The Glanzer Report

[BoeingBoy]

"By the way, ALPA has specifically asked that the report not be made public and as little information that is released is best for the process."

From the Inquirer article you cited...

"A copy of the report was obtained from sources in the pilots union who asked not to be identified."

So it seems the report is already public.

Jim

 

[USA320Pilot]

HP-FA:

The new business plan company labor accord proposals were openers and there are opportunities to make more gross pay with overtime, vacation fly back, and exchanging work rule changes for pay.

In regard to your comment of the plan is a “destination is bankruptcy and/or losing homes? On top of all that, what about the stress this financial stuff will put on marriages and relationships,â€￾ what do you think would happen if the business enterprise suspends operations?

If the proposed changes are unacceptable, I firmly believe it’s better to have a job while looking for a job and we all have choices. Either work at the company while looking for a new job or have no job while looking for a new job, if the TP is not implemented.

Respectfully,

USA320Pilot

 

[USA320Pilot]

BoeingBoy:

That doesn’t make it right for you to provide information from the report when ALPA asked that it not be distributed. With all due respect, to me that’s an integrity violation.

Respectfully,

USA320Pilot

 

[mweiss]

And once Iraq starts pumping oil the good times will roll again.

[post="168130"][/post]​

Not with Lukos shutting down. Iraq is a rounding error compared to Lukos.

 

[mweiss]

The cost of living on the east coast, where most of the U folks live, is much higher then PHX.

[post="168131"][/post]​

Believe it or not, PHX is comparable to PIT or CLT. Nonetheless, DC, NY, and PHL are more expensive.

 

[BoeingBoy]

"With all due respect, to me that’s an integrity violation."

Guess I'll just have to wait for my ticket from the "integrity police" then...

All kidding aside, however, there are so many "[text deleted]'s" that only a fortune teller could devine any useful information from the report. If what remains is so important to convincing the pilots to accept more concessions, maybe ALPA would be well served by releasing it to all employees.

Jim

 

[Bluestreak]

Lukos will only shutdown temporarily. There is too much money to be made for Lukos's assets to sit dormant long. If anything, I think the russian government will step in to keep the place running.

I think this price spike in oil will last for awhile, but when it's over the airlines will all be so lean that the profits will be amazing. It's just a matter of who survives that long.

One good thing about oil prices be high; there's a good chance George W will lose this fall.

 

[EyeInTheSky]

BoeingBoy, I just got done reading the report. Let me put it this way: I got the distinct impression that the company is more valuable in liquidation (to the creditors) than in operation. That being said it's going to take a whole lot of fancy-schmancy-deckchair-arranging-on-the-Titanic to get anything remotely possible to saving this company. Hey, miracles do happen. I am an optimist and I gotta tell you I didn't see any light at the end of the tunnel for this 14 billion dollar in-debt company. It's overtime and its a sudden death situation, if you were a coach what strategy would you use?

 

[luvn737s]

All the genuises spouting off about paying everyone HP-type wages are forgetting one big thing. HP is based in PHX, which is also where most of the people live. The cost of living on the east coast, where most of the U folks live, is much higher then PHX. So, while we can do OK on HP wages they are likely to cause many U folks to lose houses, file Chapter 7's etc.

What's the point of having a job where the clear destination is bankruptcy and/or losing homes? On top of all that, what about the stress this financial stuff will put on marriages and relationships?

[post="168131"][/post]​

Huh? I moved to PHX from ABE 7 years ago and it is much more expensive out here. And alot less value for your money. I agree plenty of people will have to adjust their way of living. Except Siegel, Lakefield and Bronner, of course.

 

[luvn737s]

HP-FA:

In regard to your comment of the plan is a “destination is bankruptcy and/or losing homes? On top of all that, what about the stress this financial stuff will put on marriages and relationships,â€￾ what do you think would happen if the business enterprise suspends operations?

[post="168134"][/post]​

Almost anyone flying for HP under age 50 that could get an offer from WN would jump at the chance. The demographics of the current UAir pilot group are the equivalent of each of them starting all over again if they accept this ultimatum. They avoid the uncertainty of getting another job and they get to park at the same place, but that's about it.

Why doesn't ALPA accept that there are no "have" and "have not" airlines and negotiate one contract for all airlines? Oh, because the President of ALPA works for a "have" airline. For now.

 

[BoeingBoy]

NY Times Article:

Pilots' Study Warns US Air on Finances
By MICHELINE MAYNARD

Published: August 13, 2004

US Airways will go out of business within months if it cannot significantly cut its costs and adopt a leaner operating structure, a financial report commissioned by its pilots' union concluded yesterday.

