Exit Financing & The Future

[700UW]

US sold its hedged back in November for around $45 million as they were approaching the danger level in the ATSB cash requirements.

 

[ClueByFour]

Well you have to have cash to hedge, and if you look at other airlines not named SWA you'll note that at least of the ones that I've seen US Airways was more hedged than most. So imagine if US hadn't hedged at all? My understanding is that UA had no hedges in place and look at their performance.

I'll grant you that sometimes US management appears to be a day late and a dollar short.

Think of it this way: Had Seigel spent $500 millon or a billion on hedges instead of RJs, US might not have entered Chapter 11 again.

SWA pulling out of Bush is probably far less significant than their move into PHL. I was just pointing out that even SWA in not perfect. We are also beginning to see the effects of price erosion and their wage structure on the SWA balance sheet. If not for fuel hedging my understanding is that SWA would be posting some MAJOR LOSSES.

Two further notes: LUV sets their own price erosion--if they jacked fares up at PHL, for instance, I've no doubt that US would match. They will grow their way out from under the wage increases, by spreading the costs out over additional ASMs.

SWA management was both talented and lucky on the fuel hedging and you have to give them credit. Save for the hedge however it appears that would have become as adept at losing money as they were making it in the past.

[post="243489"][/post]​

Maybe not that much, but they'd be in the red. The key thing is that they continually look forward at ways to drive cost out of the enterprise (and look to their employees for ideas to do so, not targets).

 

[usairways_vote_NO]

Heres a novel idea what if they hedged fuel instead of buying back all that stock way back when?

Tiger, buybacks and the good ole days?

""Much of Tiger's enthusiasm is based on what it believes may be "the most aggressive stock buyback program we have seen by any company, in any industry." Tiger is counting on US Air's management to use its "sizable cash flows" to buy $1.8 billion of stock, or 30 million shares, over the next two years""

 

[usairways_vote_NO]

[post="243514"][/post]​

The only answer is something shady behind the scenes.

 

[sfb]

I am not a Wall Street wizard, so could somebody explain to me how using cash to buyback stock in an industry where cash is not only GOD but the Holy Trinity of a successful airline?

Simple. Wolf's goal was not to grow the airline as a viable, efficient competitor. It was to sell the thing for the most money he could get. New paint job, new planes, new terminals, etc. were all ways to pretty up the place for sale, just as people improve houses to make money when they're selling. The stock buyback pumped up the share price, which made Wall Street happy AND allowed them to try to sell US Airways to United for a far higher price than the business was worth. If that merger had gone through, the whole house of cards would probably have come crashing down less than a year after 9/11.

 

[ClueByFour]

I am not a Wall Street wizard, so could somebody explain to me how using cash to buyback stock in an industry where cash is not only GOD but the Holy Trinity of a successful airline?

[post="243514"][/post]​

Increase shareholder value and decrease dilution (typically by increasing earnings per share assuming that earnings stay constant or rise). It can also help to drive up share price, particularly if a share is undervalued relative to the intrinsic market value (Warren Buffet, for instance, is a big fan of companies who do this). It only works if the company is consistantly profitable or a transaction in on the horizon (the latter is probably why they did the buyback at the time).

 

[BoeingBoy]

And it does not stop there.
Let me ask you this Jim...

1. When was the last time you landed on PHL's Rwy 35/17 to avoid airborne or ground delays...? If you wanted to, could you land on that runway everyday?

2. How about Rwy 25/8...? Have you ever made a takeoff or landing on that PHL runway in your 737 Jim...?

3. Do you think a A319 could use the gates at Philly's F Terminal..? How about your 737, would your plane fit into the space between each gate...?

The E-170 is able to skirt traffic congestion in PHL by using the "commuter" runways, and maximize our gate assets by using the commuter gates. Can additonal mainline aircraft do the same...?

Get it...?

[post="242715"][/post]​

I've been out flying for 4 days and you said so much in this thread, I thought I'd start with this.....

1. Haven't used 17/35 (35 was the one I used) much - the times I did use it the taxi to the gate took longer than using 27R would have - 45 minutes once and 55 minutes the other. However, I believe we could land on 17/35 pretty much every day. Taking off would probably be feasible about 1/2 the time. (By the way, just used 15 in DCA for takeoff today to avoid missing our EDCT time - in a 737-400 - and it was perfectly legal, 21,000 pounds of fuel and all. I noticed an Emb-170 waiting to go on 19 - 15 too short?)

2. Nope, and don't intend to - ever - though it would be possible in an emergency. It's amazing how little runway you really need to stop a 60 ton airliner going 150 mph - though the passengers wouldn't like it.

3. Never been over to F terminal, so I don't know if "my" 737 would fit between the gates there or not. I do hear that the Emb-170's are coming back to B/C concourses, though - nothing like adding a little congestion to the operation over in "mainline" territory.

Now some general comments about the gist of the above....

I notice "your" little airplane waiting in line to depart on the 9's/27's in PHL pretty regularly (and landing there too) - 17/35 get a little tight for you sometimes too?

I also notice (in the latest Nov BTS data) that the Emb-170 has a "DOT" delay rate twice mainline - how's that "skirting traffic congestion" working out in PHL?

Lastly, I notice that MDA's L/F is lower than mainline. If you're only filling a little over 1/2 the seats on the average flight, maybe we should trade in some of those Emb-170's for a smaller plane.....after all, it's all about maximizing profit, right?

Jim

 

[Rico]

Well, thanks for missing the point altogether as usual Jim, I know that it is hard for you to see clearly with that bolder-sized chip on your shoulder reagrding MDA and any of the other changes over the last year. I should have expected it.

