Dave Porks Pittsburgh?

[MrAeroMan]

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On 4/3/2003 826 PM PineyBob wrote:


Couple of thoughts,

US Airways is perfectly within its legal rights to not affirm the leases for PIT.

People need to separate emotion form the cold hard reality of modern business. PIT has a pool of money to negotiate over, Dave is gonna do his best to get all of that 70 Million from the airport authority.

Where else can Dave attack a pool of money that big to generate savings? Unless they come back to Labor which would be suicide!

Moving the PIT hub would enable US to shed more of its higher wage staff that refuses to move. Not a very nice thing to do but not out of the realm of possibility.

US could demand jetways that are RJ capable in exchance for keeping PIT as a hub.

I have no idea if any or all of the above could, would or should happen, just my observations based on what I read here.

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I know where Dave can get half that $70 million if they choose to go after it.

 

[mlt]

Jim Roddey was on WTAE Evening News a few minutes ago. He stated that he met with Mr. Siegel and general counsel this afternoon. He was told if they do not meet U''s demands Mr. Siegel will pull out of Pittsburgh. Jim Roddey further stated his responsibilities are to the taxpayers and local employees. However, he cannot meet their demands; he will attempt to find an alternative.

 

[trvlr64]

Roddey: US Airways Will Bolt Without New Deal
Airport Preparing For New Lease Talks

UPDATED: 6:00 p.m. EST April 4, 2003

PITTSBURGH -- Allegheny County Chief Executive Jim Roddey said US Airways plans to leave its hub at Pittsburgh International Airport unless a new lease with financial concessions is negotiated.

Roddey announced the news at a Friday afternoon media briefing that followed a meeting with David Siegel, the airline''s president and chief executive officer. Siegel was not available for comment after the meeting.

If US Airways successfully negotiates for less-costly leases, officials said it will affect how the airport makes payments on outstanding bonds, and could affect the county''s bond rating.

County records show that US Airways'' gate leases provide about 85 percent of the payments that go to bond holders who paid for the construction of the airport. Bond holders are owed about $675 million, and they receive annual payments of about $62 million.

In 2001, US Airways paid $60.5 million in rental charges and $11.8 million in landing fees at the airport.

If the company''s payments decrease under a new lease, airport spokeswoman JoAnn Jenny said other airlines will have to make up the difference or the airport will have to cut costs. If that fails, she said bond insurers will cover the difference.

"Worst case, even if US Airways left entirely, the bonds are insured and it would not cost the taxpayers anything," Roddey said Tuesday. "That said, if the insurers had to pick up that cost, it would not be good for our bond rating."

Companies that are reorganizing under Chapter 11 bankruptcy protection can cancel leases, if they get Bankruptcy Court approval.

Roddey said US Airways officials informed him on Monday, shortly before the company emerged from Chapter 11, that they had decided to negotiate new leases.

Roddey said he was surprised because the airport gave the airline $28 million in cash givebacks over the last three years.

 

[RowUnderDCA]

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On 4/4/2003 418 PM mlt wrote:

Jim Roddey was on WTAE Evening News a few minutes ago. He stated that he met with Mr. Siegel and general counsel this afternoon. He was told if they do not meet U's demands Mr. Siegel will pull out of Pittsburgh. Jim Roddey further stated his responsibilities are to the taxpayers and local employees. However, he cannot meet their demands; he will attempt to find an alternative.

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Anybody got any inside scoop as to what these 'alternatives' might be? budgetary shell games? financial smoke and mirrors? selling the seed corn? closing the barn door after the horse has bolted... .er, no scratch that one.

 

[mlt]

WTAE just showed another clip from the interview. Mr. Roddey included the ''whole show''...reservations, maintenance facility and Mid-Atlantic are involved. The reporter said negotiations are scheduled this weekend and Governor Rendel is included.

 

[X-U]

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On 4/4/2003 12:33:20 PM mlt wrote:

Everything this management team does is calculated. This ploy will be the excuse to drastically reduce/completely eliminate mainline flying out of Pittsburgh and turn it into an RJ hub.

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And invoke force majeure to reduce the fleet by the number of aircraft that served the PIT markets?

 

[mlt]

X-U,
It would not surprise me in the least if force majeur (sp?) is involved in some manner. Apparently Jerry Glass our chief union buster hired an attorney as his assistant within the last few weeks. Something tells me our contracts are about to take another hit. Perhaps base closure and relocation provisions?

 

[pitguy]

I heard in May the hits will come for possibly the ''horse manure'' clause. Strictly rumor, but supposedly line manger says "May cuts a coming and they will be big".

- I think maybe they might hit the line, but will keep heavy maintenance up and running to catch up on things.

- Does anything really matter anymore?

