Us Airways Workers Think Merger

[sfb]

This is the relevant section of Continental's 10-K filing with the SEC regarding the US Airways terminal ("East End Terminal") at LGA:

We are contingently liable for US Airways' obligations under a lease agreement between US Airways and the Port Authority of New York and New Jersey related to the East End Terminal at LaGuardia airport. These obligations include the payment of ground rentals to the Port Authority and the payment of other rentals in respect of the full amounts owed on special facilities revenue bonds issued by the Port Authority having an outstanding par amount of $166 million at December 31, 2004 and having a final scheduled maturity in 2015. If US Airways defaults on these obligations, we would be obligated to cure the default, and the applicable documents provide that we would have the right to occupy the terminal after US Airways' interest in the lease had been terminated. In September 2004, US Airways filed for reorganization under Chapter 11 of the United States Bankruptcy Code. On December 1, 2004, US Airways made only a portion of the payment due under the lease agreement on that date, such portion being that amount of the payment due that was deemed attributable to the period of time after their bankruptcy filing, and we paid the difference in an amount of approximately $9 million. If US Airways assumes the lease, we expect to be repaid this amount together with interest thereon. As of March 14, 2005, US Airways has made no election to assume or reject the lease agreement in its bankruptcy case.

What isn't clear is if Continental has a right of first refusal on a transfer of the lease, or if they have the right to block a transfer of the lease, either.

 

[sfb]

Problem is when you decertify a union, you are stuck without representation for a period of time and then you have to negotiate a whole new contract. When you are without a union, you are at will employees and the company can impose any work rules on you.

Yep, but if a substantial number of your ranks are going to be furloughed and many of the remaining get displaced to somewhere like LGA or PHL, it's not like things could get much worse.

 

[RowUnderDCA]

Good Lord, haven't we taken this about as far as we need to?

700, FWIW, commercial leases are transferred all the time, and while you are correct that UAIR cannot sell something it does not own (the real estate) depending on the clauses of the lease between UAIR and CAL (which I have not read), it may be able to sell or assign the lease (which is personal property, not real property). There is usually language in commercial leases along the lines of: Lessor shall have the right to sell, convey, assign, or tranfer its its rights and obligations hereunder to a third party with the permission of Lessee. Such permission will not be unreasonably withheld.

Regards,
DCAflyer

[post="268848"][/post]​

WOW DCAflyer... you took the words right off my keyboard.

 

[savyinvestor]

Yep, but if a substantial number of your ranks are going to be furloughed and many of the remaining get displaced to somewhere like LGA or PHL, it's not like things could get much worse.

[post="268886"][/post]​

Seems like if this merger takes place the AW folks would be in panic mode. I would be if I were them. Its not the U folks fault, but still the news for AW doesn't look too good. Savy