The Air Wis Agreement

[BoeingBoy]

But this is totally different- paying for all direct costs for an airline to provide lift to a competitor? That can't be right, can it?

[post="250447"][/post]​

Well, there are direct costs and there are "direct costs". Most of the "direct costs" are paid on flights that will be operated for US. There is one catagory that will be paid for the entire AWAC fleet (presumably just the CRJ fleet) once some minimum number of their planes are flying for us (aircraft ownership cost & insurance are the two mentioned). That number is blacked out so we don't know what it is.

Like I said somewhere, I hope it is a high percentage of AWAC's fleet. If the threshold is something like 60 of the 70 CRJ's, that's not too bad. On the other hand, if it's 10 of the 70 it's not a good deal for US.

On the other hand, AWAC would want that number to be as low as possible. That's help protect them if they lose the UA flying - US would pay those costs during the period the planes were idle before flying here.

Jim

 

[Light Years]

Thanks Jim. One would hope it's a pretty high number and only the CRJs. US doesn't need to be paying for United's Aspen flights on the 146 for no reason.

 

[BoeingBoy]

Agreed, though it wouldn't be the entire cost of those flights.

While it understandable that it's kept confidential, it's a shame that what's called the "Pricing Model" is blacked out. It would be fascinating to see the details of one of these fee for departure agreements.

Jim

 

[Smartest Loser]

Let's see...AWAC pumps 125 Million into U and they get 3 seats on the BOD.

The employee's gave 2 BILLION and they got what..?? NOTHING..!!

SL

 

[mweiss]

Let's see...AWAC pumps 125 Million into U and they get 3 seats on the BOD.

The employee's gave 2 BILLION and they got what..?? NOTHING..!!

[post="250521"][/post]​

Perhaps because there's a difference between supplying new cash and taking less cash?

Perhaps because you were willing to take the paycut without gaining seats on the BOD, but AWAC wasn't willing to provide the cash without it?

It's fine to speak in financial shorthand at times, but it can break down pretty quickly if you're trying to make comparisons, using one shorthand as a yardstick for another.

 

[700UW]

ALPA, IAM both have board seats, the AFA/CWA share one I believe.

 

[BoeingBoy]

Ah, but for how much longer.....

The AWAC agreement calls for only "new common stock" after reorganization, no other classes of stock (like those special shares that ALPA, etc, got one each of that enabled appointment of a director), no different voting classes of stock (like Bronner got that gives him voting control), etc.

Jim

 

[funguy2]

Boeing Boy - is there a time limit on when Air Wisconsin can place its RJs at US Airways?

I ask because I am concerned about the timing of things... a hypothetical:

~ US Airways exits BK as planned on 30JUN05
~ UAL, still in BK, rejects Air Wisconsin contract in, let say, Sept 2005.
~ Air Wisconsin exercises right to place 70 RJs at US Airways
~ US Airways, already out of BK cannot reject Mesa, Chautauqua, or Trans States contracts, must add 70 RJs or try to pull a post BK BK move, like with PIT Airport...

So, what I am getting at is this: Can the timing of UAL's decisions complicate matters for US Airways?

I tend to think the answer is yes. But I also tend to think Air Wisconsin knows - or has a good feeling - that they are being removed from UAL Express anyway...

Or, what if UAL keeps Air Wisconsin Express service, but Air Wisconsin wants to pick up RJ's off the used market (like former FlyI birds and/or aircraft returned by rejected US Airways Express carriers) and put them to US Airways? In otherwords, can they place 70 aircraft at US Airways even if UAL does not fall apart for them?

My gut feeling here is that US Airways could get 70 RJ's it does not need dumped on them...

 

[BoeingBoy]

Well, to be truthful, it's hard to say. Big chunks of parts of the "jet services" agreement are blacked out. But from what is there, it doesn't appear that there's a time limit other than the possibility that US could just repay the DIP and that would presumably cancel the flying part.

To tell the truth, I've wondered the same thing about timing, for the same reasons. Plus, let's not forget the 31 RJ's that we're supposed to get per the GE agreement.

As far as the current affiliates, one of the "first day orders" (is that what they're called) was to assume all the contracts that were necessary for the operation of the business. That was a long list, including interline agreements, clearinghouse agreements, GDS agreements, etc, plus (you got it) affiliate agreements. Now I'm not enough of a BK expert to say this means they can't file a motion today to cancel any or all the affiliate agreements.

Jim

 

[Light Years]

I'm pretty sure the flight described above was a Mesa flight, and I'm pretty damm sure it was the same awful F/A I had on them once. She told tacky jokes the whole time, and was dressed goth, believe it or not. Flight Attendants should not look like they are about to go to a Cure concert or cut themselves. Then there's the other guy who wears Dame Edna glasses.

You never see that type of stuff on a MAA/PDT/PSA flight, but I'm sure it makes them wonder why they even bother.

 

[luvn737s]

AWAC must be pretty confident it can grab any concessions necessary from it's employees to make good on the "lowest cost" portion of it's contract. The race to the bottom just picked more steam!

 

[Smartest Loser]

Perhaps because there's a difference between supplying new cash and taking less cash?

Perhaps because you were willing to take the paycut without gaining seats on the BOD, but AWAC wasn't willing to provide the cash without it?

It's fine to speak in financial shorthand at times, but it can break down pretty quickly if you're trying to make comparisons, using one shorthand as a yardstick for another.

[post="250574"][/post]​

New Cash ..Less Cash...What..?? I don't follow.

Are you saying...If you didn't spend it then its not new cash..?? I hope not, because U revenue stays high and their cost dropped by 2 billion dollars in 3 years.

What about all the cash U didn't spend on ANY OF THE PENSION PLANS IN 2004..?? This is not consider NEW CASH..??

My point is.. Employee's gave 2 Billion dollars IN SAVINGS their return..Buttons.!!

SL

 

[mweiss]

New Cash ..Less Cash...What..?? I don't follow.

[post="250912"][/post]​

I'm saying that it's different when you're wooing a new source of money than when you're dealing with an existing relationship.

 

[Smartest Loser]

I'm saying that it's different when you're wooing a new source of money than when you're dealing with an existing relationship.

[post="250917"][/post]​

I understand...Kinda like dating. LOL

 

[DR.EVIL]

ALPA, IAM both have board seats, the AFA/CWA share one I believe.

[post="250575"][/post]​

It appears that iam board seat has paid off handsomely!! For the company and Joe of course. :down: