Show Me The Money...

[BoeingBoy]

Cash-strapped US Airways faces a whopping $2 billion outlay if management carries out tentative plans to buy 60 Airbus jets, industry observers said Friday.

Article

 

[robbedagain]

how can usairways afford these brand new a-320s if they are saying the next 30 to 90 days are critical???

 

[700UW]

can you say this?

 

[delldude]

how can usairways afford these brand new a-320s if they are saying the next 30 to 90 days are critical???

bronner has a platinum visa

 

[Flying Titan]

There are two key points in this article.

1) US Airways hopes to reduce costs across the system by acquiring these jets. It's been clear from the beginning that this is the goal - and even normally critical observers on this board have noted that there is merit to this idea if it results in greater revenue and more efficient use of personnel. If these conditions are achieved, then - over time - the jets more than pay for themselves.

2) As we are all aware, US Airways recently managed to finance the biggest RJ order ever and it wasn't really in any better financial shape than it is right now. I have no problem believing that a deal can be struck to finance these aircraft, whether directly from Airbus, Bronner's deep pockets, or another source. Of course the devil will be in the details - will it be a JetBlue deal (attractive) or a deal like TWA got for its new aircraft in its waning years (loan shark)?

If an acceptable deal is reached and if they are properly utilized, I believe the new aircraft could prove to be a key part of the bold stroke that saves US Airways. If they are wasted or if they're overpriced, then they could be the straw that breaks the camel's back and sends US Airways into the history books.

 

[phillyguy]

I thought the 60 were alreay owned by someone else and would not be new aircraft? Is the price quoted in the article for a new Airbus or the market price of these used crafts?

 

[Flying Titan]

I thought the 60 were alreay owned by someone else and would not be new aircraft? Is the price quoted in the article for a new Airbus or the market price of these used crafts?

I believe this is what you could get a new Airbus A320 for these days.

BTW - I was thinking along the same lines as you were. It seems to me that U would have to grab at least some used aircraft just because delivery of 60 new planes would take too long to help with their current predicament.

 

[Andre1980]

I think US can get them but I think the leases US will have to pay will be quite steep since companies with finanical problems usually are asked to pay more for anything especially if they have had a bad history of financial problems etc.

 

[28yearsnojob]

you are being lied to again dont beleive one word they say because i did at one time and got burned

 

[AtlanticBeach]

I think that DellDude got it half right. Bronner probably owns some equipment that he wants to lease or he will swap equipment with a current leasor who may be getting skittish about the future of Airways. A capital equipment swap has some very interesting tax benefits.

 

[Flying Titan]

I think that DellDude got it half right. Bronner probably owns some equipment that he wants to lease or he will swap equipment with a current leasor who may be getting skittish about the future of Airways. A capital equipment swap has some very interesting tax benefits.

I hadn't considered that option. That's a distinct possibility. Of course, like any other deal, that could be good or bad for US - depending on Bronner's terms. It could be a good way for him to pull some extra money out of US, especially if he doesn't like his return on investment thus far.

 

[Piedmont4US]

There are two key points in this article.

1) US Airways hopes to reduce costs across the system by acquiring these jets. It's been clear from the beginning that this is the goal - and even normally critical observers on this board have noted that there is merit to this idea if it results in greater revenue and more efficient use of personnel. If these conditions are achieved, then - over time - the jets more than pay for themselves.

2) As we are all aware, US Airways recently managed to finance the biggest RJ order ever and it wasn't really in any better financial shape than it is right now. I have no problem believing that a deal can be struck to finance these aircraft, whether directly from Airbus, Bronner's deep pockets, or another source. Of course the devil will be in the details - will it be a JetBlue deal (attractive) or a deal like TWA got for its new aircraft in its waning years (loan shark)?

If an acceptable deal is reached and if they are properly utilized, I believe the new aircraft could prove to be a key part of the bold stroke that saves US Airways. If they are wasted or if they're overpriced, then they could be the straw that breaks the camel's back and sends US Airways into the history books.

How could it save US if there are no passengers to fill them up? I mean where are they planning to really dominate with these A320s? They really have got to have a good plan to steal some revenue from other carriers.. perhaps LCCs? US has all the tools to really be a player and they really need some more point-to-point operations at LAX, LAS, SEA, SFO, LGA, TPA, MCO, FLL, MDW.