RJ Update

[chipmunn]

Today in bankruptcy court US Airways CFO Neal Cohen revealed that US Airways has secured financing for $3 to $4 billion for RJs, contingent upon solving the pilot pension plan dilemma.
For US Airways Group, there will be 80 to 100 RJs delivered by December 31, 2004 and the business plan calls for MidAtlantic Airways and US Airways' subsidiaries will eventually operate 160 RJs.
Separately, it has come to my attention that MidAtlantic Airways will have three EMB-170 RJs in service in October 2003.
Also noteworthy, the first Mesa J4J pilot training class began today.
Chip

 

[St. Leibowitz]

THE TEAMSTERS
Union aims to block airline, says it sidesteps labor contract
By Bill Wolfe
[email protected]
The Courier-Journal

The Teamsters union is trying to block the creation of Republic Airlines, which announced yesterday that it will base its operations in Louisville.

Jason Hedgepeth, communications manager for Teamsters Local 747, says Republic Airlines is a ''low-cost carrier'' that was created ''to bypass any kind of labor contract.'' He said the union will ask an independent arbitrator to stop Republic.

Tom Hanley, president of the airline, said last night that union officials are ''going to do what they think is right for them. It doesn't really affect what we're doing.''

Republic Airways, the parent of Republic Airlines and Chautauqua Airlines in Indianapolis, formed the airline after US Airways demanded that half of the new jobs at regional affiliates such as Chautauqua be offered to laid-off US Airways pilots.

The Chautauqua pilots opposed US Airways' measure because they feared losing seniority to an influx of outsiders who would maintain their seniority, Hedgepeth said.

Now the new airline, which will fly as US Airways Express, meets the obligation for hiring the laid-off pilots, but the Teamsters fear that the Louisville airline also will siphon off some of Chautauqua's business.

The ''US Airways' Jets for Jobs'' vote pitted the Teamsters against a larger pilots' union, the Air Line Pilots Association, which secured the program in negotiations with US Airways.

''The whole premise for the 'Jets for Jobs' program was to provide job opportunities,'' said Richard Obermeyer, spokesman for the association in Pittsburgh. ''Our guys are losing their jobs. We want to do something to provide opportunities for them at those other programs.''

The former US Airways pilots who fly for Republic doubtless will see smaller salaries and longer hours than at the larger airline, said Kit Darby, president of Aviation Information Resources Inc., an Atlanta job information service for pilots.

Pay figures for Republic Airlines weren't available, but top pay for a pilot at Chautauqua is $6,115 a month, he said. That's about one-third of the top pay a pilot might make at a large airline.

Still, ''Jets for Jobs'' is an innovative approach to layoffs, said David Field of Airline Business magazine.

And ''some guys really prefer to work for a regional, because they move up the seniority ladder fairly quickly,'' Field said. That allows them to choose their schedules and have a ''stable, reliable home life.''

Regional airlines also work well for large airlines that don't want to fly their own large planes in smaller markets.

''They keep the airline's name in the public eye,'' Field said.

Regional airlines have grown substantially in the past five to seven years, said Michael Miller, president of Miller Air Group Inc. in Orlando, Fla.

''Regional jets have allowed new markets to open up and new efficiencies to come into the inefficient major airline structure that we have in the U.S.,'' he said. ''Basically, we have the situation that the regional airlines are expanding as the major airlines are contracting.''

 

[N628AU]

Good luck Teamsters. ALPA tried this with Freedom Air, and Freedom operated anyway. You are wasting your time.

 

[ua767fo]

Chip,

To set things straight, there is nothing regional about what the ATA members call RJs. You and both know that they have long legs, can generate massive revenue over very large route systems. Kindly consider the term "Small Jet", as this most appropriately describes them. The 69 seat F28-1000 certainly was not regional by any mean.

Keep up the fight for your rightfully deserved and hard earned pension.

Best wishes from DEN.

 

[N628AU]

UA767FO...

How does that ALPA Kool-Aid taste? How will it taste when you accept the same or even more onerous concessions to keep UA alive? This must be straight out of "Norma Rae".

 

[chipmunn]

Start-up airline taps Louisville for its base

Area may get 355 jobs, increased flight service

LOUISVILLE (The Courier-Journal) - The nation's newest regional airline will put its corporate and maintenance headquarters in Louisville, creating 355 jobs and potentially increasing passenger service to other cities.

