TO ALL EAST PILOTS II

[BoeingBoy]

Hmmm. Quibbling.

Then you explain why the dynamic duo of Lakefield/Luth were unable to raise purely investment money from Feb till after the merger announcement if standalone US was such a terrific investment opportunity.....

Jim

 

[nycbusdriver]

Then you explain why the dynamic duo of Lakefield/Luth were unable to raise purely investment money from Feb till after the merger announcement if standalone US was such a terrific investment opportunity.....

Jim

I fully realize that I was not privvy to when and how each of these guys worked their magic. Personally, I became very suspicious that something was afoot when the doors didn't shut on Jan 15, 2005, when the ATSB deadline hit. OBVIOUSLY (well, to some) there was something going on behind the scenes for the ATSB to allow USairways to continue to play with their money. Maybe Air Wisconsin and Republic were paying close attention, so they decided to jump on a bandwagon that was already (but clandestinely) rolling along at full tilt. I realize that Lakefield told us flat out right around that time that there was NO MONEY out there for USAirways to expect to come along. Inside a few weeks, Air Wiskey and Republic made announcements, likely hoping to get their foot in the door to what could become a gold mine. We may never know exactly how it all transpired, but it is disingenuous to insist that it all came together in a few short days, weeks, or even months before the May announcement. The ATSB actions, or, more precisely inactions, in January, 2005, speaks volumes.

(Do you really think everything transpires in the media?)

 

[Phoenix]

Then you explain why the dynamic duo of Lakefield/Luth were unable to raise purely investment money from Feb till .......

Jim

Because the investors were holding out until the pilots squealed louder?

 

[BoeingBoy]

(Do you really think everything transpires in the media?)

Of course not - most corporate transactions happen behind the scenes before they ever see the light of day.

However, I do look at the timeline and wonder if it isn't more likely that the ATSB allowed some latitude for 2 reasons - the collateral was still worth at least twice the outstanding principal of the loan and the cash infusion that would flow from the Air Wisconsin deal announced a month later - than events that weren't announced till 4 months later.

But hey, if you want to believe that all those other investors were lined up the whole time, go right ahead. Wonder why they negotiated the investment portion of the Republic deal if they were having investment dollars shoved at them from all sides, only to turn Republic's money down upon emergence.....

Jim

 

[PITbull]

Those two individuals were probably 737 F/Os. The guy from the west came from the company that was not bankrupt.

As a practical matter, his 16 years would only get him an F/O slot on the smallest equipment with a twice bankrupt airline. The guy hired new at HP could hold the same equipment with his two months at (what was then) a growing airline with decent financials.

It's logical, just not to most of the East pilots (who, thru no fault of their own, picked the wrong horse over the years).

Where the East pilots got jacked was not capturing the east attrition. I believe (having read the decision) that had the East group not insisted upon DOH (or LOS, it's functionally the same thing) that they would have captured that attrition.

But to suggest that the situation is not logical because a 16 year guy is placed near (or even below) a 2 month guy completely ignores the fact that the 16 year old guy had, to be quite frank, picked the weaker (and bankrupt) airline.

In the real world, this is how things generally work (a measurement of the worth of someone's years of service in terms of the health of the company they work for).

Clue,

Here is the issue I think you missed...

Yes, east pilots along with east employees are employed with a twice bankrupt airline, unlike the west. However, the majority of the NET profit of $306 million made in 2006 came from the East operation. Reason being is that twice bankrupt east operation of the company positioned the company for a great 2006 year. Regardless whether U merged or not, the company was in a position to profit above most legacies specifically in light that a couple of carriers were still in BK trying to clear their balance sheet of 90's leases and labor contracts along with pension dumping. U east operation was healthy as hell going into 2006. Bankrupcy was just a legal strategy to get the company in a "healthy" position. BK was used as their ticket out of bad business plans and no accountability to anyone.

With the sacrifices made specifically from the east pilot group, there would have been no huge profits in 2006 for senior management and new investors to capitalize within 10 months of their initial investment, specifically senior execs who became instant millionaires.

Not bad for 10 months out of bk. I don't believe that west senior management would have made millions in stock if they stayed AWA and no merger....do you?

Nah, don't agree with the award. There was a lunatic IMO who handed down the decision.

 

[ClueByFour]

Clue,

Here is the issue I think you missed...

Yes, east pilots along with east employees are employed with a twice bankrupt airline, unlike the west. However, the majority of the NET profit of $306 million made in 2006 came from the East operation. Reason being is that twice bankrupt east operation of the company positioned the company for a great 2006 year. Regardless whether U merged or not, the company was in a position to profit above most legacies specifically in light that a couple of carriers were still in BK trying to clear their balance sheet of 90's leases and labor contracts along with pension dumping. U east operation was healthy as hell going into 2006. Bankrupcy was just a legal strategy to get the company in a "healthy" position. BK was used as their ticket out of bad business plans and no accountability to anyone.

