Loa 91 - Make Or Break It?

[U 737 PILOT]

LOA 91 is simple:

A yes vote is a vote to keep the airline running with people employed with pay and benefits.

A no vote and GECAS has indicated they will pull the RJ financing. With it will go US Airways feed and about $300 million in additional projected revenue.

Considering the current economic situation, the loan guarantee covenants, and Wall Street sentiment, if the TA is not ratified, the airline will likely fail.

Regards,

USA320Pilot

DOUBLE HOGWASH !!!!!!!!!

 

[Borescope]

LOA 91 is simple:


A no vote and GECAS has indicated they will pull the RJ financing. With it will go US Airways feed and about $300 million in additional projected revenue.

Considering the current economic situation, the loan guarantee covenants, and Wall Street sentiment, if the TA is not ratified, the airline will likely fail.

If you guys don't make it, it will only make it harder for us at UA to get the loan. Not only will we lose feed, but our business plan will have to be rewritten and the Govt may not want to get burned twice. Hope you guys come to a good decision.

A buddy of mine sent this to me....


Wall Street Journal: ATSB should reject UA bailout

An editorial in The Wall Street Journal Friday said the Air Transportation Stabilization Board (ATSB) should reject United Airlines' (UA) request for $1.6 billion in federal loan guarantees. UA applied in December 2002 and declared bankruptcy soon after the ATSB denied its initial loan request.

"United is back for a second try, this time requesting $1.6 billion to help it out of bankruptcy," the article said. "That would be a major error."

The ATSB demanded a tough restructuring program before granting US Airways a $900 million loan guarantee, the article said, "but even that hasn't been enough to make US Airways competitive against the likes of Southwest."

The Wall Street Journalsaid the government should not give UA or other airlines more money to help them compete with low-cost carriers.

"Another $1.6 billion for United will only delay the inevitable day of reckoning," it said.

 

[ClueByFour]

LOA 91 is simple:

A yes vote is a vote to keep the airline running with people employed with pay and benefits.

A no vote and GECAS has indicated they will pull the RJ financing. With it will go US Airways feed and about $300 million in additional projected revenue.

Considering the current economic situation, the loan guarantee covenants, and Wall Street sentiment, if the TA is not ratified, the airline will likely fail.

Regards,

USA320Pilot

Actually, a no vote simply means that you have to convince Johnny O. at Mesa to finance his own aircraft.

He's gonna fly them either way.

 

[Boeingguy]

>>>>Pilots are 3800 out of 25,000. It is just incredible to me that we have been manipulated into believing that if we don't do this, do that, sign this, ratify that, recall so and so from the MEC, yadda yadda yadda, then US Airways will liquidate. Let's put the other 22,000 in the spotlight for a change. <<<<


Some may not want to hear this but most employees of an airline have far less to lose than the pilots in case of an airline's demise -- that's why most of them look at it differently than other employees. It takes many years for pilots to climb the seniority ladder to get to the pay rates they are on that equipment and position let alone getting the experience to even be hired at an airline. Mechanics need their certificates and can get paid roughly the same whether they work on a turbo-prop, RJ, or 747 and nearly as much on a large boat or in a car dealership with no Capt / F/O disparity in pay. Same principle basicly applies to all opther employees. Most employees can move relatively lateraly, while pilots, again RELATIVELY speaking, can not.

 

[seeking the truth]

It's obvious there's is a certain pilot on this board who is very insecure. There are roughly 28000 employess still active with this company, with the vast majority wanting the company to survive. They also don't find the need to get on these message boards and tell everybody to take one for the " Gipper" every time there's a published report or " insde " information (supposedly)is passed on. Don't give this guy a chance to respond or debate, it just makes his "perch" just seem a little higher. Most posters on this board know that his wings have been clipped many times before, spouting drivel. Read his posts if you wish, then let it be, responding, even if the drivel is total "spin" just adds fuel to his fire.



MAYBE management has begun to heed !!!!

 

[ClueByFour]

The other thing to consider with all of this is that if LOA 91 fails to pass, it stands to reason that negotiations will commence again, and the returns to the pilot group will have to be increated to ensure passage. This act of going back to the table does not preclude SJs being moved elsewhere at some point thus mitigating GECAS' concerns.

Of course, CCY (and the original poster) don't want people to think in those terms, lest rational heads prevail and shoot this bad boy down.

 

[savyinvestor]

Piemont1984:

You could not be more wrong. I suggest you and the naysayers talk to people involved in the discussions from outside the company. If LOA 91 is not ratified, it is highly probable there will be no company.

Regards,

USA320Pilot

You should know by now that USA320 is never wrong! Savy

 

[savyinvestor]

That's right 320, vote for it. It's easy to vote to give away someone else's jobs right? Keep in mind, once they get the relief they want on RJs, your job will be next. Will outsourcing be ok once it's the 320's and 737's?