 

[PITbull]

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On 4/4/2003 7:36:30 PM pitguy wrote:

I heard in May the hits will come for possibly the 'horse manure' clause. Strictly rumor, but supposedly line manger says "May cuts a coming and they will be big".

- I think maybe they might hit the line, but will keep heavy maintenance up and running to catch up on things.

- Does anything really matter anymore?

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Spoke to some local politicians today, and a few labor leaders in Pittsburgh. Our debt on the airport in PIT is really high. If U doesn't get what they want and renew leases, PIT hub status for mailine will be in jeopardy, along with the local communities from its effects. I am worrying once again for the local employees that live in PIT. This is just another blow to us.

PIT airport was built according to what USAir wanted back in the early 90's. They were given the majority of the gates as well, for their $500 million infustion of cash into the construction of the airport . U serviced most of t hat debt. Now this new mangement decided "game plan" changed, so now PIT as a hub for mainline is in major question. We are hanging in limbo.

It just keeps going, and this saga never ends.

 

[PITbull]

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On 4/1/2003 8:29:53 AM geo1004 wrote:

US pays over $70 MILLION in landing fees and gate leases at PIT each year. With a luke-warm O&D market and the move to a more substantial RJ fleet at PIT, US would be foolish to NOT address these payments in some way.

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Geo,

I've been told by Roddey that the landing fees are absolutely not the problem, its the servicing of the debt on the airport facility.

 

[cavalier]

Otherwise, this terminal is a giant "white elephant" project built under the "build it and they will come" theory. With the amount of capital we are talking about, going on that theory is irresponsible almost to the point of negligence.

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Hind sight is 20/20. Roddey was not even around when this came about. It''s real easy to point the finger after that fact. Name one person who could have read the future when this airport was being built? How many could have seen the towers crumble, then the airline industry’s woes, now SARS and who knows what from this point forward. Yes, it''s really easy to point fingers calling people stupid and short sighted, but it’s another matter to actually rectify the problem. Short of being psychic, not a living soul could have foretold today’s realities.

 

[PITbull]

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On 4/4/2003 1111 PM cavalier wrote:

Otherwise, this terminal is a giant "white elephant" project built under the "build it and they will come" theory. With the amount of capital we are talking about, going on that theory is irresponsible almost to the point of negligence.

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Hind sight is 20/20. Roddey was not even around when this came about. It''s real easy to point the finger after that fact. Name one person who could have read the future when this airport was being built? How many could have seen the towers crumble, then the airline industry’s woes, now SARS and who knows what from this point forward. Yes, it''s really easy to point fingers calling people stupid and short sighted, but it’s another matter to actually rectify the problem. Short of being psychic, not a living soul could have foretold today’s realities.

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Cav,

No words have been said better.

 

[pitguy]

I truly believe the company has not left a nickel on the table and has done some very good things here. Now as far as renegotiating at PIT, who can blame the company? They are in a win win situation since the county will "have" to reduce it''s fee''s. So the no matter what the company will save money. The county has really no other options but to deal with them. One must admit that the airport in PIT is a first class operation. Everything is up to date and very clean. Even the county equipment is all relatively new and appears to be replaced often. The question is though, can we afford it? Heck allot of people are good at spending money. Let''s see who is good at saving money.


-- Besides making PIT into a low cost RJ hub demands less fees.

 

[PITbull]

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On 4/5/2003 6:01:26 AM pitguy wrote:

I truly believe the company has not left a nickel on the table and has done some very good things here. Now as far as renegotiating at PIT, who can blame the company? They are in a win win situation since the county will "have" to reduce it's fee's. So the no matter what the company will save money. The county has really no other options but to deal with them. One must admit that the airport in PIT is a first class operation. Everything is up to date and very clean. Even the county equipment is all relatively new and appears to be replaced often. The question is though, can we afford it? Heck allot of people are good at spending money. Let's see who is good at saving money.


-- Besides making PIT into a low cost RJ hub demands less fees.

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How does an RJ Hub demand less fees??? 300-400 of them. You still take up gate space, and you still have take-offs and landings...a plane is a plane....don't get the logic there...


And please folks...don't forget the premise of "good faith negotiations and good will". Just because this mangement team threatened everyone's lives to get there way, doesn't mean the world should operate this way. Don't allow their logic to prevail. The rest of us are still "civilized", and good negotiations is when folks come to a middle ground and both parties don't feel CHEATED.

 

[DCAflyer]

The county could reduce the lease rates and landing fees to zero and it still does not make economical sense for U to remain in PIT, IMO. It has unsustainable O&D traffic is too close to Philly. If this company is going to have any future at all, we need to find a centralized hub with substantial O&D traffic. To continue to put all U's eggs into the northeast basket is suicide. No posts on this string have listed any good reasons to hang on to PIT. The only good one I can think of is the cost of relocating so many employees, but I think we at some point are going to have to bite the bullet and just do it. And the sooner, the better.