The analysis, which was done by Glanzer & Company, an investment banking firm, found that the airline would risk filing for a second Chapter 11 bankruptcy by mid-September, if it missed a series of crucial financial deadlines.

The confidential report was drafted for the Air Line Pilots Association, which is in talks with US Airways on its share of $800 million of cuts in wages and benefits that the airline is seeking from its unions, which gave the company two sets of concessions in bankruptcy.

The 3,400-member pilots' union refused to comment on the findings, which were distributed to its members. But a spokesman, Jack Stephan, said the pilots "do not disagree in principle with the conclusions reached by our investment banker."

The airline, in a statement, also declined to discuss the specifics but said it was in "the best interests of the company and employees" to reach agreement quickly with its unions.

In all, US Airways is racing to cut $1.5 billion from its operations, including the labor cuts, to avoid another bankruptcy filing. The airline, which emerged from bankruptcy in April 2003, is taking apart its hub-and-spoke operations to focus instead on direct flights from airports in Boston, New York, Philadelphia and Washington, and compete with low-fare airlines that have grabbed market share from those cities.

But there has been resistance to US Airways' push for cutbacks among employees who are skeptical that the situation is really so dire, both within the pilots' union and among other labor groups.

The Glanzer report, while commissioned by the pilots' union, appeared to bolster US Airways' case.

Absent a new cost structure, the report said, US Airways could cease to operate within 180 to 270 days - meaning sometime between March and June, regardless of whether it seeks bankruptcy protection.

The report also said the likelihood of a filing by mid-September was high unless cuts are made. The report noted that US Airways is required to make cash contributions of $130 million to its employee pension plans on Sept. 15.

Failing to make them could lead to liens or other penalties from the Internal Revenue Service, and cause lenders to seek repayment of their liabilities. That would create the equivalent of "a run on the bank," the report emphasized. "If any one of them begins executing on these capital calls, they all will, and the airline will fail."

At the end of September, US Airways also must meet provisions of a series of covenants on its federal loan guarantee package, and it must satisfy lending requirements of aircraft companies including Bombardier, Embraer and General Electric.

If it missed those covenants, the federal Air Transportation Stabilization Board would be able to call the remaining portion of its $900 million loan "immediately," the report said.

"Unless the company is able to demonstrate that it has a viable business plan, the A.T.S.B. would have no reason to continue providing financing," the report stated, "and would be better served by having its loan repaid with the cash the company has today. At that point, the company would cease to operate."

The loan board has shown a past willingness to negotiate, rather than take such drastic action.

Earlier this year, the board and US Airways agreed on a series of revisions in the terms of the airline's seven-year loan package. US Airways made an early payment and pledged that it would substantially reduce its losses this year and post an operating profit next year. If the covenants had not been changed, US Airways would have been in default.

Jim

 

[hp_fa]

I can buy that PHX is more expensive then ABE and maybe the same as CLT and PIT, but the problem of the whole east coast from BOS to Northern VA remains. Unless you are in management or a pilot, HP wages will likely be unliveable.

If I were a 10+ year employee at U, I would be insulted at any suggestion that I voluntarily leave the job I spent years doing so they can reduce my wage below the amount I need to make ends meet.

 

[USA320Pilot]

The 3,400-member pilots' union refused to comment on the findings, which were distributed to its members. But a spokesman, Jack Stephan, said the pilots "do not disagree in principle with the conclusions reached by our investment banker."

Respectfully,

USA320Pilot

 

[USA320Pilot]

Pilots's union agrees US Airways finances are dire

Complete Story

But the airline and a University of Pittsburgh business professor who's been monitoring the negotiations both praised the union banker's report.

"I think the situation is as dire as that quotation suggests," Professor Marick Masters said. "All along, the company has been forthright in the precariousness of its situation."

"We concur with the conclusion that it is in the best interests of the company and employees that we quickly reach consensual agreements with all of our labor unions so that we can achieve the necessary cost reductions and can fully implement our transformation plan," the airline said in a statement.

Respectfully,

USA320Pilot

 

[USA320Pilot]

US Airways Could Fail Next Month

As part of its transformation plan, US Airways said yesterday it would end service on 20 routes from Pittsburgh, including international service to London and Frankfurt as well as many other, smaller cities.

The route cuts were inevitable, aviation consultant Doug Abbey said, because Pittsburgh did not have enough of a local market to support a hub for US Airways. "Pittsburgh has become eclipsed by growth in Philadelphia, so it was seen as redundant," Abbey said. The end of the Pittsburgh hub has "been a long time coming."

Complete Story

Respectfully,

USA320Pilot