Us Airways Strategic Analysis
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USA320Pilot
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DellDude:
With all due respect, your constant negativity and inability to provide constructive debate does not speak well about yourself, and in my opinion is simply manifesting yourself in fear for loss of your job.
Let’s put your comments into context:
DellDude said: “they are in a state of panic pulling out from FLL.â€
USA320Pilot comments: The initial Fort Lauderdale “focus city†plan included 44 daily departures to 20 destinations, including 11 East Coast cities, 8 Latin American and Caribbean countries and Puerto Rico. In May it will have 34 daily departures to 15 destinations, two of which will be Saturday-only. "This was a difficult decision to make, but [it] preserves the larger project," of the Fort Lauderdale expansion, US Airways spokeswoman Amy Kudwa told the Orlando Sentinel.
USA320Pilot continues: US Airways made the decision to reduce, not abandon, the FLL focus city before Northwest announced its fare increase. Moreover, during the past two years virtually every fare increase has been killed by Northwest, thus who knew this one would stick and add over $30 million per month to the balance sheet? Management reacted in an important way because of the price of oil and at the time of the decision to pull done service, there was not clear relief in sight to boost revenue or lower energy costs.
DellDude said: “oils gonna screw them shortly...
USA320Pilot comments: In an email ALPA MEC chairman Bill Pollock said, “What can we do about it (energy prices)? We can continue to push to reduce non-labor costs which will help the math problem. We can work together to make the operation work despite the difficult circumstances. And, realistically, we should look after each other while making the most of the opportunities to sit on top of the world in one of the noblest professions ever.â€
â€You should also know that despite the extraordinary fuel cost problem mentioned above, US Airways is hiring to fill vacancies that should address some of the frustrations you mention. Substantial money is also being spent to refurbish ground equipment for use where needed around the system. Bottom line, money is being spent to give supervisors and US the tools to make the operation work,†he noted.
DellDude said: “they salvoed 11 37's to raise lost cash.â€
USA320Pilot comments: In a recent email, US Airways executive vice president and general ocnsel Liz Lanier said, “Ron reviewed the fleet plan including the planned reduction of eleven aircraft. He discussed the removal of 737s from operations where such aircraft are scheduled for maintenance including lap joint repairs. This information to the Board is reflected in the minutes of the meeting taken by Caroline Ray, Assistant Secretary of the Board. The Board materials include a slide on this point entitled 2005 Plan - Fleet, which reflects the planned reduction in the fleet size, although block hours are expected to increase due to improved utilization.â€
â€The fleet plan data were properly given to the Board as an information item. This is a plan. The actual planes to be rejected are in the process of being identified. Board approval is required for matters where a contract or agreement is to be executed on behalf of the company and the contract exceeds $25 million. Each plane is subject to a separate lease or mortgage agreement. The contract value is expected to be $2 to 3 million per agreement. Accordingly, the rejection of these aircraft does not require Board approval,†Lanier indicated.
â€It is our expectation that the rejection of each of the aircraft will be presented to the Bankruptcy Court for its approval at the March or at the April Omnibus hearing,†Lanier noted.
DellDude said: “they lost the awac investment already.â€
USA320comments: During the month of January US Airways made a number of large S.1110 cure payments that are one-time charges, to preserve a majority of the mainline fleet. Management knew of these charges and briefed every union about this issue in August. Furthermore, there are more payments due in February, but some of these payments will not be made as a few Airbus and 11 B737s will be removed from service because the company has significant help by using bankruptcy tools to cut this large cost time.
DellDude saisd: “their going to mess themselves in may in PIT and CLT when other carriers ramp up the fare war.â€
USA320Pilot comments: US Airways does not reach its target CASM, per Transformation Plan version 3.2, for about one-year, which is expected to be below Southwest and AirTtan, but above jetBlue Airways.
