The company is entering bankruptcy without DIP financing and thus cash flow will be critical going forward. The company must do everything it can to maintain cash levels high to not default on the loan guarantee.
The U.S. bankruptcy code provides for 60 days upon entrance for the debtor-in-possession to decide whether or not it wants to reject aircraft leases. Bruce Lakefield told the ALPA MEC that the A330's may have to be removed from service because they have required heavy maintenance checks due this winter that are very expensive.
Thus the conditional 60-day S.1113/S.1114 letter provided to ALPA, which would have expired on November 12, 2004, 60 days after the expected September 12, 2004 filing.
The RC4's action was taken against the recommendations of ALPA's legal and financial advisor's, all three MEC officers, and the majority of the MEC members.
In addition, with a possible Chapter 11 filing in the very near future, no agreement with the company, and thus no protection whatsoever for this pilot group going into bankruptcy. And what's at stake? According to our legal and financial advisors, our entire contract in now in grave jeopardy, including Scope (alter-ego airlines flying our A-320's), Fragmentation Protections (at 15% trigger, the best in the industry), and Seniority Rights (thus allowing a furlough out of seniority, according to equipment type).
The action of the RC4 will not only hurt pilots, but every employee in this company.
Without last minute agreements, here is what I believe will happen.
US Airways will file S.1113e (e for emergency)/S.1114 motions against any union without a TA. Because the company cannot use DIP financing, it will demonstrate to the court that it needs emergency relief from labor.
Contracts will be imposed on ALPA, AFA, the 3 TWU units, CWA, and the IAM-FSA. All of these units will accept the terms of their new agreement, except maybe the IAM-FSA.
The company will then impose their contract on the IAM-M who will not agree to the new terms and strike. US Airways will then outsource all heavy maintenance (which is the easy part) and use mechanics that report to work, management mechanics, and contractors to conduct line maintenance.
Each employee group has an option. Recognize the industry has forever change and elect to work in an LCC environment or work elsewhere.
Once the labor, facility, and airport lease renegotiation is complete, I then expect another equity investment, probably from RSA, who may take the company private, to recapitalize a revitalized US Airways.
REspectfully,
USA320Pilot