When has voting to give someone elses' job away ever been a concern of USA320? Just wondered. Savy

 

[USA320Pilot]

What's interesting about this thread is how so many so called internet experts seem to know more than the financiers, union advisors, union international officials, and in this case the majority of the ALPA leadership.

If LOA 91 fails, the company will likely be toast. If it passes then the company has a chance to survive.

According to news reports, the pilots agreed to talk about early contract negotiations - but not with Siegel. They will talk to the new chief executive, union spokesman Jack Stephan said. "He's a no-nonsense guy," Stephan said of new CEO Bruce Lakefield, the retired head of Lehman Bros. International from 1995 to 1999.

"Fundamental changes in the way we do business are necessary, and participation again by our employees must be a part of the answer," Lakefield said in a recorded message to employees.

Industry experts say a quick resolution to the labor-cost issue will be necessary for US Airways to stave off asset sales or another bankruptcy. Blaylock & Partners analyst Ray Neidl said in a research note labor cost must come down 25% by summer for US Airways to survive - and even then, he only puts the airline's chance of survival at 50%, because of its corporate culture and the difficulty of operating a hub in the Northeast.

Hours after telling his board that David Siegel was out as chief executive officer, US Airways Chairman David Bronner dialed up the airline's four major unions with a familiar message: Dramatic cuts are still necessary.

"We'll do it by ourselves or with you," he said in a conference call Monday night with leaders of the pilots, machinists, reservation workers and flight attendants unions. According to people familiar with the call, Bronner made it clear that the airline "is not going to survive without change."

Stephan said pilots are anxious to meet with the new chief executive and get to work. Stephan wouldn't say how long it might take to reach an agreement, but he said pilots are aware "that time is not necessarily our ally."

USA320Pilot comments: As a retired military officer I understand Lakefield and his upcoming approach. Therefore, for those who do not want to participate in the going forward plan, Bronner's comments to the unions last week of "we'll do it by ourselves or with you" cannot be any more plain.

Respectfully,

USA320Pilot

 

[oldiebutgoody]

Sorry If I repeat someone else's ideas, but I haven't read the entire thread. I don't see why, other than the opportunity to farm out more jobs, that financing is a big issue. Why would they not loan money to UAIR to buy these airplanes, but then loan it to companies that are reliant on UAIR to make a profit and pay for them? Something doesn't smell right here. What is the company up to? Are the company and GECAS conspiring to lower MORE wages and furlough MORE employees? Is this simply a ruse, which leaves the company in a win-win position? Either they get jets flown by regionals at basically minimum wage, or they blame the fiasco on the defeat of LOA 91 and furlough MORE while parking airplanes? GECAS ALWAYS HAS THE PLANES AS COLLATERAL, NO MATTER WHO FLIES THEM. THIS ENTIRE ISSUE OVER FINANCING IS A RED HERRING! Unless they can come up with something that makes sense, I would be likely to vote NO without proper returns to the pilot group (If I were a pilot, which I may or may not be).

 

[mweiss]

Blaylock & Partners analyst Ray Neidl said in a research note labor cost must come down 25% by summer for US Airways to survive...

Guess it depends on what one means by survival. Perpetual? Another year? The end of summer?

US had $929M in unrestricted cash at the end of 2003. The income statement showed a $174M loss for the months of April through December (since that's when the company went to the DIPs). Extrapolating that to the full year would produce a $232M loss. At that rate, US can survive four more years before closing the doors for good.

Furthermore, total long-term assets are valued at $8.5B, while all liabilities are $5.8B. This leaves $2.7B in company equity excluding the unrestricted cash.

Yes, US is a company in trouble, but the situation isn't as dire as you make it out to be. US's margin has risen from a 19% loss to 3.7% loss...with the bleeding having slowed significantly, the airline has a longer amount of time to go before hitting the ground.

 

[PITbull]

.

If LOA 91 fails, the company will likely be toast. If it passes then the company has a chance to survive.

According to news reports, the pilots agreed to talk about early contract negotiations - but not with Siegel. They will talk to the new chief executive, union spokesman Jack Stephan said. "He's a no-nonsense guy," Stephan said of new CEO Bruce Lakefield, the retired head of Lehman Bros. International from 1995 to 1999.

"Respectfully,

USA320Pilot

As opposed to what? Siegel being a "nonsense guy"? Its the same message, with a different messenger. We all know what's at stake, new face or not, we need to see the plan and what's expected from each group.


Cause the guy is military and 80% of the pilots, doesn't make the guy an expert in people relations, nor being Bronner's best friend.

ALPA had their reasons for sending out the LOA, and THE MAJORITY is the "roll call" 5.

