Us Airways Ceo 'upbeat' On Progress

[Heinrich]

I remember when the Air Midwest flight crashed 2 years ago everyone was predicting "the end" within a few months.

 

[Bob Owens]

Well I dont know what you would expect the CEO to say.

Does anyone remember the ads that EAL was running with its CEO giving a speech to a hangar full of smiling scabs about how EAL was on its way back?

Within weeks EAL was liquidated.

What do you expect the creditors and the CEO to say? "Give us these massive concessions so we can screw you out of an extra year of your lives? Are the leasing companies agreeing to give away their equipement for cut rate prices till 2011? If you were GE wouldnt you play along with the companies attempts to screw their workers? It sure beats having the planes sitting in the desert costing money instead of generating income.

 

[Tim Nelson]

Well I dont know what you would expect the CEO to say.

Does anyone remember the ads that EAL was running with its CEO giving a speech to a hangar full of smiling scabs about how EAL was on its way back?

Within weeks EAL was liquidated.

What do you expect the creditors and the CEO to say? "Give us these massive concessions so we can screw you out of an extra year of your lives? Are the leasing companies agreeing to give away their equipement for cut rate prices till 2011? If you were GE wouldnt you play along with the companies attempts to screw their workers? It sure beats having the planes sitting in the desert costing money instead of generating income.

[post="237965"][/post]​

Customarily, airlines keep the smile on the faces to secure every last red cent on the dollar as the attorneys put together the chapter 7 papers. I remember National Airlines at O'hare just put on a great sale and then the next day their employees came to work only to see a sign on the counter that read something like 'closed'. Management was nowhere to be found and there was nobody to answer questions. Nobody knew nothing.
More recently, Southeast airlines, flying out of Gary, put on a killer sale to florida. I read a report online where Southeast was projecting to make X amount of money next year...then they close their doors in a blink.

I imagine that if US AIRWAYS does fold within the next 8 weeks that 2 things will happen if history is our witness.
1. It will happen in an immediate and abrupt nature when the chapter 7 attorneys proclaim supper is ready, i.e., open for business in one hour and chapter 7 the next.
2. Many employees won't see it coming and might even be preaching all good things right up until the last hour. This is the truly sad part about it, I mean many employees may be clinging to a false hope at a time when they should have hedged themselves in other ways.

At any rate, one thing is for sure if US AIRWAYS gets out of this tailspin....wages/benefits at UA, AA, SW will be under attack due to reverse pattern bargaining that has been established by the IAM, TWU, etc. Southwest in particular is playing high stakes and if US does not go under I believe Southwest wil be overexposed in US territory and will take a terrible beating.

regards,

 

[funguy2]

See Story

Regards,

USA320Pilot

[post="237781"][/post]​

Well, first off, this article was not written by, published in, or quoted any of the only sources USA320Pilot would listen to, so I am not even sure why we have a thread on this article

When reading a periodical the best sources are key analysts like Merrill’s Michael Linnenberg, S&P’s Phil Baggaley, and Lehman’s Gary Chase. The only news reporters who truly have a handle on the inside information are Susan Carey of the Wall Street Journal, Michelline Maynard of the New York Times, Lynn Marek of Bloomberg News, and Dan Roberts of the Financial Times. I do not listen to anybody else because they are not informed, but the people listed above can directly speak with every industry CEO, if desired.

Next, the article states early on that creditors "support" the moves, but later notes that the airline must negotiate with the ATSB and find additional savings to satisfy GECAS. While I am sure the creditors are happy to see "progress," apparently their demands have not yet been met.

Surely Bombardier and Embraer work with the airline because nobody else can take the aircraft. If they had other customers able and willing to take US Airways' delivery positions, they would not be so "eager" to work with the company... They would take the money and run.

Lastly, I'll note the very bottom of the article stating that US Airways "hopes" to find an addtional $100mil in savings... Is there a union ready for Round 4?

 

[ClueByFour]

The key is that the creditor's, who have seen the company's finances and business plan, support the airline. The analyst's have not.

[post="237830"][/post]​

Huh. Which creditors?

GE is pulling airplanes and offering US money at rates that make the local loanshark proud.

The unsecured creditors won't see a dime in liquidation in any case.

Forget all that--are these the same folks who got torched with the last great "bankruptcy business plan?"

