push in court for US Airways' survival
TONY MECIA
Staff Writer
US Airways gained an ally in bankruptcy court Monday, with the formation of a creditors committee that seems inclined to support the airline's efforts to keep flying.

"We very much would like to see US Airways come out of bankruptcy protection, carry on being an airline and allow us to resume deliveries," said John Paul Macdonald, spokesman for Montreal-based Bombardier Aerospace, a member of the committee. Bombardier is scheduled to deliver 25 regional jets to US Airways in the coming years and is owed $948 million as part of that agreement, according to court filings.

Panel will likely want airline aloft (Requires Registration)

 

[USA320Pilot]

Yesterday the US Airways unsecured creditors committee was formed and US Airways briefed the group on the company’s business plan. It’s unclear what was discussed, but according to the Charlotte Observer, "These are challenging times and we have a challenge ahead of us," US Airways Chief Executive Bruce Lakefield said, addressing a gathering of about 150 creditors and lawyers in a hotel ballroom in Arlington, Va., where US Airways is based. Dealing with labor costs is "extremely painful," said Lakefield, according to Bloomberg News. He said negotiations are ongoing with the company's unions and US Airways is prepared to ask a bankruptcy judge to allow it to cancel labor contracts and restructure obligations to retirees if necessary.

US Airways gained an ally in bankruptcy court Monday, with the formation of a creditors committee that seems inclined to support the airline's efforts to keep flying, the Observer noted.

It is my understanding that the new business plan has two options: the “Transformation Plan†with approximately 280-mainline aircraft with a network carrier/LCC hybrid business model and a second plan with 150-aircraft that eliminates European flying and focuses on East Coast point-to-point flying the mimic JetBlue Airways. The network carrier/LCC hybrid business plan provides a 4% profit margin and the 150 aircraft plan provides a 8% profit margin.

US Airways’ September 10 proposal to ALPA eliminated much of the scope protection with elimination of fragmentation protection, contingent acquisition rights, the 279 minimum fleet count, and no furloughs due to productivity improvements.

US Airways’ September 20 proposal to ALPA rescinded all previous proposals and created more givebacks, which are now reportedly being required by the ATSB and the creditor’s committee. US Airways costs are increasing in bankruptcy to pay its advisors, guaranteed loan interest, and ATSB investment banker fees.

The September 20 proposal to ALPA increases the pay cut from 16.5% to 19.5%, reduces vacation from 42 to 21 days, and has further erosion of scope including out of seniority furloughs, no severance pay, and no displacement rights or bumping at MDA.

If the company is forced to implement the 150-aircraft mainline fleet plan by the creditor’s due to labor not voluntarily participating in the new business plan, it’s unclear what 150-aircraft could be kept. However, one idea would be to keep the A320 family and B757 aircraft. This could permit the furlough of all A330, B767, and B737 pilot’s; as well as permanently furlough or terminate all F/A’s on voluntary furlough.

Also noteworthy, US Airways then could take delivery of A322, A321, A320 aircraft to replace the B757s and go to one fleet type, which could eliminate virtually all of the maintenance department and create significant economies of scale.

If these two fleet types remain, this would permit the company to close the B737 overhaul facility in PIT, the CLT A330 heavy maintenance line, the Pittsburgh Reservations facility, and furlough these employee groups out of seniority too.

In regard to ALPA’s RC4 both Philadelphia Reps would be furloughed and the Pittsburgh Reps could be neutered as the base is reduced to about 200 pilots.

The company’s last proposal to ALPA was provided to the MEC chairman because there are no negotiations occurring between the Negotiating Committee and the Company. The parties are preparing for the anticipated S.1113(e) filing with the new proposal to the pilot's the basis for the company’s motion. It is expected that other unions will get similar proposals that further cut pay and benefits in response to ATSB demands.

The ALPA MEC is scheduled to reconvene today in Charlotte where these events will be addressed by the MEC.

When would now be a good time for all of the unions to reach consensual labor accords to possibly prevent the 150-aircraft plan to be implemented – that the creditors believe would provide US Airways with a higher profit margin? Separately, ALPA's advisors have predicted that every company proposal would get worse, which keeps occurring. Is the company's latest proposal to ALPA a "Club" to finally get the RC4's attention or is it the precursor to the 150-aircraft point-to-point flying mainline fleet plan?

Regards,

USA320Pilot

 

[NeedForSpeedNFS]

Yesterday the US Airways unsecured creditors committee was formed and US Airways briefed the group on the company’s business plan.

When would now be a good time for all of the unions to reach consensual labor accords to possibly prevent the 150-aircraft plan to be implemented – that the creditors believe would provide US Airways with a higher profit margin?

Regards,

USA320Pilot

[post="182608"][/post]​

320, reduced your post for clarity.... Your last section says it all!!!! Creditors hold the keys!! NOT the unions, NOT the employees!!!! The CREDITORS believe the 150 plan would provide a HIGHER PROFIT MARGIN!!!!! DUH!!!! What good is negotiations going to do????? I know you hate this......... but, SHUT IT DOWN!!!! GOOD DAY!!!!

 

[USA320Pilot]

Two more points...

With the Pittsburgh reductions, those employees could be furloughed out of seniority.

When would now be a good time for the union's to seek consensual agreements to limit damage?

Regards,

USA320Pilot

 

[delldude]

limit the damage?? lets blow the friggin keel outa this boat dude!

 

[USFlyer]

Well, let's see, if management truly implements a point to point network -- which many have said is the right business model to use -- yet this results in basically tearing up the existing airline, I'm curious what everyone will then complain about. Siegel warned a year ago that truly changing to a point to point network would require parking planes and furloughing large numbers of employees, yet everyone brushed his remarks aside.

 

[delldude]

However, one idea would be to keep the A320 family and B757 aircraft.

wonder what pilot fly's these aircraft??

 

[RowUnderDCA]

Well, let's see, if management truly implements a point to point network -- which many have said is the right business model to use -- yet this results in basically tearing up the existing airline, I'm curious what everyone will then complain about. Siegel warned a year ago that truly changing to a point to point network would require parking planes and furloughing large numbers of employees, yet everyone brushed his remarks aside.

[post="182623"][/post]​

I remember that clearly.... that's what Siegel decided NOT to do, because it was too hard.

 

[USFlyer]

I remember that clearly.... that's what Siegel decided NOT to do, because it was too hard.

[post="182629"][/post]​

Correct, but now it may just happen.

 

[jack mama]

i like the hybrid model, with some feed to/from europe with star...i don't like the 150 model with only point to point east coast flying...might as well change the name to mid atlantic..and kill mainline.

a good mix of all three is the ticket...

 

[RowUnderDCA]

Correct, but now it may just happen.

[post="182631"][/post]​

I wonder if this is really the 'virgin/US' option.

 

[USA320Pilot]

In my opinion, the union's will have one last chance to agree to participate in the "LCC/Hybrid Transformation Plan" with about 279 mainline aircraft and that window is between today and the first S.1113(e) hearing.

Time is very, very short.

Regards,

USA320Pilot