Us Airways And Atsb Restructure Loan
- Thread starter JayBrian
- Start date
- Banned
- #32
By they last time I check, us airways ordered the EMB170s, not GECAS, GECAS is only financing them, so please explain to me how a company that does not own or have the planes on order can sell them or take them to UAL?
Now I know GECAS is going to purchase 66 of all the RJS us ordered and then lease them to US, but what about the rest?
From GECAS web page:
US Airways Places Record Regional Jet Order with Bombardier and Embraer
May 12, 2003
ARLINGTON, Va., May 12, 2003 - US Airways today announced an agreement to purchase a total of at least 170 regional jets from Bombardier Aerospace of Canada and Embraer of Brazil. Sixty-six (66) of the aircraft will come from existing orders GE Capital Aviation Services (GECAS) has placed with both manufacturers.
The financial terms of the agreements with the airline and the manufacturers are confidential.
US Airways is the nation's seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Mexico, the Caribbean and Europe. US Airways, US Airways Shuttle, and the US Airways Express partner carriers operate over 3,300 flights per day, with US Airways Express wholly owned subsidiaries and affiliate carriers operating more than 60 percent of those flights. For additional information on fares and schedules, visit US Airways online at usairways.com.
Now I know GECAS is going to purchase 66 of all the RJS us ordered and then lease them to US, but what about the rest?
From GECAS web page:
US Airways Places Record Regional Jet Order with Bombardier and Embraer
May 12, 2003
ARLINGTON, Va., May 12, 2003 - US Airways today announced an agreement to purchase a total of at least 170 regional jets from Bombardier Aerospace of Canada and Embraer of Brazil. Sixty-six (66) of the aircraft will come from existing orders GE Capital Aviation Services (GECAS) has placed with both manufacturers.
The financial terms of the agreements with the airline and the manufacturers are confidential.
US Airways is the nation's seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Mexico, the Caribbean and Europe. US Airways, US Airways Shuttle, and the US Airways Express partner carriers operate over 3,300 flights per day, with US Airways Express wholly owned subsidiaries and affiliate carriers operating more than 60 percent of those flights. For additional information on fares and schedules, visit US Airways online at usairways.com.
USA320Pilot
Veteran
- May 18, 2003
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Cosmo:
Cosmo asked: "With the auditors' qualified opinion of US Airways as a "going concern" (as contained in the carrier's SEC Form 10-K filed today), will that prompt the ratings firms to again lower US Airways ratings another notch? And if so, will that induce GECAS to take its CRJ-700s and EMB-170s to United or another carrier, thereby causing US Airways' "Transformation Plan" to go up in smoke?"
USA320Pilot comments: Maybe, that's why ALPA is going to grant RJ scope relief to permit the sale of PSA, transfer of RJ delivery positions to affiliate carriers. There have been discussions on this issue for the past two months. Expect a deal shortly.
Furthermore, there are some observers who believe GECAS is orchestrating this as a means to stabilize US Airways, help United emerge from bankruptcy, and then permit a corporate transaction to proceed.
Regardless, it will be interesting to see how things turn out. What's good news is that US Airways obtained ATSB relief, while other carriers have had their loan guarantee rejected, some multiple times.
Regards,
USA320Pilot
Cosmo asked: "With the auditors' qualified opinion of US Airways as a "going concern" (as contained in the carrier's SEC Form 10-K filed today), will that prompt the ratings firms to again lower US Airways ratings another notch? And if so, will that induce GECAS to take its CRJ-700s and EMB-170s to United or another carrier, thereby causing US Airways' "Transformation Plan" to go up in smoke?"
USA320Pilot comments: Maybe, that's why ALPA is going to grant RJ scope relief to permit the sale of PSA, transfer of RJ delivery positions to affiliate carriers. There have been discussions on this issue for the past two months. Expect a deal shortly.
Furthermore, there are some observers who believe GECAS is orchestrating this as a means to stabilize US Airways, help United emerge from bankruptcy, and then permit a corporate transaction to proceed.
Regardless, it will be interesting to see how things turn out. What's good news is that US Airways obtained ATSB relief, while other carriers have had their loan guarantee rejected, some multiple times.
Regards,
USA320Pilot
USA320Pilot
Veteran
- May 18, 2003
- 8,175
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700UW:
GECAS is threatening to cancel some of US Airways' RJ financing, thus the need for scope relief. The financier has an exit clause in the RJ contract, thus they can.
