Us Air To Reduce Iam-fsa Positions

[to much time to quit]

The cost reduction targets would be any labor union who does not have a new collective bargaining agreement and facility/aircraft lessors.

As I have said before, the company has once again hired the Seabury Group and FTI Consulting to work with it through the next filing and bankruptcy specialists from the law firm of Arnold and Porter.

“Stop dragging your feet or hoping that Chapter 11 will help you,â€￾ he said. “It certainly will not.â€￾ If the airline fails to win ratified concession deals well before Sept. 30, the company faces a “series of consequencesâ€￾ with the Air Transportation Stabilization Board and its other financial partners. “Rather than risk those consequences,â€￾ which could destabilize the airline’s finances and hurt employees, the company may have to make another trip to bankruptcy court, Aviation Daily reported.

In conclusion, US Airways does have the cash-on-hand to file for bankruptcy, it has hired the advisors to work on this alternative, and the financiers and federal government now appear to be on-board with the plan.

Respectfully,

USA320Pilot

Let them go ahead and file, we aint scared. Everyone should have been smart enough this time not to buy any of their worthless stock. :down: Many of us are tired of the revolving threats and new termination dates. If you keep threatening your children with a punishment every time they misbehave and never follow thru, your threats mean NOTHING.

 

[tadjr]

Everyone can be replaced.
Any craft throws up a line at this point and time is going to get creamed.

Management "reserves the right to contract out any or all work covered by the CBA (Collective Bargaining Agreement), if by doing so, the Company is able to accomplish the work more economically"


And some are going to get creamed even IF they APPROVE the company offer.
ASI, Evergreen, Ogden Allied, STAR CONTRACTING COMPANY. Whats to prevent the company from hiring one or starting one of their own to lower the costs and replace those who are left who THOUGHT they'd be making $13.10 an hour? Would the pilots be willing to settle for this little line in their contract?
If this is part of the proposal for a group who is willing to talk with the company, what are they going to do to those who dont talk thats worse? :down:

 

[ClueByFour]

In conclusion, US Airways does have the cash-on-hand to file for bankruptcy, it has hired the advisors to work on this alternative, and the financiers and federal government now appear to be on-board with the plan.

Please provide a published source that indicates that either the federal government (nee the ATSB) is on-board with such a filing?

But hey, let's accept the premise that U is somehow going to talk the ATSB (in an election year) into changing the rules of the game and allowing another Chapter 11 filing to go forward with the idea of abrogating contracts and nothing more (just for the sake of hypothesis).

U will probably go in with at least a billion in cash, and no more than 1.5 quarters removed from turning a profit. So that's roughly what the much larger previous entitiy went in with (or equal if you add in the DIP) and not far removed from a profit.

Do you really think a judge will then find that abrogation of existing contracts is "necessary to permit reorganization?"

It won't happen. That's the fallacy with a "prepackaged" bankruptcy.

S1113 and 1114 are perhaps the harshes portions of the BK code, specifically to keep the scenario you describe from happening (again, if you count Eastern and Lorenzo).

Plus, even if it did, the bankrupt entitiy would never survive a work action by the mechanics. And Bronner probably lacks the stomach for it (and, with that much cash on hand, he can cash out and get his investment back at any time). And before we go into this again, the mechanics can destroy the S1113 test of "good faith" if the company prepares to replace them during a work stoppage.

 

[to much time to quit]

Please provide a published source that indicates that either the federal government (nee the ATSB) is on-board with such a filing?

But hey, let's accept the premise that U is somehow going to talk the ATSB (in an election year) into changing the rules of the game and allowing another Chapter 11 filing to go forward with the idea of abrogating contracts and nothing more (just for the sake of hypothesis).

U will probably go in with at least a billion in cash, and no more than 1.5 quarters removed from turning a profit. So that's roughly what the much larger previous entitiy went in with (or equal if you add in the DIP) and not far removed from a profit.

Do you really think a judge will then find that abrogation of existing contracts is "necessary to permit reorganization?"

