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USA320Pilot
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US Airways Tidbits
1. According to the Pittsburgh Post-Gazette, Mesa is interested in buying US Airways’ assets. Jonathan Ornstein, Mesa's chief executive office, told the newspaper he hoped that US Airways could lower its costs and solve its financial problems this year, thereby eliminating any need to sell some of its assets. But if that doesn't happen, "We would aggressively pursue any opportunities that may develop" and he would be interested in the US Airways Express commuter operations, of which his company is already a code-sharing partner, as well as the coveted Washington-New York-Boston shuttle. Mesa's labor costs are less than those at US Airways, allowing Ornstein to make any of US Airways' assets immediately profitable, he said. "Don't underestimate what can happen when you overlay a new cost structure," he said. Mesa would be a "likely candidate" to buy what US Airways has to offer, Ornstein said, "given our history and relationship with US Airways and our understanding of the assets."
USA320Pilot comments: In my opinion, US Airways will sell at least its PSA RJ operation and CRJ-200/700 delivery positions to Mesa for about $100 million. Then US Airways and Mesa will code share the operation and the deal would comply with J4J.
Meanwhile, Piedmont and Allegheny Airlines are being incrementally downsized and management may desire to have a small turboprop operation to serve airports that cannot support a RJ. Thus, I believe these two companies may be merged with a competitive cost structure or one or both could be liquidated. Reports indicate US Airways senior vice president of corporate planning and express Bruce Ashby will meet with company and union leaders for both "wholly owned" airlines tomorrow in Pittsburgh.
In regard to the US Airways Shuttle, each year the federal government auctions its travel among carriers in a sealed, private bid process. For 2004 US Airways holds the contract for all three Shuttle routes and as such, the company carries almost all of the government-sponsored traffic that flies on these segments. Over the last few years, this contract has changed hands several times and last year Delta Air Lines carried this business for $34 a segment. Going forward provided the Shuttle is not sold to Mesa, US Airways may use the EMB-170 and its low break even load factor of about 50% to add service to the existing schedule. Furthermore, I understand there are no changes foreseen in the Shuttle fleet, other than the addition of some RJ’s here and there as mentioned above.
2. On January 12 US Airways presented its appeal on the lower courts decision on the A320 heavy maintenance overhaul dispute to the Third Circuit Court of Appeals in Philadelphia. Reports indicate an opinion and award could be released in two to four weeks. Separately, US Airways has signed a three-year lease agreement for its current Pittsburgh maintenance hangars with a provision that it could terminate the agreement with respect to all or part of the facilities after the first year. In addition, the Indianapolis Star reported Melina Kennedy, Indianapolis’ director of economic development, said ‘We think that the momentum is increasing. We really wish that we had a tenant in place right now, and we're moving toward that end."
USA320Pilot comments: From this observer’s perch, If US Airways loses its appeal, there could be a move by the airline to shift its Pittsburgh B737 overhaul and Airbus heavy checks to Indianapolis.
3. US Airways has implemented a new ethics policy and has mailed out a booklet to all employees. The new corporate policy was a direct response by Congress, in particular Senators Sarbanes and Oxley, in response to the Enron scandal.
4. US Airways and ALPA have selected the vendor to provide the program for the "Pref Bid" system. The airline is in negotiations with the vendor to obtain a contract. The new bidding system might not be implemented until the fall, there will be a trail period, and ALPA is not expected to sustain a pay cut due to implementation delays.
5. In a September issue of Air Transport World, US Airways chief executive officer Dave Siegel said he would like to fly from Philadelphia to 20 different European destinations. In a few months the Arlington-based airline will join the Star Alliance, therefore, in the spring of 2005, immediately before the busy transatlantic season, US Airways could add service to Star partner hubs like Oslo, Copenhagen, and Vienna.
6. In other interesting US Airways news, senior management and the Labor Advisory Committee (LAC) will meet tomorrow. The LAC will have one member present from ALPA, AFA, IAM, CWA, TWU, and non-contract employees. The meeting agenda is expected to include a discussion of the company’s financial and operating results and its projections, plans, and strategies.
