Storm clouds on the horizon...

[Non Rev]

I ran across this today: Article

Interesting points: "US Airways said in regulatory filing Wednesday that its high level of fixed obligations limits its ability to fund general corporate requirements and to obtain additional financing. Its fixed obligations include debt, aircraft leases and financings and aircraft purchase commitments."

&

"US Airways said its "existing indebtedness is secured by substantially all" of its assets. It also said the terms of a credit facility it has with Citicorp and other financing arrangements require the company to maintain consolidated unrestricted cash and cash equivalents of not less than $850 million. Neidl currently projects US Airways will end 2009 with $1.4 billion in unrestricted cash and short-term investments."

 

[Pacemaker]

Airlines are engaged in a war of attrition and with their unit costs what they are I don't think US Airways is in a position to survive such a war. Improved service levels are nice but don't alter a business model that is simply not viable.

 

[Dog Wonder]

Storm clouds are always on the horizon.

 

[28L_or_10R?]

I ran across this today: Article

Interesting points: "US Airways said in regulatory filing Wednesday that its high level of fixed obligations limits its ability to fund general corporate requirements and to obtain additional financing. Its fixed obligations include debt, aircraft leases and financings and aircraft purchase commitments."

&

"US Airways said its "existing indebtedness is secured by substantially all" of its assets. It also said the terms of a credit facility it has with Citicorp and other financing arrangements require the company to maintain consolidated unrestricted cash and cash equivalents of not less than $850 million. Neidl currently projects US Airways will end 2009 with $1.4 billion in unrestricted cash and short-term investments."

i.e. We will need to get our employees to take pay cuts. Let's start with fleet service and outsource as many of the hairless apes as we can. <_<

 

[NCFL]

Improved service levels are nice but don't alter a business model that is simply not viable.

I recall when Operation Barbell/Dumbell or whatever it was called was announced many in the East thought "We tried a similar route structure arrangement with PSA and it failed. Why are we trying it again?" Then pile the rest of the problems on top of an inherently flawed route map and viola!

 

[autofixer]

It must be pilot contract negotiation time again? Oh, it is!

 

[Pi brat]

I ran across this today: Article

Interesting points: "US Airways said in regulatory filing Wednesday that its high level of fixed obligations limits its ability to fund general corporate requirements and to obtain additional financing. Its fixed obligations include debt, aircraft leases and financings and aircraft purchase commitments."

&

"US Airways said its "existing indebtedness is secured by substantially all" of its assets. It also said the terms of a credit facility it has with Citicorp and other financing arrangements require the company to maintain consolidated unrestricted cash and cash equivalents of not less than $850 million. Neidl currently projects US Airways will end 2009 with $1.4 billion in unrestricted cash and short-term investments."

On the horizon? Heck, this airline lives in the Intertropical Convergence Zone.

 

[poplockanddropit]

Lets face it - We are all in a bind... The premium revenues are dropping off and the money isn't coming in.... With UAL and CAL - they are calling it a "soft merger" ... But once CAL gets ATI with UAL I think the ball game will start to change.. I think UAL should merge with US and refigure its HUBS, Keep PHL as is, keep the shuttle, downsize CLT just a little and chop PHX down to focus city as well as Vegas, relocate 100 aircraft to Atlanta or Miami and start up ops with a vigorous schedule, If you choose ATL, form a partnership with AirTran and have them join * - create another "soft merger" with AirTran and share ops, real estate etc.. UAL and CAL will already have the Map Covered with a WAY better route system than DELTA (which is why they are pushing hard to oppose the ATI) - Having PHL would lockup the NE, and CLT and ATL, and IAH would lockup the south, ORD is ours and the west coast with SFO and LAX being UAL, The shuttle would be ours etc etc etc.. I think you will start to see all this happen soon.. BUUTTT thats just my 2 cents... Take it for what its worth... WINK WINK!!!
Delta is opposing this, for one reason, it's simple.. DAL has mostly hubs like US - secondary.. DTW and MSP are not mega hubs like JFK ORD IAD SFO ATL IAH LAX MIA.. SLC is ok but no biggie.. They are weak in LAX SFO ORD - Thay are secondary to AMR in JFK... So basically their hope is on ATL and secondary hubs, and they know this.. DTW business travel will decline with the automakers in trouble so it won't be near what it used to be for business travel. Basically the game will get interesting real soon.. Sit back and Relax and watch the show...