DellDude said: “proof positive of the knee jerk POR.â€
USA320Pilot comments: In light of the rapid spike in oil prices, pulling down FLL service may have looked foolish, but was the prudent thing to do to preserve cash. US Airways advertised and tried to sell the Panama City and San Salvador service for moths, but was unsuccessful. Some things have worked in the Caribbean and Latin America and some things do not. But the important thing is management is willing to try new routes and cut their losses quickly if necessary. During a less difficult time management may have been willing to let the new routes operate longer and withstand the losses, but I believe we should applaud management for cutting its losses early during this difficult industry wide time.
Regards,
USA320Pilot
With all due respect, your constant negativity and inability to provide constructive debate does not speak well about yourself, and in my opinion is simply manifesting yourself in fear for loss of your job.
Let’s put your comments into context:
DellDude said: “they are in a state of panic pulling out from FLL.â€
USA320Pilot comments: The initial Fort Lauderdale “focus city†plan included 44 daily departures to 20 destinations, including 11 East Coast cities, 8 Latin American and Caribbean countries and Puerto Rico. In May it will have 34 daily departures to 15 destinations, two of which will be Saturday-only. "This was a difficult decision to make, but [it] preserves the larger project," of the Fort Lauderdale expansion, US Airways spokeswoman Amy Kudwa told the Orlando Sentinel.
USA320Pilot continues: US Airways made the decision to reduce, not abandon, the FLL focus city before Northwest announced its fare increase. Moreover, during the past two years virtually every fare increase has been killed by Northwest, thus who knew this one would stick and add over $30 million per month to the balance sheet? Management reacted in an important way because of the price of oil and at the time of the decision to pull done service, there was not clear relief in sight to boost revenue or lower energy costs.
DellDude said: “oils gonna screw them shortly...
USA320Pilot comments: In an email ALPA MEC chairman Bill Pollock said, “What can we do about it (energy prices)? We can continue to push to reduce non-labor costs which will help the math problem. We can work together to make the operation work despite the difficult circumstances. And, realistically, we should look after each other while making the most of the opportunities to sit on top of the world in one of the noblest professions ever.â€
â€You should also know that despite the extraordinary fuel cost problem mentioned above, US Airways is hiring to fill vacancies that should address some of the frustrations you mention. Substantial money is also being spent to refurbish ground equipment for use where needed around the system. Bottom line, money is being spent to give supervisors and US the tools to make the operation work,†he noted.
DellDude said: “they salvoed 11 37's to raise lost cash.â€
USA320Pilot comments: In a recent email, US Airways executive vice president and general ocnsel Liz Lanier said, “Ron reviewed the fleet plan including the planned reduction of eleven aircraft. He discussed the removal of 737s from operations where such aircraft are scheduled for maintenance including lap joint repairs. This information to the Board is reflected in the minutes of the meeting taken by Caroline Ray, Assistant Secretary of the Board. The Board materials include a slide on this point entitled 2005 Plan - Fleet, which reflects the planned reduction in the fleet size, although block hours are expected to increase due to improved utilization.â€
â€The fleet plan data were properly given to the Board as an information item. This is a plan. The actual planes to be rejected are in the process of being identified. Board approval is required for matters where a contract or agreement is to be executed on behalf of the company and the contract exceeds $25 million. Each plane is subject to a separate lease or mortgage agreement. The contract value is expected to be $2 to 3 million per agreement. Accordingly, the rejection of these aircraft does not require Board approval,†Lanier indicated.
â€It is our expectation that the rejection of each of the aircraft will be presented to the Bankruptcy Court for its approval at the March or at the April Omnibus hearing,†Lanier noted.
DellDude said: “they lost the awac investment already.â€
USA320comments: During the month of January US Airways made a number of large S.1110 cure payments that are one-time charges, to preserve a majority of the mainline fleet. Management knew of these charges and briefed every union about this issue in August. Furthermore, there are more payments due in February, but some of these payments will not be made as a few Airbus and 11 B737s will be removed from service because the company has significant help by using bankruptcy tools to cut this large cost time.