Point was that the E-170 can use the alternate runways in PHL, and they do so on a regular basis.. We can use the F terminal gates, and have. Both have allowed added capacity to PHL while not adding further congestion (replacing other express flights instead) on the limited number of gates US Airways has, or the airfield in general. That makes the plane more useful IMO, not less. Still wondering why you think otherwise.

As for the load factor, lately nothing has been full, but I cringe far less at 35 open seats on my plane vs. 100+ open seats on yours I see so often...

Yeah dispatch reliability has suffered as of late, remember the "new plane" thing, well, this is our first winter with a plane designed in Brazil. So yeah, we have a fair bit of changes made or coming to solve such things as they come up. Considering that we are under a year old, with a plane that is just as new, I think we are doing quite well, and will only improve overtime...

But in the end, it does not matter, I would prefer additional mainline aircraft over E-170's. But the cold truth is that we cannot finance an aircraft a few people might want, vs financing a small amount of aircraft that GE knows they could find a home for quickly.

We are adding the E170's because we can, and because we should. Not because of some continual effort to make your life worse Jim...

Mainline aircraft will be added later, just not right now, we will both just have to wait until then.

 

[700UW]

What happened in the summer? lol

The MDA Mechanics call it the E-180 as when it leaves the gate it makes a u-turn back to it.

And if you ADD flights to PHL which MDA has, you add to congestion.

And if a mainline plane leaves half full, you can bet all the extra mail and cargo it carriers makes up for what is not in the cabin, can you say the same for your brazilian barbie jet?

Rico, what are you gonna do when MDA is folded into mainline and then the more senior pilots bump down as 25 mainline jets are removed from the fleet and push you onto the street?

 

[xoxo]

700UW,

Actually, the main problem with the E-170 right now is the cold weather..and they are working on that problem. When it overnights in some of these cold cities and they do not keep it warm overnight, then in the morning when the crew arrives everything is frozen. So, it takes awhile for it to dethaw. It is very frustrating..but, it eventually goes. As far as the 180 thing goes..it does not do that anymore. Most of the problems are solved. Even passengers that are upset over the delay are still happy because they love the a/c.

 

[700UW]

I knew the problems in the past were with the software from Honeywell.

I also noticed a lot of brake problems.

 

[ClueByFour]

Even passengers that are upset over the delay are still happy because they love the a/c.

[post="243827"][/post]​

That's a bit of a stretch.

I took a 3 hour delay on a -170 over the summer and almost missed the sole US connection to Barbados because of it. Several others on my flight missed connections to 1x/day cities, and I can tell you that none of them cared about the aircraft.

In fact, absent sitting in a real F seat or even Envoy or Intl First (on OAs), most people (VFFs and non-VFFs alike) don't go "well, I'm delayed, but what a great plane!"

 

[Rico]

Wow, yet another "Bolder Shoulder" comes out of the woodwork...

What happened in the summer?

Unlike Utility equipment, new aircraft have an initial adjustment period to go through, and that goes for each of the seasons, summer and winter.

The MDA Mechanics call it the E-180 as when it leaves the gate it makes a u-turn back to it.

Heh, you should hear what they call the IAM, cannot really repeat it on here

And if you ADD flights to PHL which MDA has, you add to congestion.

Thanks for the heads up, but like I said, we have replaced other express flights at F terminal mostly. Guess you did not notice fewer B-1900, S-340, and DHC-8's in PHL latley, didya...?

And if a mainline plane leaves half full, you can bet all the extra mail and cargo it carriers makes up for what is not in the cabin, can you say the same for your brazilian barbie jet?

You mean like the mail and cargo we carry on our cargo bin too...?

Rico, what are you gonna do when MDA is folded into mainline and then the more senior pilots bump down as 25 mainline jets are removed from the fleet and push you onto the street

? Well, IF they even do, they have to be on the APL list to bid for open positions like the rest of the furloughed Mainline pilots did. There might well be some future positions to bid into, but not anytime soon. IF dispalcements occur though, then I would just head back to the left seat at PDT and enjoy the pay raise..

Say, right back at you, are you going to be able to keep your union position if you get furloughted ...?

I knew the problems in the past were with the software from Honeywell.
I also noticed a lot of brake problems.

Still getting upgrades in the software from Honeywell, like I said, period of adjustment...

Brake problems...? I heard the opposite, we never need to use em much, wear levels are much lower than were expected. Have wintertime APU issues, but not brakes pal...


Thanks for your interest in MDA.

 

[PSA1979]

It really seems silly to me all this "your airplane isn't as good as mine" I flew the MD80 the first block at PSA and loved it. It broke down all the time, I got to go home and get paid while they worked all the bugs out. Same with the BAe146. Lot's of pay for not much flying. Seems to me the same with the EM-170. Remember when the A330 came on line? I remember a mechanic saying to jack it up and stick a 767 under it just to keep it flying.

And last I checked MDA was operating under the US certificate, so let's stop all the us and them. Rico is one of US as is all the mainliners that went over.

And by the way, I flew the EM down to DFW a couple months ago. What a dream! So comfortable. Beats the 737 any day on comfort!

PEACE my friends!!!!!!!!!!!!!!!

 

[700UW]

A 737 or an A320 can hold way more cargo and mail, funny bags are being left of the E170.

And once the E170 is put on mainline, your MDA contract goes away, mainline pilots who will be laid-off since GECAS is taking back 25 planes will bump down to the E170 and put you on the street.

And you left ALG all on your own because you were getting tossed out of the left seat, gee, if you could still be in the left seat at PDT, why did you ever leave in the first place? Sounds like double talk to me. And I doubt if you resigned from ALG that PDT will take you back.