USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
A P Tech asked: “One quick question, would you have a problem with U reducing the fleet size below 279 A/C and transferring all the leases of the 737's to JO over at Mesa and having them do the flying with their pilots? And please don't tell me you have a contract.....I believe the IAM has one also.â€
USA320Pilot answers: A P, you are comparing apples and oranges. There are two points of difference in the IAM and ALPA contracts. In the IAM dispute the company believes the current contract permits them to outsource heavy maintenance if they do not have the equipment to conduct the overhaul on a new aircraft type. In fact, all of the engine overhaul has been outsourced with the power-by-hour agreements. In addition, the company has offered to meet with the IAM to discuss ways to cost effectively conduct overhaul in-house, but the IAM refuses to meet.
Therefore, the company is looking at some very painful options to lower their maintenance cost, which is one reason US Airways’ chairman David Bronner has said the restructuring will go forward “with or without†employees who do not want to participate in the “Transformation Planâ€.
I believe we all recognize the Pittsburgh overhaul facility will close and be moved to an undesirable location, which is the IAM choice if the do not want to play ball. The challenge for the IAM is that Southwest, FedEx, JetBlue all outsource heavy maintenance and even United has done the same thing. United is down to one maintenance center in San Francisco after closing Indianapolis and Oakland last year.
Senior management says it takes a contractor 13 days to conduct a narrowbody overhaul and US Airways 18 days. Not only does this cost the company more the asset is not available to produce revenue during the 5 extra days.
In regard to the pilot contract, ALPA has permitted outsourcing and our group was the last major airline to grant meaningful scope relief. Critics argue this has hurt US airways because the company has one of the smallest regional jet fleets and has lost key feed and revenue. LOA 79 and LOA 91 provided further outsourcing of big RJ aircraft and more MDA flexability so do not feel as if you are being left out – the pilot group is suffering from the same fate.
Meanwhile, this week Holly Hegeman (I am not a fan of this observer) wrote a very interesting column discussing a pre-packaged bankruptcy with TPG possibly re-gaining control. Hegeman reported US Airways has re-hired the Seabury Group (if you remember John Lutz was a key component of the formal reorganization last time) and FTI Consulting to consult with senior management through the next filing. Moreover, bankruptcy specialists from the law firm of Arnold and Porter have apparently been hired as legal advisors.
If you remember correctly, who was the first person to report on this website that if consensual deals could not be worked out than the company would file a pre-packaged bankruptcy with the target aircraft lessors, airports, and primarily labor?
Also noteworthy, there are additional reports that Dave Siegel is now working as a consultant for TPG who may be interested in becoming an equity investor in both United and US Airways, if the ATSB rejects the loan guarantee application and David Bronner/Bruce Lakefield cannot consensually restructure US Airways. Apparently, RSA could sell its position to TPG and than David Bonderman would combine United and US Airways, but Hegeman said, “I remain hesitant to say the demise of US Airways is a foregone conclusion. Maybe as we know it now the airline is a goner -- but maybe not as a very different animal,†after she reported the information regarding US Airwasy re-hiring bankruptcy financial and legal consultants, TPG's renewed interest, and another UCT/ICT/M&A effrot by US Airways and United.
Thus, could the question be for the IAM be do they want to be a part of the finally married US Airways and Untied or do they want to be standing in the unemployment line with thousands of other members in Pittsburgh and Charlotte?
It appears the company is giving the IAM a choice, just like the company is giving every labor group a choice, including mine.
By the way, ALPA understands this very well, which is why the company and the pilots are engaged in discussion as we speak.
See Story
Regards,
USA320Pilot
USA320Pilot answers: A P, you are comparing apples and oranges. There are two points of difference in the IAM and ALPA contracts. In the IAM dispute the company believes the current contract permits them to outsource heavy maintenance if they do not have the equipment to conduct the overhaul on a new aircraft type. In fact, all of the engine overhaul has been outsourced with the power-by-hour agreements. In addition, the company has offered to meet with the IAM to discuss ways to cost effectively conduct overhaul in-house, but the IAM refuses to meet.
Therefore, the company is looking at some very painful options to lower their maintenance cost, which is one reason US Airways’ chairman David Bronner has said the restructuring will go forward “with or without†employees who do not want to participate in the “Transformation Planâ€.
I believe we all recognize the Pittsburgh overhaul facility will close and be moved to an undesirable location, which is the IAM choice if the do not want to play ball. The challenge for the IAM is that Southwest, FedEx, JetBlue all outsource heavy maintenance and even United has done the same thing. United is down to one maintenance center in San Francisco after closing Indianapolis and Oakland last year.
Senior management says it takes a contractor 13 days to conduct a narrowbody overhaul and US Airways 18 days. Not only does this cost the company more the asset is not available to produce revenue during the 5 extra days.
In regard to the pilot contract, ALPA has permitted outsourcing and our group was the last major airline to grant meaningful scope relief. Critics argue this has hurt US airways because the company has one of the smallest regional jet fleets and has lost key feed and revenue. LOA 79 and LOA 91 provided further outsourcing of big RJ aircraft and more MDA flexability so do not feel as if you are being left out – the pilot group is suffering from the same fate.
Meanwhile, this week Holly Hegeman (I am not a fan of this observer) wrote a very interesting column discussing a pre-packaged bankruptcy with TPG possibly re-gaining control. Hegeman reported US Airways has re-hired the Seabury Group (if you remember John Lutz was a key component of the formal reorganization last time) and FTI Consulting to consult with senior management through the next filing. Moreover, bankruptcy specialists from the law firm of Arnold and Porter have apparently been hired as legal advisors.
If you remember correctly, who was the first person to report on this website that if consensual deals could not be worked out than the company would file a pre-packaged bankruptcy with the target aircraft lessors, airports, and primarily labor?
Also noteworthy, there are additional reports that Dave Siegel is now working as a consultant for TPG who may be interested in becoming an equity investor in both United and US Airways, if the ATSB rejects the loan guarantee application and David Bronner/Bruce Lakefield cannot consensually restructure US Airways. Apparently, RSA could sell its position to TPG and than David Bonderman would combine United and US Airways, but Hegeman said, “I remain hesitant to say the demise of US Airways is a foregone conclusion. Maybe as we know it now the airline is a goner -- but maybe not as a very different animal,†after she reported the information regarding US Airwasy re-hiring bankruptcy financial and legal consultants, TPG's renewed interest, and another UCT/ICT/M&A effrot by US Airways and United.
Thus, could the question be for the IAM be do they want to be a part of the finally married US Airways and Untied or do they want to be standing in the unemployment line with thousands of other members in Pittsburgh and Charlotte?
It appears the company is giving the IAM a choice, just like the company is giving every labor group a choice, including mine.
By the way, ALPA understands this very well, which is why the company and the pilots are engaged in discussion as we speak.
See Story
Regards,
USA320Pilot