DellDude saisd: “their going to mess themselves in may in PIT and CLT when other carriers ramp up the fare war.â€
USA320Pilot comments: US Airways does not reach its target CASM, per Transformation Plan version 3.2, for about one-year, which is expected to be below Southwest and AirTtan, but above jetBlue Airways.
DellDude said: “proof positive of the knee jerk POR.â€
USA320Pilot comments: In light of the rapid spike in oil prices, pulling down FLL service may have looked foolish, but was the prudent thing to do to preserve cash. US Airways advertised and tried to sell the Panama City and San Salvador service for moths, but was unsuccessful. Some things have worked in the Caribbean and Latin America and some things do not. But the important thing is management is willing to try new routes and cut their losses quickly if necessary. During a less difficult time management may have been willing to let the new routes operate longer and withstand the losses, but I believe we should applaud management for cutting its losses early during this difficult industry wide time.
Regards,
USA320Pilot
DorkDriver
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From USA320:
As the company continues to shop for exit financing, another option to boost liquidity would be for the company to sell its wholly owned companies Piedmont, PSA, and MDA and then have a MOU for the acquiring company to enter into an affiliate carrier air service agreement.
My Reply:
Just like the United merger, you won't let go of the idea of selling the WO's. PSA and PDT generate too much revenue just to be sold off for "instant cash." Why do you believe that the company would even consider placing CRJ900s at Air Wisc, and not at PSA where the revenue would stay completely within Group?
As the company continues to shop for exit financing, another option to boost liquidity would be for the company to sell its wholly owned companies Piedmont, PSA, and MDA and then have a MOU for the acquiring company to enter into an affiliate carrier air service agreement.
My Reply:
Just like the United merger, you won't let go of the idea of selling the WO's. PSA and PDT generate too much revenue just to be sold off for "instant cash." Why do you believe that the company would even consider placing CRJ900s at Air Wisc, and not at PSA where the revenue would stay completely within Group?
BoeingBoy
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Sometimes, it's just too easy.....
Surely they know which aircraft are scheduled for heavy maintenance - it's not like you're flying along one day and the "due heavy maint" lite comes on. Same for the lap joint repairs.
Either they know which aircraft are being returned to leasors for the reasons cited or they're deciding which airplanes are to be returned and the given reasons are bogus.
Jim
PS - one more thing. Braniff went thru the "start a route and pull it within weeks if it wasn't profitable" routine also. Coincidentally, fuel was high at the time, too. It was just before they ceased operations......
USA320Pilot said:
Surely they know which aircraft are scheduled for heavy maintenance - it's not like you're flying along one day and the "due heavy maint" lite comes on. Same for the lap joint repairs.
Either they know which aircraft are being returned to leasors for the reasons cited or they're deciding which airplanes are to be returned and the given reasons are bogus.
Jim
PS - one more thing. Braniff went thru the "start a route and pull it within weeks if it wasn't profitable" routine also. Coincidentally, fuel was high at the time, too. It was just before they ceased operations......
USA320Pilot
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DorkDriver said:
DorkDriver siad: "Just like the United merger, you won't let go of the idea of selling the WO's. PSA and PDT generate too much revenue just to be sold off for "instant cash." Why do you believe that the company would even consider placing CRJ900s at Air Wisc, and not at PSA where the revenue would stay completely within Group?"
USA320Pilot comments: Because senior management directly told me so. Will it happen? Maybe, maybe not.
Selling the “wholly owned†provides significant short-term benefit by boosting liquidity, but it reduces long-term profits. This is a means to deal with a deterioration in industry wide fundamentals, in particular fuel prices. It's still unclear how the regional airline issue will be resolved; however, US Airways has a lot of flexibility while it’s still in its formal reorganization.
By selling a “wholly owned(s)†an affiliate carrier may be more inclined to grant air service cost relief because their expanded company/footprint would have a greater revenue base.
We could have 4 or more regional airlines bidding on a US Airways contract that could include current service, expanded wholly owned service/equipment, and potential new Air Wisconsin service.
The real beauty of the AWAC deal is that it gives Lakefield and Stanley options and leverage.