 

[LCC_#1]

Storm clouds are always on the horizon.

20 years worth at that. Well, the sandflees are reaping what they sowed!

 

[oldiebutgoody]

You guys know that this is all because they can't sell their sodas, right? That was going to save LCC.

What's really telling is how little concern there appears to be from the employees. I guess after being lied to, stolen from and lied to again, they just get numb to it. Nobody believes the thieven' bastards anymore.

 

[700UW]

Deploy 100 A/C to ATL or MIA? Where are they gonna come from and what gate space are they going to use and what markets since ATL and MIA are all ready hubs for other airlines.

And I hate to tell you but DL is the largest from JFK to Europe than any other carrier.

Your plan is a recipe for disaster.

 

[Dorf]

The point is the cost reductions are not going to come from employee wages and benefit this time around as CCY already did that bit of heavy lifting in that regard. Yet the key to saving money resides in those same employees as they know better than most managers where the "Stupid Money" is spent.

Piney,
The "stupid money" is/has been spent on Parker & his merry band of incompetants!

US senior management will have to further develop a new attitude towards Customers and Employees.

The problem is that they think they are smarter than everyone else, so why ask opinions/help from people whom they feel are inferior. Parker blew his chance very early on in this "train wreck" of a merger by not cleaning house of the same old upper middle managers that have been running U into the ground for YEARS. They may have beat the employees into submission (an patted themselves on the back for doing it)but that only works for so long, then the employees just stop caring and now they just keep trying to use the same tactics all the while telling Parker "don't worry, this will work, just be patient". Unfortunately for everyone, employees and customers alike, Parker believes them. Of course, the employees TOLD THEM that some of these "revenue generators" would not work, but they had to find out for themselves and they have driven away some of the best customers. Hopefully, it's not too late and that the employees of U can weather another storm and get back to where they can be fairly compensated and ENJOY coming to work and doing what they do best, take care of the customer.

Dorf

 

[poplockanddropit]

Deploy 100 A/C to ATL or MIA? Where are they gonna come from and what gate space are they going to use and what markets since ATL and MIA are all ready hubs for other airlines.

And I hate to tell you but DL is the largest from JFK to Europe than any other carrier.

Your plan is a recipe for disaster.

FROM JFK?? They may do more destinations but not seat capacity.. No, actually its not a recipe for disaster if you do it right, if you do not have the right alliances and feed, then yes it is a recipe for disaster but not if you pull from unprofitable routes, and then start putting it in markets with little competition and work your way to a sizeable operation over a couple of years.. Penetrate the fortress hub very steady, kinda like southwest did in denver and philly.. It would work under the right circumstances, but you have to have competent mgmt.... It will be interesting and I think u might just be surprised 700UW..

 

[Furloughd4now]

Obama said last night he will cut the tax breaks to any corporation that provides jobs out of the country ..... Me thinks that pertains to US (Res?)

And it most likely the reason UAL will be cutting the cord on their complaint phone center that is out of the country.

so, as a result of that, can we expect to see call centers re-open in the US? If so, that would make our "storm clouds" even darker (ie. increased ops costs to maintain tax cuts)?

 

[ekjkj]

Remember one of Dougs town hall meeting when he was asked "why has all the merger talk died down"? His responce was in two parts the first part we've all heard before "mergers are good...ect., but the second part was interesting he said "either way we are going to have a new administration and if there were a merger announcement there wouldn't be enough time to get it through prior to the end of the bush administration" then he said he suspects if there are going to be merger announcement they would come after the new administration so they know who they were dealing with. My translation "we have plenty of time to cross our i's and dot our t"s to make sure a merger will get fast approval". Also don't rule out another bankruptcy maybe not for us but for someone Doug wants to merge with...deja vu .