Revised Gecas Financing

[Rob]

The press release says, "GE agreed to provide committed financing for up to 70 regional
jets or $1.4 billion ..."

Wasn't the old one for 170 aircraft and $4.3 billion? It sounds as if everything
that isn't well into production got cancelled. And since 35 or so have already been
delivered, it sounds as if that puts a huge damper on the rj expansion program.

Amn I reading this right?

 

[the turtle]

My buddy at MorganStanley said this "cut you guys off at the knees...". Probably those deliveries, especially the 70 seaters, will go to competition.

Not good.

 

[oldiebutgoody]

Where did this info come from? I haven't seen it anywhere.

 

[delldude]

35 delivered? i was under the impression they have 4 as of yet.

 

[700UW]

They are talking about PSA's CRJs, Mesa CRJs, which we paid for and the MDA planes.

 

[Rob]

oldiebut, the information is contained in numerous recent press releases and reports. Read any news service and you'll find the figures.

 

[oldiebutgoody]

oldiebut, the information is contained in numerous recent press releases and reports. Read any news service and you'll find the figures.

Where? I'm looking, but don't see those numbers anywhere. All I saw was that the company and GECAS were still negotiating financing. GECAS will lose WAY more than just the amount of the RJ order if UAIR goes under. I think that most of UAIR's aircraft are financed through them. Please give me a link or an address to the article so that I may enlighten myself.

 

[PITbull]

35 delivered? i was under the impression they have 4 as of yet.

MAA has 6 RJs with 3 being delivered in June.

 

[700UW]

I don't think you will see GE pulling any financing, read the following from te 10K

In November 2001, US Airways obtained a $404 million credit facility from General
Electric (GE Credit Facility). The GE Credit Facility is secured by collateral including 11 A320-family aircraft and 28 spare engines. As discussed below, the terms of this credit facility were renegotiated so that borrowings bear interest rates of LIBOR plus 3.5% and the term of the facility was extended from 2006 to 2012.


GE is the Company's largest creditor. In addition to the GE Credit Facility, GE has
provided financing or guarantees on 121 of the Company's current operating aircraft. It also maintains the engines on the Company's B737-family aircraft, A320-family aircraft and B767 aircraft. In connection with its reorganization under Chapter 11, the Company reached a settlement with GE that resolved substantially all aircraft, aircraft engine and loan-related issues. The Company obtained additional financing from GE in the form of a liquidity facility of up to $360 million (GE Liquidity Facility). Borrowings under the liquidity facility bear interest of LIBOR plus 4.25%. GE received warrants to purchase 3,817,500 shares of Class A Common Stock at $7.42 per share in Reorganized US Airways Group. GE subsequently agreed to provide committed financing for up to 70 regional jets or $1.4 billion utilizing lease equity and/or mortgage debt. See "Introduction" above for a discussion of conditions related to the committed financing.

Every obligation of the Company to GE is generally cross-defaulted to all GE obligations including the GE Credit Facility and is cross-collateralized to the collateral securing the GE Credit Facility.

 

[oldiebutgoody]

My thoughts, as well. This really does make LOA 91 look like a red herring. I'm all for restructuring to make this place competitive, but another Chapter 11 means sure death.

 

[ClueByFour]

I think the thinking behind LOA 91 is not to keep GE in the game entirely, per se, but to keep the -170s in the fold, since GECAS has a bunch of positions and they (the -170s) are a hot enough commodity that GECAS can probably move them elsewhere.

That said, it comes at the cost of throwing more junior and furloughed AAA pilots under the bus--not a new concept for AAA ALPA. :down:

 

[foreright]

I think the thinking behind LOA 91 is not to keep GE in the game entirely, per se, but to keep the -170s in the fold, since GECAS has a bunch of positions and they (the -170s) are a hot enough commodity that GECAS can probably move them elsewhere.

What would be the benefit of moving the 170 positions to other airlines? It is cheaper for US to fly them at MDA. Regardless of the vote they can fly them at MDA.

 

[Rob]

oldiebut, I think you were being deliberately obtuse; but playing along with your joke, here are two sources.

The old agreement:

"Dow Jones Equity News, Wednesday, May 05, 2004 at 19:40

Last spring US Airways ordered 170 small jets from two manufacturers, an order valued at $4.3 billion at list price. US Airways rounded up financing commitments covering 85% to 90% of the order, mostly in the form of lease-financing from General Electric Co.'s GE Capital Aviation Services unit and the two manufacturers. The airline already has 30 of the planes and is scheduled to take delivery of the rest by 2006."


The new agreement:

" WASHINGTON (Dow Jones)--US Airways Group Inc. (UAIR) said Friday that it reached an agreement late last month with General Electric Co. (GE) to make some changes to their regional jet financing agreement.

GE agreed to provide committed financing for up to 70 regional jets or $1.4 billion using lease equity, mortgage debt or both."


One hundred aircraft and $2.9 billion are missing from the new agreement. OK?

 

[oldiebutgoody]

oldiebut, I think you were being deliberately obtuse; but playing along with your joke, here are two sources.

The old agreement:

"Dow Jones Equity News, Wednesday, May 05, 2004 at 19:40

Last spring US Airways ordered 170 small jets from two manufacturers, an order valued at $4.3 billion at list price. US Airways rounded up financing commitments covering 85% to 90% of the order, mostly in the form of lease-financing from General Electric Co.'s GE Capital Aviation Services unit and the two manufacturers. The airline already has 30 of the planes and is scheduled to take delivery of the rest by 2006."


The new agreement:

" WASHINGTON (Dow Jones)--US Airways Group Inc. (UAIR) said Friday that it reached an agreement late last month with General Electric Co. (GE) to make some changes to their regional jet financing agreement.

GE agreed to provide committed financing for up to 70 regional jets or $1.4 billion using lease equity, mortgage debt or both."


One hundred aircraft and $2.9 billion are missing from the new agreement. OK?

Sorry if I'm not stupid enough to take random statements and numbers stated as facts to be automatically true just because someone here wrote them. I also don't generally believe snippets of articles unless the source is provided and I can verify them. IF YOU DO YOU SHOULD HAVE YOUR HEAD EXAMINED. So, if you intend to quote numbers, statistics or analysts remarks, make sure to state the source, unless it is a generalization. Most of that info appears to be from UAIR's recent 10K, which is actually old information.

 

[CaptianBoomer]

All:

GECAS is in talks with U on the financing arrangements for the RJ's. No decision has been made.

Boomer