It won't happen. That's the fallacy with a "prepackaged" bankruptcy.

S1113 and 1114 are perhaps the harshes portions of the BK code, specifically to keep the scenario you describe from happening (again, if you count Eastern and Lorenzo).

Plus, even if it did, the bankrupt entitiy would never survive a work action by the mechanics. And Bronner probably lacks the stomach for it (and, with that much cash on hand, he can cash out and get his investment back at any time). And before we go into this again, the mechanics can destroy the S1113 test of "good faith" if the company prepares to replace them during a work stoppage.

Nice post, but I would be willing to bet "someone" here will attempt to pick it apart in hopes of saving there cushy job. 😉

 

[ClueByFour]

Would the pilots be willing to settle for this little line in their contract?

Point of differentiation: the pilots already do this with the scope clause.

The difference is that if the CWA did it, the entire ship would go down, whereas the scope provisions allow the top %51 of the pilot group to continually throw the bottom %49 under the bus.

It just takes longer.

 

[delldude]

700UW:

700UW said: "US does not have the cash on their own to go into Ch 11."

USA320Pilot comments: US Airways Group's cash position on June 30, 2002, was $602 million while the company's operating cash flow was a negative $1 million per day during the second quarter (See Story). The company filed for bankruptcy protection on August 11, 2002 with a cash balance of about $500 million.

When the company announced the filing they also announced a debtor-in-possession (DIP) financing agreement for $500 million led by Credit Suisse First Boston and Bank of America (See Story).

That provided US Airways, a larger company than today, with about $1 billion in cash.

Yesterday, US Airways reported it ended the second quarter with total restricted and unrestricted cash, cash equivalents and short-term investments of approximately $1.73 billion, including $975 million in unrestricted cash, cash equivalents and short-term investments. US Airways began the quarter with an unrestricted cash balance of $978 million, so the company’s available cash balance remained steady during the second quarter.

USA320Pilot concludes: US Airways currently has the funds available to file for a pre-packaged bankruptcy that would not require DIP financing to restructure. The company does not want to seek this route, but if necessary, management is working on a plan to keep the current security in place and work with the key stakeholders to restructure.

In particular, the ATSB, GECAS, Embraer, Bombardier, and Airbus apparently have agreed to work with the airline.

The cost reduction targets would be any labor union who does not have a new collective bargaining agreement and facility/aircraft lessors.

As I have said before, the company has once again hired the Seabury Group and FTI Consulting to work with it through the next filing and bankruptcy specialists from the law firm of Arnold and Porter.

In regard to the financiers, who are beginning to turn up the heat on labor, according to Aviation Daily, "The airline was able to buy itself a little bit of time with regard to its planned RJ deliveries thanks to new “interim†agreements with GE, Embraer and Bombardier. Last month, it received a tentative green light from the companies to continue taking deliveries of the new RJs following a May credit downgrade. The companies will now provide RJ financing through Sept. 30."

“Stop dragging your feet or hoping that Chapter 11 will help you,†Bruce Lakefield said. “It certainly will not.†If the airline fails to win ratified concession deals well before Sept. 30, the company faces a “series of consequences†with the Air Transportation Stabilization Board and its other financial partners. “Rather than risk those consequences,†which could destabilize the airline’s finances and hurt employees, the company may have to make another trip to bankruptcy court, Aviation Daily reported.

In conclusion, US Airways does have the cash-on-hand to file for bankruptcy, it has hired the advisors to work on this alternative, and the financiers and federal government now appear to be on-board with the plan.

Respectfully,

USA320Pilot

The cost reduction targets would be any labor union who does not have a new collective bargaining agreement and facility/aircraft lessors.

so you are telling us that IF the unions don't get miffed and walk...and the facilities and aircraft lessors don't tell U to go pound salt after being porked for a SECOND TIME THAT ALL WILL BODE WELL?
doesn't the BK have to be approved by a creditor board??
i don't seriously think a BK judge can tell a facility or a/c lessor they have to participate.
he may abrogate a union contract but thats about it.