Republic Airlines President Tom Hanley announced yesterday that his company plans to have 10 regional jets, with 50 seats each, flying by the end of the year. There are plans for 10 more by July 2004.

Routes have not been settled.

''We are very happy now to call Louisville our home,'' Hanley said yesterday afternoon during a news conference at Louisville International Airport.

Metro Mayor Jerry Abramson praised Republic's choice of Louisville over Greensboro, S.C., and Rochester, N.Y., the other cities trying to lure the company.

''It's great to have them here, and it's great to have the jobs they're going to bring,'' Abramson said.

He said the additional aircraft flying into Louisville International should not create much more noise because the planes are small.

Mary Rose Evans, president of the Airport Neighbors Alliance and an airport board member, agreed and said the biggest noise problems come from large UPS planes.

The company will fly under the name, logo and colors of U.S. Airways, which has declared bankruptcy and is increasingly contracting with regional companies such as Republic to shuttle passengers from small and medium-sized cities to hub airports.

Hanley doesn't yet know which routes Republic will cover for U.S. Airways. After the announcement, he said U.S. Airways ''will decide what the schedules are.''

Republic's planes will be based in Louisville and fly there every three or four days for regular maintenance. With Republic's entire fleet in the city so regularly, that will likely translate into the company offering flights to cities that Louisville International now serves -- and perhaps some it doesn't, Hanley said.

J. Michael Brown, chairman of the Regional Airport Authority, which has been working for months to lure the airline, said yesterday that the state incentives ''were what really put us over the top'' in winning Republic.

''We had the community and we had the synergy,'' Brown said, ''but we needed a few million bucks.''

In January, the state announced it would give Republic up to $7.8 million in tax rebates over the next decade if the company meets its projections for hiring 355 people for an annual payroll starting at $12.4 million.

The airport's general manager, Jim DeLong, said the airport board will issue $5 million in bonds to build Republic a maintenance hangar and an office building on 3.6 acres at the FBO Aviation Center, which is east of the airport's runways and abuts Interstate 65. Republic will pay the debt on the bonds through annual rent payments.

The airport authority's board meets tomorrow and is expected to award a contract to build the hangar, DeLong said.

The hangar and office are expected to be completed in fall 2004. Until then, DeLong said, Republic will operate out of an existing hangar at FBO.

Hanley said Republic will hire a mix of local workers and experts from out of state. Pilots who have been laid off by U.S. Airways will receive offers to fly for Republic, Hanley said, while the company would likely hire flight attendants and other crew members locally.

Amy Kudwa, a spokeswoman for U.S. Airways, based in Arlington, Va., said it's too early to say when service will begin.

Republic will become the 11th regional jet company that flies under the U.S. Airways Express banner.

Republic is owned by Republic Holdings Inc., the same corporation that owns Chautauqua Airlines, a regional jet service based in Indianapolis. Chautauqua flies routes for U.S. Airways and several other major carriers.

Hanley said yesterday that Republic also may begin flying routes for airlines in addition to U.S. Airways.

Steve Higdon, president of Greater Louisville Inc., the metro chamber of commerce, said Republic's decision to choose Louisville is proof again that the airport's controversial expansion of the late 1980s was a wise decision.

Republic's announcement drew praise yesterday from Don Wenzel of Louisville.

Wenzel, an executive with Bank One who often flies as part of his job, said yesterday that Republic's presence in Louisville will be good for several reasons. In addition to jobs, Republic will likely bring increased air service to other cities -- and the competition could mean lower prices for travelers, Wenzel said.

''I don't see any downside,'' he said.

Wenzel said the growth in the number of regional jets doesn't trouble him.

''I am most concerned about getting from point A to point B safely and on time,'' he said.

Regional jets ''allow some additional service into smaller cities and are more cost-effective,'' he said.

Deborah McElroy, president of the Regional Airline Association based in Washington, D.C., said Republic is the country's newest regional airline -- and the 92nd nationwide.

Regional airlines range from small companies with four or five turboprop planes, she said, to large corporations with hundreds of airliners in their fleets.

Regional airlines such as Republic are becoming increasingly important in the industry, McElroy said.

''Major carriers are struggling to survive, and that is no melodrama. That is the truth,'' she said.