Ask Bronner why he never bothered to look at Siegel's contract and see the $4.5 million walk away clause? That is not upholdig fudiciary responsibility. That contract needed to be renegotiated during the winter concessions. But it must have been over looked, cause the BOD and Bronner was to busy terminating the pilots pension fund.

In two years U went through $32 Million plus $4.5 Million plus whatever Cohen would need if he existed as well, all for 5 senior executives...Almost $40 million and we have been ready to shut our doors and titeeter on the brink for 2 years now, and we still qualified for a damn ATSB loan.

We can't get .20 cents more in Meal expense for the MAA f/as to match the MAA pilots that would only cost less than $5,000 a year for 1,000 f/as if it gets that high., to help these folks out.....and they want WHAT from us???


Makes NO sense to me.

 

[ClueByFour]

What's interesting about this thread is how so many so called internet experts seem to know more than the financiers, union advisors, union international officials, and in this case the majority of the ALPA leadership.

The opinions of the union international and ALPA leadership do not matter, nor are they particularly authoritative on the matter: their only goal is to keep as many dues paying members of AAA ALPA as active dues paying ALPA members, and thus will give advice designed to provide that outcome (you can safely lump "union advisors" into that group as well). In other words, their agenda clearly dictates that they press for this at all costs (it's not the first time that Duane Woerth and the ALPA international cronies have urged action not in the best interests of a pilot group to protect ALPA international's interest--see CCair).

US may require some kind of scope relief to survive, but that does not need to come with the complete lack of return present in LOA 91. There is nothing (short of management's desire to operate a virtual airline, and half the AAA MEC's willingness to feed it's young to the lions to protect their seat for a few years until retirement) to keep the company from coming back to ALPA with a contract that offers anything even approaching realistic returns to the pilot group--and thus ending up satisfying GECAS' desires.

As a retired military officer I understand Lakefield and his upcoming approach.

No disrespect intended, but Lakefield's 30 or so years as a finance guy are going to play far more of a role in what he does than his millitary experience. That and consider that consensus building is not exactly something that the millitary teaches in spades--the old boy's network of ex-millitary types won't help him with any group except the pilots.

 

[oldiebutgoody]

As far as analysts go, I remember analysts saying to buy U at $82 some 12 or more years ago. I also remember them saying U would be gone by Christmas of 2001, then summer of 2002... You get the idea. They know about as much about this company as anybody that reads a newspaper does. The ONLY difference I see is that they get paid for their bad opinions and speculation, while most others do not. I am encouraged by what I see as a determined BOD to make this operation work, and I believe it is ONLY because they see the great potential at this airline. I also believe that the intense hurry to get this thing done is because the economy, and the airline industry in particular, is recovering rapidly now. The company, in my estimation, will begin to profit later this summer, and it could be HUGE if they restructure properly. I just hope that now that Siegel is gone that the philosophy of coming to the employees to save the company from a bad business plan is about over.

 

[Phoenix]

There is now reason to believe the pilot rank-and-file vote in favor of LOA 91 is a vote to keep 28,000 jobs in place. If the TA fails, all US Airways employees will likely lose their pay, benefits, and retirement in short order.

Respectfully,

USA320Pilot

Your attempt to suggest that employee’s jobs will remain secure if LOA 91 is passed is simply false.

LOA91 is not about pilots handing over quantities of cash to save the airline, like they did when they gave up their pension. This is about who flys (and who maintains, and who services, and who supports) the seats that our customers sit in when they fly with US Airways (or planes that pretend to be USAIR).

If Mainline pilots are not flying the plane then we all can be sure that Mainline Fas will not staff them, Mainline Mechs will not maintain them, Mainline Gate agents will not work them, etc. etc. etc.

If LOA 91 passes there will THOUSANDS of Mainline furloughs.

(Edited) you are blatantly attempting to vilify any individuals that question the utility of LOA91 or the integrity of those who are in favor of it. When should we expect your op-ed in the CLT paper?

Your adulating enthusiasm has climbed to such heights that should you come back to earth and merely take up pompoms to exhibit your opposition of your fellow employee, we would all consider you to have finally thrown in the towel.

The IAM and the AFA have successfully resisted the urge to turn tail in the face of Mgts assaults. They are the reason Siegel had to leave.

Sadly it is the pilot’s stampeding retreat that has run roughshod over their own fellow employees.

The fact is that if LOA 91 passes we will see thousands more furloughs and thousands more “Mainlineâ€￾ employees forced to go to express.

But please keep spreading your attempts of manipulative fear and should you decide to merely take up pompoms then please PM me so I can contact the CLT observer.

Respectfully,

Phoenix

“A commander must ensure his troops fear him more than they fear the enemy. And he himself must fear that he be found vanquished by his own selfish machinations rather than by his duty.â€￾