Piedmont4US
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AA's is hardly a shuttle, after all its mostly operated by American Eagle.ITRADE said:
Us Airways Said To Be Pursuing Big Asset Sales
- Thread starter Jon153
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Okay,
Plan C-
1- Sell the shutttle, it's loosing money right?
2- Sell commuters- to Mesa? they'll still service mainline.
3- Sell hub- Been trying to get out of PIT anyway.
We still have the cash and the service of the commuters, out of the expensive money loosing shuttle, out of PIT.
Plan D- Unions talk. Never happen- too much pride.
Plan C-
1- Sell the shutttle, it's loosing money right?
2- Sell commuters- to Mesa? they'll still service mainline.
3- Sell hub- Been trying to get out of PIT anyway.
We still have the cash and the service of the commuters, out of the expensive money loosing shuttle, out of PIT.
Plan D- Unions talk. Never happen- too much pride.
Piedmont4US
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I'm in more favor of D.a320av8r said:
Expanding mainline is the best option for US, and in order for that to happen work rule changes need to happen. Planes do no good if they are on the ground, and they need to be flown longer.
MarkMyWords
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Piedmont - I agree with you, but what is in the current contract that is prohibiting them from doing that? Nothing that I know of.
ITRADE
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Doesn't matter. The ERJ-135s means 20 or 25 high fare passengers that would have been on US Shuttle or DL Shuttle.Piedmont4US said:
Piedmont4US
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Its a problem when the unions don't want to even HEAR a plan. It was a slap in the face and it tells the airline "go cut money elsewhere". You can't change rules if they can't even be heard, let alone show the whole picture.MarkMyWords said:
Unions will get their wish, they will get concessions elsewhere.
MarkMyWords
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PI - I meant, what is in any union contract right now that stops the company from improving productivity or increasing flying? What is in the contract now that prevents the company from rolling the PHL hub or better utilizing crews?
Piedmont4US
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This is true. But you got to realize AAdvantage members want to be able to fly AA from LGA-BOS. We all know Delta and US are the shuttles most know about, and I still think US offers the best product in terms of a/c, amenites, terminal location, and ease of check-in.ITRADE said:
Wow... lots of stuff here...
1) US Airways is trying to meet ATSB loan covenents required of it in 6 months... 60 new airbuses, will not solve this problem. 60 new airbuses only add to the cash drain because US Airways will need to spend cash to lease them. Furthermore, they cannot seem to find profitable homes for their first 279 aircraft, let alone 60 more. Finally, 60 aircraft will not be operational by June. Furthermore, almost everybody agrees this industry has too much capacity in terms of aircraft and hubs. Adding 60 more aircraft and some mythical "westward expansion" is opposes the general direction of the industry.
2) This is the "carrot and stick" method of management. The "carrot" (which you may recall never gets reached) is the 60 airbus order. Naturally after further concessions are made, industry conditions would have deteriorated and the 60 aircraft order would have disappeared, and the US Airways employees would all be on USAviation.com talking about how they've been tricked again. Since the carrot did not work, here comes the stick. Do what I want, or I will beat you into submission.
3) Airline asset transfers usually occur in two ways: Bankruptcy court and by the acquirer approaching the acquired. In some instances, there is probably a quiet offering of assets (like PEOPLExpress did to divest itself of Frontier before its demise... I also suspect TWA was talking to folks that they would be willing to cooperate and get acquired... AA took the deal). Hubs have been bought and sold before... Eastern "sold" the Shuttle to Trump, who sold it to US Airways. Eastern also "sold" its PHL hub to Midway I. In both of these cases, aircraft, long-term leases on airport facilities (gates, ticket counters, offices). I suspect other items could go along with such a sale such as rez centers, spare parts/engines, and potentially simulators, even office furniture.
4) US Airways assets are diminishing in value every day... the sooner they are sold, the more they will go for. Furthermore, if UAIR sells assets outside of the BK court, they can (theoretically) redirect those funds into strengthening whatever is left. The problem is that if they sell any part of the company, what is left will hold little value anyway.
We know that PIT as a hub has little value. UAIR is looking for a way out, and nobody except may Ed Beauvais and Project ROAM are considering coming in. Maybe UAIR should consider selling some PIT assets to ROAM. Otherwise, we can see that several hubs with more O/D traffic than PIT have been abandoned over the past few years: Vangaurd at MCI, Midway at RDU, and America West at CMH. While these hubs were not as large as PIT, what it tells me is that three similar cities, with larger O/D traffic bases could not support smaller hubs. Makes things look bad for PIT.
The Shuttle, in my opinion, does hold some value, however not as the Shuttle. If I were interested in acquiring the Shuttle, I would not continue to fly LGA-BOS and LGA-DCA, but rather use the slots/gates/aircraft acquired to operate from LGA, BOS, and DCA to other cities, like NYAir did back in the mid '80's. However, you do have the pesky collateral problem... which would probably require than any funds received by selling the Shuttle go directly to paying off the ATSB loan. This is not the goal, the goal is to increase liquidity to meet ATSB covenents. I am not sure this meets that goal, unless the payback somehow alters the covenents.
