Us Airways Debt To Be Rated Junk Soon?

[4merresrat]

The company is in sad finiancial shape because of the poor leadership it has had.... and the leaders were allowed to run off with millions of dollars that the company couldn't afford to pay...

You almost got it right Res Agent. . . The company is in dire shape because of the poor management, the world situation (terrorist threats, oil price) AND because of the unions, and the entitlement mentality of the unioin emloyees, abuse of the system, and out of control payscales that the market can no longer bear.

 

[legacy-to-LCC]

"Standard & Poor's rates US Airways' $5.8 billion debt at CCC+ and negative, meaning that it is just above junk status -- and could be downgraded."

http://www.pittsburghlive.com/x/tribune-re...s/s_204759.html

I dont understand how some of the people who post here write such things like, gee, management is hiding profits from the market and employees so the unions will agree to give backs etc...

There is nothing to hide people.. this company is on the friggen ropes. If US Air debt gets dropped one more level, it becomes junk, wallstreet lingo for WORTHLESS!!

The only thing I have to say is that if you are somehow living under the false pretense that everything is just rosey, and that all the losses US Air is posting is just a white wash to get unions to fork over more cash, you are sadly mistaken.

The only silver lining I see is that, Im sure this old boat could be kept afloat for another year or two if you guys give mgmt what they want. Enough time to get some new skills and find a new job. Also, Bronner and Lakefield wont be walking away with your pension funds.. Not this time.

usair begins with u,
you mean...it's not a big financial hoax??? they [management] aren't hiding profits from the employees so they can secure more cuts??? i mean, don't you think we can compete effectively and successfully with outdated workrules and compensation scales??? this isn't one big ploy against the employees???
underneath my extreme sarcasm is a note of gratitude: thank you for being a sane voice and describing our situation accurately, however ugly!!! too many people are drinking the union kool-aide...i guess it must be refreshing until reality hits and usair (and their jobs) are no more!!!
again, many thanks,
pjn

 

[Heinrich]

I wonder if it might be possible to turn this topic into something interesting into more of the same.

Who's currently financing the E-170s and CRJs? Isn't GECAS doing some and didn't the South American government or was it Embraer itself who are financing the rest?

What exactly happens when the credit rating goes even lower?

 

[4merresrat]

. . .
What exactly happens when the credit rating goes even lower?

Yes, great question, does anybody know the reprecusions if U does get dropped to junk bond status? The only thing I have heard is somethiing about we can't accept credit cards when people make bookings because they don't trust us to be able to deliver the goods, that we might go bankrupt and the customers would lose their money, or something like that. Anyone know the details?

 

[delldude]

from lakefield's point of view,he's stated GECAS has said if we do not get labor costs in line they will pull financing for things among which the RJ'S are part of.if that happens it compromises the atsb loan agreement.
bruce got them to hold off until september.hence the great urgency.

 

[AP Tech]

"outdated compensation scales"??????? I am not really sure what scales you are refering too.....I can only speak for mechanics but our hourly compensation is among the lowest of all carriers, LCC & legacy. Last week we got a .49 cents an hr raise and today we go the benifits summary showing the cost increase.

What is the minimum hourly wage we should work for.........

 

[totobird]

Listen, we have all had 3 years since 9/11 to get our ducks in a row before USAirways goes under. Shame on anybody who has not prepared for the stark reality that is facing our airline.
There are too many negatives for this company to survive as it is.

 

[FWAAA]

I've got news for the Pittsburgh journalist: U's debt (at CCC) is already classified as "junk." The airport bonds are just ahead of being labeled "junk" (as they are currently at BBB (just north of junk status)

Explained here:

http://www.dows.com/Publications/Junk_Bond_Ratings.htm

U's bonds can't get much lower (until it defaults).

 

[4merresrat]

Listen, we have all had 3 years since 9/11 to get our ducks in a row before USAirways goes under. Shame on anybody who has not prepared for the stark reality that is facing our airline.
There are too many negatives for this company to survive as it is.

Heads buried in the sand.

 

[jimntx]

Yes, great question, does anybody know the reprecusions if U does get dropped to junk bond status? The only thing I have heard is somethiing about we can't accept credit cards when people make bookings because they don't trust us to be able to deliver the goods, that we might go bankrupt and the customers would lose their money, or something like that. Anyone know the details?

The main (and most damaging) effect will be that US Airways will have to pay the highest interest rates when trying to borrow working capital. Also, they wouldn't be able to float a bond issue even if they wanted to--to raise money to buy aircraft for instance. The companies, such as GECAS, get to stick all kinds of burdensome covenants on any loan they make to US Airways.

A lot of companies have to borrow short-term funds to "tide them over" until credit card payments come in, for instance. And, in the airline business where the majority of ticket purchases are made with credit cards, this can be a problem if you are paying high interest rates for those short-term funds. Not good, not good at all.

The credit card companies might start refusing to accept US Airways charges only if the company's demise became imminent and evident. And, since they are almost all owned by major banks and tend to have the inside financial scoop, if they start doing that, start packing up your desk. And, I'm not trying to be unpleasant, it's just a major warning sign.

 

[AP Tech]

Three years to prepare.....I have been in preperation since day one!!!!!!!

 

[to much time to quit]

Three years to prepare.....I have been in preperation since day one!!!!!!!

The sad thing about it is about 80% of our coworkers will be selling their houses and some cars within 6 months of the finale. Thats were the last YES vote will come from. :down: Unprepared people buying and buying like they have a secure job for the future. Hopefully when the airbus ruling arrives we'll know one way or another.

 

[delldude]

The sad thing about it is about 80% of our coworkers will be selling their houses and some cars within 6 months of the finale. Thats were the last YES vote will come from. :down: Unprepared people buying and buying like they have a secure job for the future. Hopefully when the airbus ruling arrives we'll know one way or another.

JULY 31ST- GOES TO 3 MEMBER PANEL FOR A DECISION

 

[Winglet]

4merresrat, how do you feel about 1 employee taking a cool 7.5 million (that they'll admit to . . who knows how much more) for 18 months of doing NOTHING.

 

[4merresrat]

4merresrat, how do you feel about 1 employee taking a cool 7.5 million (that they'll admit to . . who knows how much more) for 18 months of doing NOTHING.

To be honest, I don't understand all the ramificiations, and what the big wigs do. I feel they have their conscience to live with, and I suppose they are under some kid of watchful eye of the gov't whatever, that if they engage in illegal activity, they will be found out. But, I do understand that CEOs and the like always get those golden parachutes, that is par for the course. I have said in my post, I do believe we have been poorly managed, but I believe that is just one part of the equation, I believe unions have had a part of it too. Call me naive if you like.