 

[Capecod]

"Also noteworthy, the first Mesa J4J pilot training class began today."
------------------------------------

Chip, I heard only 19 people signed up for a class of 30. Did you here this?
-Cape

 

[cubfan02us]

Was wondering about Mid-Atl,had'nt heard
much lately.

But Cohen is still putting the onus on the pilot's.Let's see now if the pilot's
pension isn't settled:

1. No more credit card clearing house,
Liquidate.
2. No 3-4 billion for RJ's,
Liquidate.
3. No ATSB loan,
Liquidate.
4. No DIP financing,
Liquidate.

The company spin doctor's are workin'
overtime.I'll bet ole Steve Wolf is doing
his part too.

Also keep an eye on UAL and Atlantic coast.
If UAL dumps IAD Atlantic could fly RJ's
for U.Possibly affecting jobs at Mid-Atl...

 

[chipmunn]

Ua767fo & CapeCod:

Ua767fo said: "To set things straight, there is nothing regional about what the ATA members call RJs."

Chip comments: Agreed.

CapeCod asked: "Chip, I heard only 19 people signed up for a class of 30. Did you here this?"

Chip answers: The first Mesa J4J class had 17 Captains and 13 F/O's. All of the pilots who elected to take this position reported to class.

Chip

 

[chipmunn]

Brazil Embraer shares slump as Swiss cuts fleet

SAO PAULO (Reuters) - The share's of Brazilian aircraft maker Embraer fell sharply on Tuesday after one of its major clients said it was cutting its fleet and might delay the delivery of new jets on order.

The shares of Empresa Brasileira de Aeronautica SA, the world's fourth-largest commercial aircraft manufacturer, skidded 3.47 percent in late afternoon trading to 8.90 reais, compared with a 1.97 percent drop of the Sao Paulo Stock Exchange's benchmark Bovespa index.

Embraer shares slid further into the red after one of its top clients, Swiss flag carrier Swiss International Air Lines said it was cutting 20 aircraft from its fleet, including 17 regional jets.

Swiss is a launch customer for Embraer's 66-seat ERJ 170 aircraft of which it has 30 on order for delivery in August, as well as 30 of the bigger ERJ 190 due in 2004. Swiss Chief Executive Andre Dose said the airline was in talks with Embraer to delay the delivery of some of the jets.

"It's still too early to say how this is going to affect Embraer, but any time there's bad news about it clients, the initial reaction is that it's bad news for Embraer," said Alexandre Garcia, an analyst at BES Securities in Rio de Janeiro.

Earlier this month, Embraer's biggest client, U.S. carrier ExpressJet Holdings Inc. rescheduled the delivery of three quarters of its orders for the 50-seat ERJ 145 XR jet. The news prompted Embraer to slash its delivery targets for this year and next, sending its stock price to a 16-month low.

Chip comments: Provided US solves it pension problem, reports indicate the carrier will take delivery of three EMB-170s in October, which could be accelerated dependent upon the talks between Embraer and Swiss International Air Lines.

Chip

 

[ITRADE]

I was thinking that with the cutbacks announced by Swiss, that a lot of delivery slots would certainly be opened up.

Anybody venture to guess if any US affiliate or contract carrier will attempt to acquire DO-328Jets now that the bankrupt company has been restarted (at least the DO-328/428 line).

 

[Diesel8]

Am I understanding this correctly: ALPA was against Freedom Air and U pilots would label pilots there "almost Sc@bs", while for U pilots to take jobs with Republic is kosher? Did the U pilots reach an agreement with Mesa and their pilots?

 

[ua767fo]

N628AU said:"How does that ALPA Kool-Aid taste? How will it taste when you accept the same or even more onerous concessions to keep UA alive?"

My answer...pretty darn good. I would certainly compare the taste of "ALPA Kool Aid" to the non union stuff lots of less fortunate pilots drink from. Yup...I'll have another glass.

 

[ClueByFour]

[blockquote]
----------------
On 2/25/2003 9:39:06 PM Diesel8 wrote:

Did the U pilots reach an agreement with Mesa and their pilots?

----------------
[/blockquote]

At the time the class in question started, no. The Mesa MEC unilaterally allowed it, without putting it to a vote of the rank and file. Does this really suprise anybody?

I guess even the baby-MECs eat their young...