Boyd has it nailed.

 

[mweiss]

Tim, you are right on the money. And it is sad. But it has to happen that way, for numerous legal reasons. I got caught in one of those sorts of things before, and it doesn't feel good. Especially when the people you trusted were lying to your face for weeks. Even though they were legally required to do that, I still have trouble trusting them to this day.

 

[Smartest Loser]

I agree Tim, "Southwest will be overexposed in US territory and will take a terrible beating."

You have to ask yourself...Why now would they come to PHL, PIT and soon CLT...?? Because U's weak and has no staying power in their markets right now. Southwest knows if they don't finish U quickly it could be them running for cover.

SL

 

[Smartest Loser]

I want to see the business plan for increasing "Revenue"...!!!!

Then, I'll sign on.

SL

 

[Bob Owens]

Tim, you are right on the money. And it is sad. But it has to happen that way, for numerous legal reasons. I got caught in one of those sorts of things before, and it doesn't feel good. Especially when the people you trusted were lying to your face for weeks. Even though they were legally required to do that, I still have trouble trusting them to this day.

[post="238030"][/post]​

Its not confined to the airlines either. As I posted here over two years ago management has no fiduciary duty to employees, despite what they spew about "family, team etc".

I heard a story about a certain car rental company that had their HQ over in Westbury, Long Island. They try harder. Well when the company that was supposedly "Employee owned" was bought out obviously there was some concern. The CEO threw a big party at some fancy digs across the street to ally their concerns and gave an impassioned speach about what a great future the company has planned right there in Westbury. Of course he got a huge positive reaction. He thanked them, walked out the door and was never seen again. Cashed his last check. Didnt even come back to take his family pictures off his desk!!

The company promptly closed the headquarters in Westbury and laid off thosands of "owners".

 

[USA320Pilot]

In regard to the creditors supporting the company:

"We're working with the airline and expect to reach a consensual extension of the cash collateral agreement before the current agreement expires this week," Mark Dayton, the ATSB's executive director, said in a statement released by spokeswoman Brookly McLaughlin.

Analysts have said that if US Airways can survive the next few months and hang on until the busy spring and summer travel season, its long-term outlook will improve.

See Story

In addition to the ATSB, three other financiers have agreed to work with the airline:

-- A division of Citigroup recently assumed the "at risk" portion of the loan guarantee from BOA.

-- Bombardier and Embraer have agreed to deliver and arrange financing on 3 CRJ-700s and 3 EMB-170s, respectively. Specific delivery dates will be announced after the new ATSB deal is approved by the bankruptcy court on Thursday. In addition, it has come to my attention that there will be additional CRJ aircraft added to PSA's fleet during bankruptcy, which is more creditor support.

Other analysts and the news media are supporting the company too.

According to Dan Roberts of the Financial Times, many rivals were hoping that United and US Airways would go under permanently, reducing capacity and strengthening the position of those that remain. Instead, the two weakest players appear to be successfully navigating through the US bankruptcy system, despite several remaining hurdles.

See Story

Susan Carey of the Wall Street Journal wrote a column last Friday discussing US Airways' situation and some key excerpts from her column are listed below:

US Airways isn’t looking at selling assets, something it once studied, said Chris Chiames, senior vice president of corporate affairs. The issue "is what more needs to be done to our business plan to satisfy our backers and attract equity". Now that the company has achieved everything it sought in labor and pension savings, he said, "we have every confidence we’re going to meet any financial deadline in front of us."

Experts think US Airways is in danger but not yet a goner. Daniel Kasper, an airline economist for LECG LLC who has testified in U.S. Bankruptcy Court on behalf of US Airways management, said yesterday that "it’s a close ca;;, "But that the Cassandras (Cordle and Boyd for example) are going a bit overboard" in predicting the carrier’s demise.

"We believe US Airways US Airways is at least a near-term survivor," Lehman analyst Gary Chase said. Without further labor actions such as those that marred the Christmas holiday, he said US Airways "will be a factor in the industry for the foreseeable future."

I agree that Delta's announcement of SimpliFares will depress revenue, but it apparently has not scared off the ATSB who are reportedly close to announcing a new agreement with US Airways.