I recognize monetizing USAir's ownership interest in Piedmont, PSA and MDA presents a Hobson's choice -- the amount of any recovery is a direct function of the "richness" of the contracts that US Airways is willing to enter with them. In other words, maximization of recovery depends on the extent to which US Airways wishes to further encumber its future cost structure.
Moreover, the Air Wisconsin hedge clouds some of this because there is uncertainty over how much (if any) Air Wisconsin flying may have to be accommodated within the overall context of US Airways RJ operations, because the carrier has not been released from its United obligation. Presumably, any Air Wisconsin accommodation will require at least a short-term truncation of flying by somebody else.
However, these are difficult times due to high energy prices and to complete its POR with affiliate carrier support, US Airways may have no option but to sell one or all of its wholly owned companies if that is the best way to complete a comprehensive “global†RJ plan.
Regards,
USA320Pilot
DorkDriver siad: "Just like the United merger, you won't let go of the idea of selling the WO's. PSA and PDT generate too much revenue just to be sold off for "instant cash." Why do you believe that the company would even consider placing CRJ900s at Air Wisc, and not at PSA where the revenue would stay completely within Group?"
USA320Pilot comments: Because senior management directly told me so. Will it happen? Maybe, maybe not.
Selling the “wholly owned†provides significant short-term benefit by boosting liquidity, but it reduces long-term profits. This is a means to deal with a deterioration in industry wide fundamentals, in particular fuel prices. It's still unclear how the regional airline issue will be resolved; however, US Airways has a lot of flexibility while it’s still in its formal reorganization.
By selling a “wholly owned(s)†an affiliate carrier may be more inclined to grant air service cost relief because their expanded company/footprint would have a greater revenue base.
We could have 4 or more regional airlines bidding on a US Airways contract that could include current service, expanded wholly owned service/equipment, and potential new Air Wisconsin service.
The real beauty of the AWAC deal is that it gives Lakefield and Stanley options and leverage.
I recognize monetizing USAir's ownership interest in Piedmont, PSA and MDA presents a Hobson's choice -- the amount of any recovery is a direct function of the "richness" of the contracts that US Airways is willing to enter with them. In other words, maximization of recovery depends on the extent to which US Airways wishes to further encumber its future cost structure.
Moreover, the Air Wisconsin hedge clouds some of this because there is uncertainty over how much (if any) Air Wisconsin flying may have to be accommodated within the overall context of US Airways RJ operations, because the carrier has not been released from its United obligation. Presumably, any Air Wisconsin accommodation will require at least a short-term truncation of flying by somebody else.
However, these are difficult times due to high energy prices and to complete its POR with affiliate carrier support, US Airways may have no option but to sell one or all of its wholly owned companies if that is the best way to complete a comprehensive “global†RJ plan.
Regards,
USA320Pilot
USA320Pilot
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BoeingBoy:
BoeingBoy said: “Surely they know which aircraft are scheduled for heavy maintenance - it's not like you're flying along one day and the "due heavy maint" lite comes on. Same for the lap joint repairs. Either they know which aircraft are being returned to leasors for the reasons cited or they're deciding which airplanes are to be returned and the given reasons are bogus."
USA320Pilot comments: As one of the regular pessimists, even you should understand brinkmanship and leverage. John Luth and the Seabury Group are finalizing discussions with aircraft financiers on which EETCs/leases to affirm and which one’s to reject. They know exactly the cost of each aircraft from an ownership view and schedule maintenance cost. Luth regularly flies back and forth between LGA and DCA, many times on my aircraft, as he works the lease renegotiation issue.
Union’s and the Company both use the news media as a third-party comment to create leverage, which is occurring here.
The specific tail numbers will not be identified, either later this month or in April, per Lanier’s comments, until both of these issues are resolved and a combine cost cut can be obtained providing the company with the greatest benefit prior to emergence.
Regards,
USA320Pilot
BoeingBoy said: “Surely they know which aircraft are scheduled for heavy maintenance - it's not like you're flying along one day and the "due heavy maint" lite comes on. Same for the lap joint repairs. Either they know which aircraft are being returned to leasors for the reasons cited or they're deciding which airplanes are to be returned and the given reasons are bogus."