That leaves PHL, CLT, and the wholly owneds... And none of these can be sold if US Airways is to survive. PHL is the revenue generator. CLT and Express are the low-cost units of the company. In fact, if PHL or CLT are sold, you can expect to see the rest of mainline wither and die, while the company reoganizes itself as an Express carrier for other airlines (perhaps whoever acquires CLT and/or PHL). This route also has risks in that most industry experts believe the industry is oversubscribed with Small Jet Providers, and point to ACAI as proof. So UAIR competing with the likes of Chautauqua, Mesa, and SkyWest for subcontract work is a dangerous proposition.
Likewise, if they sell the wholly owned Express carriers, its a short term cash boost, but long-term they get saddled with the high-cost portion of the company. Also, the division of the company that the future of the company is currently pinned to is gone... along with the predicted profits of this part of the Group.
5) I find it very interesting that Chip's secret sources didn't tell us this first... Seems to me like everything that Chip tells us doesn't happen, and the things that do happen, such as this leak to the media, Chip does not know about.
So, I am not sure where this leaves US Airways, other than labor takes it in the shorts again, or close-up shop, and try to preserve the value of what is left. If UAIR begins to sell pieces, I would expect the whole company to be sold in pieces. UAIR, and Dr. Bronner specifically, keeps more control over this process if he does it prior to Ch.7. He can attempt to fulfill his fiducery duties to both RSA and UAIR stockholders by selling assets, paying off debts, and distributing whatever is left to shareholders, including RSA (essentially what happens in Ch.7 with the added expense of court supervision and an armada of lawyers). Unfortunately, this would be the worst possible outcome for employees and the non-wholly-owned Express carriers.
Best of luck to all in this very very ugly situation.
1) US Airways is trying to meet ATSB loan covenents required of it in 6 months... 60 new airbuses, will not solve this problem. 60 new airbuses only add to the cash drain because US Airways will need to spend cash to lease them. Furthermore, they cannot seem to find profitable homes for their first 279 aircraft, let alone 60 more. Finally, 60 aircraft will not be operational by June. Furthermore, almost everybody agrees this industry has too much capacity in terms of aircraft and hubs. Adding 60 more aircraft and some mythical "westward expansion" is opposes the general direction of the industry.
2) This is the "carrot and stick" method of management. The "carrot" (which you may recall never gets reached) is the 60 airbus order. Naturally after further concessions are made, industry conditions would have deteriorated and the 60 aircraft order would have disappeared, and the US Airways employees would all be on USAviation.com talking about how they've been tricked again. Since the carrot did not work, here comes the stick. Do what I want, or I will beat you into submission.
3) Airline asset transfers usually occur in two ways: Bankruptcy court and by the acquirer approaching the acquired. In some instances, there is probably a quiet offering of assets (like PEOPLExpress did to divest itself of Frontier before its demise... I also suspect TWA was talking to folks that they would be willing to cooperate and get acquired... AA took the deal). Hubs have been bought and sold before... Eastern "sold" the Shuttle to Trump, who sold it to US Airways. Eastern also "sold" its PHL hub to Midway I. In both of these cases, aircraft, long-term leases on airport facilities (gates, ticket counters, offices). I suspect other items could go along with such a sale such as rez centers, spare parts/engines, and potentially simulators, even office furniture.
4) US Airways assets are diminishing in value every day... the sooner they are sold, the more they will go for. Furthermore, if UAIR sells assets outside of the BK court, they can (theoretically) redirect those funds into strengthening whatever is left. The problem is that if they sell any part of the company, what is left will hold little value anyway.
We know that PIT as a hub has little value. UAIR is looking for a way out, and nobody except may Ed Beauvais and Project ROAM are considering coming in. Maybe UAIR should consider selling some PIT assets to ROAM. Otherwise, we can see that several hubs with more O/D traffic than PIT have been abandoned over the past few years: Vangaurd at MCI, Midway at RDU, and America West at CMH. While these hubs were not as large as PIT, what it tells me is that three similar cities, with larger O/D traffic bases could not support smaller hubs. Makes things look bad for PIT.
The Shuttle, in my opinion, does hold some value, however not as the Shuttle. If I were interested in acquiring the Shuttle, I would not continue to fly LGA-BOS and LGA-DCA, but rather use the slots/gates/aircraft acquired to operate from LGA, BOS, and DCA to other cities, like NYAir did back in the mid '80's. However, you do have the pesky collateral problem... which would probably require than any funds received by selling the Shuttle go directly to paying off the ATSB loan. This is not the goal, the goal is to increase liquidity to meet ATSB covenents. I am not sure this meets that goal, unless the payback somehow alters the covenents.