United is attempting to torpedo the US Airways RJ deal to obtain a Dulles solution. The United plan is to transfer US Airways 16 70-seat and 16 50-seat RJ positions to Chautauqua and Republic and have these RJs flown as United Express feed.
Will it happen? Maybe. ALPA is trying to prevent that from happening and for these delivery positions to go to Mesa, Chautauqua, or TSA, as US Airways Express jets.
We should know more by the end of next week's MEC meeting.
Regards,
USA320Pilot
GECAS is threatening to cancel some of US Airways' RJ financing, thus the need for scope relief. The financier has an exit clause in the RJ contract, thus they can.
United is attempting to torpedo the US Airways RJ deal to obtain a Dulles solution. The United plan is to transfer US Airways 16 70-seat and 16 50-seat RJ positions to Chautauqua and Republic and have these RJs flown as United Express feed.
Will it happen? Maybe. ALPA is trying to prevent that from happening and for these delivery positions to go to Mesa, Chautauqua, or TSA, as US Airways Express jets.
We should know more by the end of next week's MEC meeting.
Regards,
USA320Pilot
RSA will fund it.USA320Pilot said:
GECAS is forcing it.
UAL (and creditors) will agree to it.
ATSB will force it.
ALPA will agree to it.
S&P will help by maintaining credit ratings.
DOJ will sign off on it.
Will God himself make this UCT so?
Interesting how everyone is involved - none of whom will talk about it.
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
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Judging by the clause in the agreement that was changed, the transaction will be either Chapter 7 or a slow bleed (a la Pan Am).USA320Pilot said:
Yeah... You know, leaks which tend to be true usually are reported in many different places, and the rumor is quickly followed by the event. For example, Jet Blue had been rumored to be looking around the Caribbean, and maybe at new transcons... Those rumors came true within a month. A few weeks ago, a leak was reported on about Fred Reid heading up "Virgin USA". Today, only a few weeks later, that rumor was substantiated.Cosmo said:Except to a certain US Airways captain!
Rumors which tend to hang around for YEARS, and are only narrowly reported (i.e. one person, one place) tend to not happen. I believe the UCT fits this category, which is just one of many reasons why I beleive it will not occur.
ClueByFour
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- Aug 20, 2002
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He has also stated on numerous occasions that he'll sell it if things don't turn around.USA320Pilot said:
He has retained Morgan Stanley to shop parts around.
If we believe your theory, he's going to sell the wholly owned carriers and the E-jet delivery slots, which are the future core assets of the carrier.
And, he just got clearance from the ATSB to do any/all of the above.
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
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The more I'm thinking about it, I can see how this will play out:
UAX (in the form of some carrier or another) is going to get the E-170 and CRJ-700 slots for Dulles. This basically gets them the same revenue they are getting from the codeshare, anyway.
DL gets the LGA terminal (courtesy of the CO rights of refusal). AA will take the shuttle slots, without aircraft.
Northwest will take some aircraft (330s, and some of the narrowbodies if the engines match) and the PHL hub (for transatlantic).
The feds take the DCA slots, and auction/dispose of them to pay some of the ATSB load.
JetBlue buys the BOS terminal.
This, plus cash on hand pays the loan and Bronner.
Oh, and rest assured that such a scenario has already been floated to the BOD, courtesy of Morgan Stanley.
UAX (in the form of some carrier or another) is going to get the E-170 and CRJ-700 slots for Dulles. This basically gets them the same revenue they are getting from the codeshare, anyway.
DL gets the LGA terminal (courtesy of the CO rights of refusal). AA will take the shuttle slots, without aircraft.
Northwest will take some aircraft (330s, and some of the narrowbodies if the engines match) and the PHL hub (for transatlantic).
The feds take the DCA slots, and auction/dispose of them to pay some of the ATSB load.
JetBlue buys the BOS terminal.
This, plus cash on hand pays the loan and Bronner.
Oh, and rest assured that such a scenario has already been floated to the BOD, courtesy of Morgan Stanley.
A few interesting points I noticed as part of this news release and the company's SEC Form 10-K filing for 2003:
The company's unrestricted cash and short-term investments as of 12/31/2003 totaled $1,287 million ($1.29 billion as reported elsewhere). The company's current unrestricted cash balance as reported in today's release (also likely cash and short-term investments) now amounts to $925 million. Subtracting the pay-down of $250 million, the company's net change in cash position over the past 72 days comes to -$112 million -- a burn of just over $1.5 million per day.