 

[tadjr]

Point of differentiation: the pilots already do this with the scope clause.

The difference is that if the CWA did it, the entire ship would go down, whereas the scope provisions allow the top %51 of the pilot group to continually throw the bottom %49 under the bus.

It just takes longer.

CWA has scope too. It currently allows CARs and skycaps to do some jobs that used to be agent jobs. With the proposed changes it would mean EVERYTHING is up for grabs. Mesa flying 737s or 767s would be the equivalent. Dont think that would fly. :down:

 

[USA320Pilot]

DellDude:

DellDude said: "i don't seriously think a BK judge can tell a facility or a/c lessor they have to participate. he may abrogate a union contract but thats about it."

USA320Pilot comments: The bankruptcy code provides the debtor with three options regarding lease and other financial agreements. The debtor can reaffirm the current agreement, the debtor can reject the current agreement, or the parties can re-negotiate the terms. If the lessor or other party does not agree to the new terms required by the debtor than the agreement can be terminated, which is what occurred between United and Atlantic Coast Airlines.

Therefore, US Airways can unilaterally reject excess gates in places like Buffalo or the Charlotte Maintenance facility, which is exactly what the company did in Pittsburgh 23 minutes prior to exiting bankruptcy.

In regard to labor agreements, it's my understanding that the bankruptcy court will likely side with the debtor and the creditors committee to ensure the company can become solvent.

The big challenge for labor in bankruptcy is arguing how a failed company can pay above market rates for pay and benefits for a failed company.

Like it or not so far this year the LCCs are making money and every legacy carrier is losing money, thus, I believe any union who enters bankruptcy without a deal will get one worse than could have been negotiated before the filing.

Respectfully,

USA320Pilot

 

[AP Tech]

Although I hate to "lower" myself and reply to anymore posts on this forum I believe we are at the lower if not the lowest end of the scale as far as wage rates. And that includes Legacy and LCC. New hires at JB are starting out higher than our current rates at U after 5 yrs.

Once again I will be deemed a "naysayer" by the company folk.......sorry I have an opinion.

 

[USA320Pilot]

AP Tech:

AP Tech said: "I believe we are at the lower if not the lowest end of the scale as far as wage rates. And that includes Legacy and LCC. New hires at JB are starting out higher than our current rates at U after 5 yrs."

USA320Pilot comments: Wage rates are just one part of the compensation package as witnessed by the company's opening proposal to the CWA. Nonetheless, can you give me specific examples for different work groups?

Respectfully,

USA320Pilot

 

[ClueByFour]

Ask the guys at Midway. You understanding is incorrect. It also assumes that the creditors committee does not feel as if it's loss cannot be recouped by liquidation.

Bronner can get his now, Embraerer and GECAS can place the RJs elsewhere, leaving Airbus. And the latter two have already set limits on what they'll be on the hook for, while the former probably won't want to do another bankruptcy. His money is better invested elsewhere.

The big challenge for labor in bankruptcy is arguing how a failed company can pay above market rates for pay and benefits for a failed company.

Well, actually that's not the challenge, as "market rates" are not one of the tests for abrogation in 1113/1114. But let's assume that it is: it strikes this observer that U's pilots are not that far below (or a shade above) what LUV pilots make on identical equipment, LUV's FAs are now better compensated than their U counterparts, and it's my understanding (although I'm sure an IAM-M member can correct me if I'm wrong) that the LUV mechanics have a superior compensation package in either rates, benefits, or both than their U counterparts.

Oh, and then there is the aforementioned "necessary to reorganize" litmus test, which would make for a rather amusing oral argument from a company that turned a 34 million dollar profit in the 2nd quarter.

And if you really believe that a union with a letter going in will come off okay, I suggest you might be well served by recalling the fate of the ALPA pension.

 

[mweiss]

Oh, and then there is the aforementioned "necessary to reorganize" litmus test, which would make for a rather amusing oral argument from a company that turned a 34 million dollar profit in the 2nd quarter.

Oh, come on. You know that Q2 is the best quarter in the year. It's not that hard to make a believable argument.