David Siegel's Speech- Nov 12th

[ClueByFour]

He is trying to shrink to profitability.

What he fails to realize is that LCCs will come in and eat that line up in major markets, and DL will eat it alive with Comair everywhere else (and apparently already has).

 

[flynomore]

Did any of the analysts ask Dave how much Delta pays their pilots? [/quote]
The entire program is 31 minutes. Mr. Siegel's presentation lasted 29 minutes, he referred to the time limit, which I guess was 30 minutes. The analysts were not mic-ed, and only three questions were taken. The first, I could not hear or guess from the answer, the second, was rephrased by Siegel. No mention of any pay, only one anecdote about paper job cards in Maintenance being computerized, and the nebulous productivity.

Left unsaid is how do we take a mainline fleet of 279 (or whatever) + 100 RJs. Then add 200 RJs to that total and arrive at a 5%(!) increase in capacity. The truth is 'out there' gang. Listen up.

 

[FlyingHippie]

Did anyone else notice how much Dave used the word "compromise"? He says Song is a compromise for Delta. He mentions that quite a bit. I came away with the impression that Dave is proud of not compromising anything when it comes to costs, but he sure has compromised everthing when it comes to trust and employee relations. It's too bad that he's so underhanded. If he wasn't such a putz he would have been a pretty good CEO.

 

[USA320Pilot]

US Airways president and chief executive officer Dave Siegel made a formal presentation today at the Citigroup/Smith Barney Transportation Conference.

The audio webcast and power point slide presentation can be viewed at the following URL:

Audio Webcast

In the answer and question session, Siegel made the following comments:

 Going forward, the company will increase mainline ASM’s by about 3% using the same number of aircraft. This will increase utilization and improve productivity.

 The company will add about 200 RJs in 2004 and 2005, which will increase RJ ASM’s by about 50%

 The combined mainline and RJ ASM growth will be about 5%.

 Management views Delta Air Lines Song product as a cost compromise between mainline CASM and LCC CASM. US Airways does not view Song or the efforts to force JetBlue out of the Atlanta – Los Angeles market as a success.

 To compete with LCC’s and in particular Southwest in Philadelphia, management believes the existing mainline fleet must precisely match the LCC cost structure across all aspects of the business. US Airways will be a very aggressive competitor against Southwest in Philadelphia and will vigorously defend its principal hub.

Regards,

Chip

 

[USA320Pilot]

In today’s Wall Street presentation Dave Siegel provided an industry 2003 Q3 unrestricted cash position as a percentage of total operating revenue comparison, which is listed below:

Southwest – 131%
Northwest – 110%
Alaska – 107%
US Airways – 88%
America West – 80%
Delta – 79%
Continental – 65%
American – 64%
United – 49%

In relation to network carriers, US Airways ranks number two in the cash/revenue relationship and interestingly its business partner United Airlines is last.

Regards,

Chip

 

[ClueByFour]

In relation to network carriers, US Airways ranks number two in the cash/revenue relationship and interestingly its business partner United Airlines is last.

Wow! A strawman, red herring, and "apples to oranges" all in one assertation!

What was the ratio before US received $1 billion from ATSB loans to exit Chapter 11?

Or, will you be willing to blatently post these ratios again after UA exits Chapter 11?

Give it a rest on the UA comparisons. It's not "thought provoking" anymore. It's "old."

 

[USA320Pilot]

Clue:

Stop it. I made a comment that is valid.

United has a liquidity and revenue problem, which is the lowest of the network carriers. Furthermore, United's revenue problem is a problem and a concern for US Airways because the collective well being of both companies and their employees is tied together.

In addition, both liquidity and revenue are big ATSB issues. Liquidity must be maintained to prevent the ATSB from repossessing assets that have liens against them and revenue must be enough to provide a Fitch Rating audited target of 7% profit margin within 7 years. This will be no easy task as LCC's grow, for US Airways, United, Northwest, or any other legacy carrier.

Regards,

Chip

 

[TheLarkAscending]

Clue:

Stop it.

OMG! Just an FYI, Chip, Clue's a customer and you're not the Captain here on this forum.