It should be said that this cash burn comes during the weakest period of the year and in the face of skyrocketing energy costs; the seasonal traffic improvement that comes with spring break travel and continues into the second and third quarters should help to ameliorate the problem of cash burn. WN's arrival at PHL will put additional pressure on revenue absent a restructuring of the business model, though. If the company is unable to stem the tide of red ink quickly enough, asset sales will be necessary to avoid violating the modified covenants of the loan agreement.
That said, the only assets which are likely to be saleable are the parts of the company which are profitable or could be used profitably by other airlines. The wholly-owned Express carriers (with capacity purchase agreements) are profitable, and MDA could fetch some money if it turns out to be profitable as well. Slots at DCA/LGA and terminal facilities could be used profitably by a number of other airlines. I see almost no one interested in mainline UAIR aircraft or employees as part of a sale; most of the network majors have planes parked in the desert and furloughed employees already. Some of the BOS gates are likely to go to jetBlue or Virgin USA (in my opinion), and I could certainly see DL and/or CO moving into US's LGA terminal (ironically leased from CO).
Honestly, I think the company's intent to implement its transformation plan by "midyear" and UAL's intent to emerge from bankruptcy around June 30 are indeed simply coincidental. June 30 is a good taget date for many businesses since it's the end of a quarter, and UAL has long said that they would remain in bankruptcy for 12-18 months after their filing in December 2002. Midyear is when the effects of WN's initial entry into PHL will be more quantifiable, and when WN's plans for PHL become clearer. It will also take months for the company to negotiate and implement any new agreements with employees that may happen.
The company's unrestricted cash and short-term investments as of 12/31/2003 totaled $1,287 million ($1.29 billion as reported elsewhere). The company's current unrestricted cash balance as reported in today's release (also likely cash and short-term investments) now amounts to $925 million. Subtracting the pay-down of $250 million, the company's net change in cash position over the past 72 days comes to -$112 million -- a burn of just over $1.5 million per day.
It should be said that this cash burn comes during the weakest period of the year and in the face of skyrocketing energy costs; the seasonal traffic improvement that comes with spring break travel and continues into the second and third quarters should help to ameliorate the problem of cash burn. WN's arrival at PHL will put additional pressure on revenue absent a restructuring of the business model, though. If the company is unable to stem the tide of red ink quickly enough, asset sales will be necessary to avoid violating the modified covenants of the loan agreement.
That said, the only assets which are likely to be saleable are the parts of the company which are profitable or could be used profitably by other airlines. The wholly-owned Express carriers (with capacity purchase agreements) are profitable, and MDA could fetch some money if it turns out to be profitable as well. Slots at DCA/LGA and terminal facilities could be used profitably by a number of other airlines. I see almost no one interested in mainline UAIR aircraft or employees as part of a sale; most of the network majors have planes parked in the desert and furloughed employees already. Some of the BOS gates are likely to go to jetBlue or Virgin USA (in my opinion), and I could certainly see DL and/or CO moving into US's LGA terminal (ironically leased from CO).
Honestly, I think the company's intent to implement its transformation plan by "midyear" and UAL's intent to emerge from bankruptcy around June 30 are indeed simply coincidental. June 30 is a good taget date for many businesses since it's the end of a quarter, and UAL has long said that they would remain in bankruptcy for 12-18 months after their filing in December 2002. Midyear is when the effects of WN's initial entry into PHL will be more quantifiable, and when WN's plans for PHL become clearer. It will also take months for the company to negotiate and implement any new agreements with employees that may happen.
PITbull
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- Dec 29, 2002
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I agree...ITRADE said:
Get ready to be sold, whether you give or not...USAirways mainline is out of here along with the wholly owns.
We can make it hard or easy for them...but they are going to sell the airline in pieces or in whole depending on how much labor bends over to make the deal. :angry:
will fix for food
Veteran
- Aug 20, 2002
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I am glad you are around .......you make the USAirways board easily the most entertaining of the boards on this site.
Good luck on your propaganda campaign...99.9% of the people here realize you are delusional , including me, but nevertheless, it makes you make for a fascinating read.
Good luck on your propaganda campaign...99.9% of the people here realize you are delusional , including me, but nevertheless, it makes you make for a fascinating read.