Regards,
USA320Pilot
1. According to the Pittsburgh Post-Gazette, Mesa is interested in buying US Airways’ assets. Jonathan Ornstein, Mesa's chief executive office, told the newspaper he hoped that US Airways could lower its costs and solve its financial problems this year, thereby eliminating any need to sell some of its assets. But if that doesn't happen, "We would aggressively pursue any opportunities that may develop" and he would be interested in the US Airways Express commuter operations, of which his company is already a code-sharing partner, as well as the coveted Washington-New York-Boston shuttle. Mesa's labor costs are less than those at US Airways, allowing Ornstein to make any of US Airways' assets immediately profitable, he said. "Don't underestimate what can happen when you overlay a new cost structure," he said. Mesa would be a "likely candidate" to buy what US Airways has to offer, Ornstein said, "given our history and relationship with US Airways and our understanding of the assets."
USA320Pilot comments: In my opinion, US Airways will sell at least its PSA RJ operation and CRJ-200/700 delivery positions to Mesa for about $100 million. Then US Airways and Mesa will code share the operation and the deal would comply with J4J.
Meanwhile, Piedmont and Allegheny Airlines are being incrementally downsized and management may desire to have a small turboprop operation to serve airports that cannot support a RJ. Thus, I believe these two companies may be merged with a competitive cost structure or one or both could be liquidated. Reports indicate US Airways senior vice president of corporate planning and express Bruce Ashby will meet with company and union leaders for both "wholly owned" airlines tomorrow in Pittsburgh.
In regard to the US Airways Shuttle, each year the federal government auctions its travel among carriers in a sealed, private bid process. For 2004 US Airways holds the contract for all three Shuttle routes and as such, the company carries almost all of the government-sponsored traffic that flies on these segments. Over the last few years, this contract has changed hands several times and last year Delta Air Lines carried this business for $34 a segment. Going forward provided the Shuttle is not sold to Mesa, US Airways may use the EMB-170 and its low break even load factor of about 50% to add service to the existing schedule. Furthermore, I understand there are no changes foreseen in the Shuttle fleet, other than the addition of some RJ’s here and there as mentioned above.
2. On January 12 US Airways presented its appeal on the lower courts decision on the A320 heavy maintenance overhaul dispute to the Third Circuit Court of Appeals in Philadelphia. Reports indicate an opinion and award could be released in two to four weeks. Separately, US Airways has signed a three-year lease agreement for its current Pittsburgh maintenance hangars with a provision that it could terminate the agreement with respect to all or part of the facilities after the first year. In addition, the Indianapolis Star reported Melina Kennedy, Indianapolis’ director of economic development, said ‘We think that the momentum is increasing. We really wish that we had a tenant in place right now, and we're moving toward that end."
USA320Pilot comments: From this observer’s perch, If US Airways loses its appeal, there could be a move by the airline to shift its Pittsburgh B737 overhaul and Airbus heavy checks to Indianapolis.
3. US Airways has implemented a new ethics policy and has mailed out a booklet to all employees. The new corporate policy was a direct response by Congress, in particular Senators Sarbanes and Oxley, in response to the Enron scandal.
4. US Airways and ALPA have selected the vendor to provide the program for the "Pref Bid" system. The airline is in negotiations with the vendor to obtain a contract. The new bidding system might not be implemented until the fall, there will be a trail period, and ALPA is not expected to sustain a pay cut due to implementation delays.
5. In a September issue of Air Transport World, US Airways chief executive officer Dave Siegel said he would like to fly from Philadelphia to 20 different European destinations. In a few months the Arlington-based airline will join the Star Alliance, therefore, in the spring of 2005, immediately before the busy transatlantic season, US Airways could add service to Star partner hubs like Oslo, Copenhagen, and Vienna.
6. In other interesting US Airways news, senior management and the Labor Advisory Committee (LAC) will meet tomorrow. The LAC will have one member present from ALPA, AFA, IAM, CWA, TWU, and non-contract employees. The meeting agenda is expected to include a discussion of the company’s financial and operating results and its projections, plans, and strategies.
Regards,
USA320Pilot