Clue (and a collection of others, including moi) would appreciate it greatly if you would be so kind as to give the United=bad, USAirways=good unless there is a merger a rest.

Thank you ever so much!

 

[Jon153]

I'm still interested in Dave's comments about "BILL" Does anyone have any further information about it? I truely believe that if they actually tried to make it work it could. An alliance between Ted and Bill would be quite interesting.
Chip?

 

[Fatherknowsbest]

In my opinion ALL of the legacy Airlines are dinosaurs. The 2 in the worst shape appear to be US Airways and United in that order. United is such a large airline, that it is unlikely the Govt will allow it to fail anytime soon. US Airways is now so small in size that she is no longer relevent.

As recently as 2 weeks ago I believed a UAL-US combination was most probable (Bronner hired Dutta formally of UAL for advisor role). It is also my opinion that without handing over a high-yield PHL market, that United is less and less likely to play the merger game.

It is what it is. US Airways is shrinking into oblivion without anyone at the helm that cares for anyone but himself.

After Delta and the rest see the demize of U, it may scare them into evolving into companies that can learn to compete. However, for Siegel to continue to play the game of it's time to furlough again ( I expect the details very soon) is surely a loosers game.

We as employees can only follow the road that is paved by our Management. What kind of road has been paved by Siegel and his executive team?

One last thought. I do not believe that Dr Bronner is a patient man. He has his left foot already in quicksand. How likely is he to insert his right foot in the same mess by trying to combine the 2 Airlines most likely to have cardiac arrest?

No ill will intended for either employee group. US Airways has always been a reactionary Airline, unable to adapt to the post 9-11 world, and unable to lead in any category. For United best of luck, for US Airways, the luck is gone.

 

[flynomore]

 The company will add about 200 RJs in 2004 and 2005, which will increase RJ ASM’s by about 50%

 The combined mainline and RJ ASM growth will be about 5%.

Chip

I edited out some of Mr. Munn's post. Since he is the palace mouthpiece, note the two statements I repeated here.

If we grow RJ ASM's (capacity) 50%, yet System (Mainline + RJ) ASM's only increase 5%, it does not take a course in Algebra 2 to see that we are toast.

And shame on you Munn for pushing this offensive drivel. That 85 seniority is not looking too good if this is true, mate.

 

[ClueByFour]

Edited, because I thought better of it and stand by my post above.

 

[Busdrvr]

Chip, you can't seem to post without mentioning UAL, so I must comment on your inaccuracies.

"UAL has a low "cash to revenue " ratio." TRUE. But golly gee Chip, I guess if UAL cut it's REVENUE in half, the number would be MUCH better. Are you saying that would be good? Maybe if UAL wasn't paying back DIP loans EARLY the number would be 'better'. Is it just me or does it seem absolutely ludicrous to hoard cash while paying interests on loans IF you have a viable business plan.... Hmmm....

"UAL has a liquidity and revenue problem, which is the lowest in the industry" Thats wrong, and you know it Chip. It was recently pointed out to you in another thread. UAL operating revenue per ASM was NOT the lowest, beating out CAL and AMR and was only slightly below DAL. you arguements would have more merit if they were fact based.

 

[Light Years]

How are we only growing by 5% with all of the RJ growth? Even if you only count US Airways Group, thats 85 EMB170s and I think 60 CRJs? Not to count all the RJs that will be operated on our behalf by every sleazeball regional under the sun! How can that only be 5% growth?

My bet is that MidAtlantic, with its scopebusting jets and lower than LCC operating costs, plus a small handful of mainline jets and employees are what will be sold off in a couple of years. This will be after the company has been mismanaged (or shrewdly managed depending on what side your on) into the ground. The successor airline gets a low cost short haul subsidiary blanketing the Northeast, gates and facilities at PHL and CLT, Carribbean and transatlantic routes, coveted slots and facilities at DCA, LGA, and BOS plus the Shuttle- and only a miniscule group of mainline employees to integrate (depending on the airline and its unions). I doubt any successor airline would honor flowback from MDA. Our CCY friends walk away even richer.

The only people who care about US Airways as a stand alone carrier are its employees, and thats a group that is rapidly disappearing.

 

[diogenes]

Light Years,

Concur.