The problem is that the financial picture at the time of the merger (and, it's at the time of the merger that is key, not what happened subsequently) indicates that the career expectation of the HP junior guy were favorable to the US junior guy.

Again--at the time of the merger. One company made money. One was bankrupt. What happened subsequently is irrelevant.

I agree with you on many of the reasons why the company (east) may have been where it was.

With the sacrifices made specifically from the east pilot group, there would have been no huge profits in 2006 for senior management and new investors to capitalize within 10 months of their initial investment, specifically senior execs who became instant millionaires.

It's not about the HP execs. It's about their pilots. Absent the merger, it's a safe bet that they continue to punch out small profits and take a few airframes every year (nobody but the East people really buy Parker's line that that HP would have been in trouble without the merger and with good reason--he never said it until after the merger was in flight and needed a bone to throw the east to keep the "saved your job" crap from the west to a dull roar). This would result in hiring and upward mobility on the list. Absent a merger, the East pilot basically has no career expectation, or certainly not one involving any growth.

Not bad for 10 months out of bk. I don't believe that west senior management would have made millions in stock if they stayed AWA and no merger....do you?

Nah, don't agree with the award. There was a lunatic IMO who handed down the decision.

While I agree with you about the HP management basically stealing from the concessions of the East group, I don't find the award to be the thinking of a lunatic. I think he should have given the East more of attrition. The "relative" slotting is correct (from the view of someone in the "real" world). The placement of the furloughed on the bottom of the list is also correct (they did not bring a current seat to the merger at the time it went down and should not be placed ahead of a pilot who did under any circumstances).

This is about a crappy situation where the East folks picked the wrong place to hang their hat over the years. That's unfortunate. It's also true and the HP folks should not pay a price because their upward mobility and career expectations were better at the time of the merger.

That said, going for DOH/LOS was greedy, shortsighted, and (as I told 320pilot) completely ignorant of past Nicolau decisions. There is no possible rationale, for instance, where you can put a guy who was furloughed at the time ahead of a guy who brought a job/seat. It's simply not something a rational person can defend in light of the ALPA merger policy. East tried it anyway (and, as I said above, I'm betting it cost them the attrition).

 

[nycbusdriver]

This is about a crappy situation where the East folks picked the wrong place to hang their hat over the years. That's unfortunate.

I MUST take exception to this one point you've made.

Many of us east folk did not pick this place to hang our hats. In fact, this particular east folk, in the late 1970s, sent an application to EVERY carrier in the country EXCEPT USAir. Even though raised in the northeast, I had no desire to work for what was even then perceived to be a bunch of "Guidos." I was blessed with 9 years at Piedmont Airline, at which I enthusiastically chose to hang MY hat (and career.)

But, to paraphrase Rakesh, I am where I am.

 

[ussnark]

Clue,

Here is the issue I think you missed...

Yes, east pilots along with east employees are employed with a twice bankrupt airline, unlike the west. However, the majority of the NET profit of $306 million made in 2006 came from the East operation. Reason being is that twice bankrupt east operation of the company positioned the company for a great 2006 year. Regardless whether U merged or not, the company was in a position to profit above most legacies specifically in light that a couple of carriers were still in BK trying to clear their balance sheet of 90's leases and labor contracts along with pension dumping. U east operation was healthy as hell going into 2006. Bankrupcy was just a legal strategy to get the company in a "healthy" position. BK was used as their ticket out of bad business plans and no accountability to anyone.

Just wanted to be certain everyone is on the same playing field.

US-BK1 was all about rearranging the business model as well as reducing costs and very well could have been symptomatic of severe financial stress (I don't think so).

US-BK2 was only about cutting labor costs (at least publically) and had little to nothing to do with going out of business or not. It was optional in that mgt found that the mere threat of bk caused the US labor folks to literally toss money and negotiating chips at mgt.

FWIW, the root beer folks were in BK 2 or 3 times in the late 80's early 90's for real money problems and were very close to bk post 11sep, so close, had the US bailout been slightly delayed, per their own testimony to Congress, they would have had to enter bk yet again.

It seems that some want to compare "financial health" by the use of "bk". I just wanted to point out that the apparent assumptions about bk need to be examined rather than just blithly assuming all bks are the same, at least if one is trying to make a financial point.

 

[BoeingBoy]

Only a couple of things wrong - a good day.....

The cash crunch was real during BK2, unlike BK1. Unless, of course, one believes that Lakefield was lying on filings with the court and SEC.

HP has had only 1 BK, not 2 or 3.

Jim

 

[EastUS]

HP has had only 1 BK, not 2 or 3.

Jim

I guess that only one "F" on the report card qualifies HP as an Honor Student?

 

[BoeingBoy]

I guess that only one "F" on the report card qualifies HP as an Honor Student?

It's better than two "F's".......