That leaves PHL, CLT, and the wholly owneds... And none of these can be sold if US Airways is to survive. PHL is the revenue generator. CLT and Express are the low-cost units of the company. In fact, if PHL or CLT are sold, you can expect to see the rest of mainline wither and die, while the company reoganizes itself as an Express carrier for other airlines (perhaps whoever acquires CLT and/or PHL). This route also has risks in that most industry experts believe the industry is oversubscribed with Small Jet Providers, and point to ACAI as proof. So UAIR competing with the likes of Chautauqua, Mesa, and SkyWest for subcontract work is a dangerous proposition.
Likewise, if they sell the wholly owned Express carriers, its a short term cash boost, but long-term they get saddled with the high-cost portion of the company. Also, the division of the company that the future of the company is currently pinned to is gone... along with the predicted profits of this part of the Group.
5) I find it very interesting that Chip's secret sources didn't tell us this first... Seems to me like everything that Chip tells us doesn't happen, and the things that do happen, such as this leak to the media, Chip does not know about.
So, I am not sure where this leaves US Airways, other than labor takes it in the shorts again, or close-up shop, and try to preserve the value of what is left. If UAIR begins to sell pieces, I would expect the whole company to be sold in pieces. UAIR, and Dr. Bronner specifically, keeps more control over this process if he does it prior to Ch.7. He can attempt to fulfill his fiducery duties to both RSA and UAIR stockholders by selling assets, paying off debts, and distributing whatever is left to shareholders, including RSA (essentially what happens in Ch.7 with the added expense of court supervision and an armada of lawyers). Unfortunately, this would be the worst possible outcome for employees and the non-wholly-owned Express carriers.
Best of luck to all in this very very ugly situation.
AgMedallion
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Don't blame Dave. This crap has been brewing for at least ten years. U was a hodge podge of Mohawk/Allegheny/PSA/Piedmont with close-together hubs, many a/c types, over ten rez centers, and depended for survival on high fares in monopoly or near-monopoly markets. When times were good in the 90s, pre-recession and pre 9/11, U got 2 fools, Wolf and his trusty sidekick, Gangwal, who were hired to put some lipstick on a pig in an attempt to sell it to UAL. The chief fool never had much experience actually running an airline....just sprucing them up for sale to a bigger idiot, while collecting huge bonuses, stock options, etc. W&G could have tried to cut costs (assuming the unions would have agreed...doubtful since big profits were being made) but simply focused on slapping some new paint on a dump in an effort to make it more marketable. They're the ones U employees should save their wrath for. With WN moving into Philly, the party's over. I feel bad for U's hard working employees. They deserve better. 🙁
WorldTraveler
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you've hit it dead on, funguy2, on all five points. Although US' assets are diminishing in value, they do have value to other legacy airlines who will be able to figure out a way to acquire those assets. DL and NW both have way more cash on hand than they need now, although DL would probably be cautious about spending money while they are still losing it. On the other hand, a US failure will go along way towards helping DL recover. I see AA as probably the most likely acquirer of US assets from a strategic standpoint but I'm not sure they are capable of doing it. If any legacy airlines buy US' assets, it will undoubtedly cause the alliances that have been forged to be rethought.
ITRADE
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I'm not seeing where we disagree on LGA-BOS.Piedmont4US said:
But to make a point, the senior partner in the group is a Exex. Plat. on AA - flies about 125k a year. Lots of Europe flying. Lots of Shuttly flying.
Until a couple years ago, AA had no LGA-DCA shuttle. When we would go to hearings at the Federal Court in New York, we'd always hop on the US Shuttle and fly on up - at about $225 a pop each way. The partner hated DL and refused to fly their shuttle.
Now that AA has its own hourly service to LGA, he no longer flies the US Shuttle, but instead flies on the AA ERJs. Usually, a couple of people go along with him. I stick with the US Shuttle flights.
Whatnow?
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Sounds to me like Dave is STILL buying more time to figure out a Real plan. Blaming the unions for inept decisions has really got to stop. Everytime he's come crying to the Unions for more $$ and cuts...they've given in! Now he's at it again! How much more do the employees have to give to fund bad decisions he's making? The man really has to stop bashing the employees and restore what's left of any kind of morale with the employees!
WorldTraveler
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don't underestimate the value of US' network either. While the right aircraft might not be flying the right routes, US has some incredibly valuable assets. In response to another posting about what US employees should do, each one of you has to decide for themselves whether they have had enough (although the decision may be made for them). With unions, however, the decision is being made collectively. If there are asset sales, however, there may well be employees and aircraft involved so don't automatically assume that you are all going to be unemployed.
It is very sad to see any company reach these point. From my perspective as an outsider, I think alot of solutions should have been explored a long time ago and it may be too late.
This is the slowest time of the year for the industry w/ the exception of to Florida and the Caribbean so the time for making big decisions is now. I wish you all well in the days ahead which will be difficult regardless of the decisions that are made.
It is very sad to see any company reach these point. From my perspective as an outsider, I think alot of solutions should have been explored a long time ago and it may be too late.
This is the slowest time of the year for the industry w/ the exception of to Florida and the Caribbean so the time for making big decisions is now. I wish you all well in the days ahead which will be difficult regardless of the decisions that are made.