USA320Pilot comments: As one of the regular pessimists, even you should understand brinkmanship and leverage. John Luth and the Seabury Group are finalizing discussions with aircraft financiers on which EETCs/leases to affirm and which one’s to reject. They know exactly the cost of each aircraft from an ownership view and schedule maintenance cost. Luth regularly flies back and forth between LGA and DCA, many times on my aircraft, as he works the lease renegotiation issue.
Union’s and the Company both use the news media as a third-party comment to create leverage, which is occurring here.
The specific tail numbers will not be identified, either later this month or in April, per Lanier’s comments, until both of these issues are resolved and a combine cost cut can be obtained providing the company with the greatest benefit prior to emergence.
Regards,
USA320Pilot
BoeingBoy
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Thank you.....
If you'd just said that to start with, instead of spewing the company's PR nonsense, I wouldn't have had a complaint.
The Boeings that the company has filed to reject are among the more expensive leases for their type. The question is whether the tightening a/c lease market will allow the company any leverage to reduce these lease rates. So far the answer is no.....
Jim
If you'd just said that to start with, instead of spewing the company's PR nonsense, I wouldn't have had a complaint.
The Boeings that the company has filed to reject are among the more expensive leases for their type. The question is whether the tightening a/c lease market will allow the company any leverage to reduce these lease rates. So far the answer is no.....
Jim
funny but many of the others see things in a similar perspective......its not negativity but what i percieve as stark reality.
with these recent declared losses and proof positive how management lied in the media for their inept operational flounderings...do you really think 'the street' isn't having serious reservations into the capabilities and faith of this heralded management team?
sure seems to me and many others on this board to be more of the same by the same..
like i said...watch and see in May if they don't start sounding the retreat....
yall have a nice clear flight ya hear.. 😉
USA320Pilot
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DellDude:
DellDude said: with these recent declared losses and proof positive how management lied in the media for their inept operational flounderings...do you really think 'the street' isn't having serious reservations into the capabilities and faith of this heralded management team?
USA320Pilot comments: Most people who post on this board are uninformed regarding what is really occurring inside senior levels of the company. In regard to January’s financial performance, again the S.1110 cure payments, liquidation concerns causing passengers booking away to other companies (much of this labor’s fault), energy costs, and weather problems caused much of the problem.
In regard to key people “on the streetâ€, I can tell you they unequivocally support management and have told me so.
Regards,
USA320Pilot
DellDude said: with these recent declared losses and proof positive how management lied in the media for their inept operational flounderings...do you really think 'the street' isn't having serious reservations into the capabilities and faith of this heralded management team?
USA320Pilot comments: Most people who post on this board are uninformed regarding what is really occurring inside senior levels of the company. In regard to January’s financial performance, again the S.1110 cure payments, liquidation concerns causing passengers booking away to other companies (much of this labor’s fault), energy costs, and weather problems caused much of the problem.
In regard to key people “on the streetâ€, I can tell you they unequivocally support management and have told me so.
Regards,
USA320Pilot
i'm sure they're standing in line to fund what continually appears to be a losing proposition....
since you are so well informed.......
why do many analysts seem to see things as many of us uninformed people do?
they'll make it to may i'm sure but they're going to have to lose fare monies from the get go and the street knows it....
since you are so well informed.......
why do many analysts seem to see things as many of us uninformed people do?
they'll make it to may i'm sure but they're going to have to lose fare monies from the get go and the street knows it....
BoeingBoy
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USA320Pilot said:
Was this before or after they asked for a buck for coffee? Or better yet, before or after they advised you on your forecast for what the stock would do yesterday?
Jim
ps - it's up so far today, by the way....
USA320Pilot said:
Inlcuding yourself.
And if key people on the street unequivocally support management, why has there been NO DIP Financing up until five months into bankruptcy and why is there no exit financing?
Don't let the facts get in your way.