Jim

 

[skyflyr69]

Junebug172:
Lemme guess, you are a 2005 hire, got awarded a decent seniority and are grasping for more. What cracks me up is punks like you who think you deserve this!
How long do you think your airline would have lasted without this merger? You guys seem to forget quickly that Parker was quoted as saying that AWA was dying and needed this to survive. How you junior folks just don't get it!
Hey MORON, because without us, you were TOAST!
Now shut up and get back to your local fbo!

FROM ALPA NATIONAL WEBBOARDS:

Eric,

Longevity/Seniority, in a nutshell, is all you have. Hopefully, ALPA will make some steps to protect you in the future- when those (23) Y.O., soft eyed, bubble gum chewing, ALPA "Affiliated" guys become "wholly owned" and want their relative position in front of you. Or, for that matter another merger. Good luck.

Don't get me wrong, I believe we will find workable solutions and move forward.

But, for the mixed up, "AWA,We bought you bunch." Re-read the SEC filing: "US Airways Group has entered into agreements with new equity investors which have agreed to contribute a total of $565 million in equity to the reorganized US Airways Group."

AWA couldn't buy Doug an airline, or even the assests of an airline. AWA was indeed burning cash and was headed for Chapter 11. They had been there before, and absent a change, it was going to be, "here come's the Judge all over again."

Oh, and if you would have bought "AAA" that would have constituted a "change of control" triggering (age 50) PBGC benefits for 75% of our list. That did not happen!

For the "liquidation" crowd. Sorry, we wern't going anywhere. We've made too many short time (undeserving) CEO's millionaire's. Need proof? Just go ask your own.

Agreement to Merge with Subsidiary of U.S. Airways Group

On May 19, 2005, US Airways Group, Holdings and Merger Sub, a wholly owned subsidiary of US Airways Group, entered into the Merger Agreement. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Holdings, with Holdings continuing as the surviving corporation. The merger is expected to create the first full-service
airline with the consumer-friendly pricing structure of a low-fare carrier.
In the merger, holders of Holdings Class A common stock will receive 0.5362 of a share of new US Airways Group common stock for each share of Holdings Class A common stock they own, and holders of Holdings Class B common stock will receive 0.4125 of a share of new US Airways Group common stock for each share of Holdings Class B common stock they own, on the terms specified in the Merger Agreement.
The merger is one of a series of transactions that require the approval of the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, in the pending bankruptcy proceeding of US Airways Group and its domestic subsidiaries. The other transactions
that must be approved by the bankruptcy court, as part of a comprehensive plan of reorganization of US Airways Group and its domestic subsidiaries, include receipt by US Airways Group of new equity financing concurrently with the merger. US Airways Group has entered into agreements with new equity investors which have agreed to contribute a total of $565 million in equity to the reorganized US Airways Group,
subject to a variety of conditions, including confirmation of the plan of reorganization and completion of the merger. The merger is a key component of the plan of reorganization and is also conditioned upon, among other things, the receipt of at least $375 million from these equity investors. The plan of reorganization contemplates the cancellation of existing US Airways Group common stock and the issuance of new shares of reorganized US Airways Group upon emergence from the bankruptcy proceedings and in connection with the merger. On June 30, 2005, US Airways Group filed the plan of reorganization and its related disclosure statement with the Bankruptcy Court.
Assuming that US Airways Group receives $565 million in equity financing at the effective time of the merger, we expect that former America West Holdings stockholders will hold approximately 37% of new US Airways Group common stock outstanding immediately following the merger. Certain former US Airways Group creditors and new equity investors as a group will hold approximately 11% and 52%, respectively, of new US Airways Group common stock outstanding immediately following the merger. In each case, those percentages are subject to dilution as a result of any additional equity issuances, including as a result of the proposed rights offering discussed below, and are subject to certain assumptions concerning the likely exchange of certain convertible debt and securities that are dilutive at the per share purchase price paid by the equity investors for new US Airways Group common stock shortly after the merger.
The merger cannot be completed unless Holdings’ stockholders adopt the merger agreement and approve the merger. The obligations of Holdings and US Airways Group to complete the merger are also subject to the satisfaction or waiver of several other conditions, including clearance from regulatory agencies. On June 23, 2005, the U.S. Department of Justice notified Holdings and US Airways that the Department has
completed its review of the proposed merger of the two airlines and that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 will expire without a formal request from the Department for additional information.
Source AMERICA WEST AIRLINES INC filed this Form 10-Q on 07/21/05.

:blink:

 

[ClueByFour]

It seems that some want to compare "financial health" by the use of "bk". I just wanted to point out that the apparent assumptions about bk need to be examined rather than just blithly assuming all bks are the same, at least if one is trying to make a financial point.

OK, forget the finances.

HP guys, for years, had been moving up their list. Planes were being acquired, pilots hired.

US lost half it's list and about half it's fleet. Downgrades a plenty and such.

At the time of the merger, that was the picture for both parties. Relatively speaking, the junior HP guys were in much, much better shape.