Regards,

USA320Pilot

 

[BoeingBoy]

In regard to the creditors supporting the company:

Analysts have said that if US Airways can survive the next few months and hang on until the busy spring and summer travel season, its long-term outlook will improve.

[post="238048"][/post]​

And analysts have said that US Airways is the "dead man walking". And even the analysts you mention aren't saying the future is assured, only "improved". Only time will tell which are right.

-- A division of Citigroup recently assumed the "at risk" portion of the loan guarantee from BOA.

[post="238048"][/post]​

Wrong, Citi assumed the "no-risk" portion of the loan guarantee - the Tranche A loan is backed by the taxpayers so there is zero risk.

-- Bombardier and Embraer have agreed to deliver and arrange financing on 3 CRJ-700s and 3 EMB-170s, respectively.

[post="238048"][/post]​

Bombardier stopped financing CRJ's before we entered BK2 - last June or July IIRC.

US Airways isn’t looking at selling assets, something it once studied, said Chris Chiames, senior vice president of corporate affairs.

[post="238048"][/post]​

Could it be because we don't get to keep any of the proceeds, unlike when US Airways was looking at selling assets?

Experts think US Airways is in danger but not yet a goner. Daniel Kasper, an airline economist for LECG LLC who has testified in U.S. Bankruptcy Court on behalf of US Airways management, said yesterday that "it’s a close ca;;, "But that the Cassandras (Cordle and Boyd for example) are going a bit overboard" in predicting the carrier’s demise.

[post="238048"][/post]​

Ah, the old "quote someone on the company's side as proof of how great things are" ploy. Something you did concerning the legality of an IAM strike if contract abrogation occured.

I agree that Delta's announcement of SimpliFares will depress revenue, but it apparently has not scared off the ATSB who are reportedly close to announcing a new agreement with US Airways.

[post="238048"][/post]​

The ATSB has no reason to be "scared" - they're keeping daily tabs on the operation and can tell quickly if they need to start worrying about their collateral covering the guaranteed part of the loan. Let's see what the new agreement says - if they're so supportive they should let US Airways use all of the cash collateral since there's enough non-cash collateral to cover their guarantee. Will they?

Jim

 

[funguy2]

Intersting how USA320Pilot throws his support completely behind Dan Roberts and Susan Carey simply because they share his viewpoint. Mike Boyd, and other analysts, have just as much access to the airline CEO's and revenue/cost information as the others, however, USA320Pilot discredits them solely based on the fact their opinion isn't the same as his. Spin, Spin, Spin...

What will he ever do if they should change their minds?

Oh yeah, I'll also note their was no response regarding the fact that this article was written by "uninformed" authors, in an "uninformed" publication, with "uninformed" experts.

 

[Tim Nelson]

supposedly "Employee owned" was bought out obviously there was some concern. The CEO threw a big party at some fancy digs across the street to ally their concerns and gave an impassioned speach about what a great future the company has planned right there in Westbury. Of course he got a huge positive reaction. He thanked them, walked out the door and was never seen again. Cashed his last check. Didnt even come back to take his family pictures off his desk!!

The company promptly closed the headquarters in Westbury and laid off thosands of "owners".

[post="238047"][/post]​

Agreed, corporate greed has no conscience in any industry. Top experts and consultants from this industry, separate from US AIRWAYS, are now being more bold and absolute in their forecast. The forecast from the entrenched industry experts is liquidation. The only question for them is will it be February or March.
Hopefully for the US AIRWAYS employees who wish to stay, USA320pilot knows more than Boyd and the other industry insiders.

regards,

 

[ClueByFour]

from http://www.forbes.com/home/feeds/ap/2005/0.../ap1743497.html

U.S. Bankruptcy Judge Stephen Mitchell said that "at bottom, it is clear that the debtor's financial position is so precarious that even with the relief being sought, there will still be grave questions as to whether it can survive."

The judge (the freaking judge) is barely holding out hope.

Rose-colored glasses at 11.

 

[jcavinato]

I was personally involved in Braniff with its first bankruptcy and sudden closure. It was predictible several months out. In the last several weeks the fuel suppliers would not deliver to a plane unless someone handed them cash. The company flew DFW-Tulsa round trips for $29 just to get cash to pay suppliers for fuel.

I don't hear anything that far down in this or other sites.