What Do You Think Will Happen Next ?

[BoeingBoy]

Seems like a good place to jump in.....

MidAtlantic will not be the future mainline. Simple dollars & cents - the Emb-170 and even the Emb-190 are not unit cost competitive with the LCC's. They are better than the 50-seaters, so make sense in the "feeder" role, but that is all. End of story.

Jim

 

[mrfish3726]

RICO,

They tried the same thing at UAL, remember ESOP? Look what happened to them, they're still dis-gruntled! Face the in-evitable, USAIR will be HITORY soon. BONNER won't sink anymore money into another BK!

 

[Rico]

Boeing Boy:

No, you misunderstand me. Not MDA growing to "take over", but instead having the work rules and pay structure of MDA forced upon the remainder of mainline.

I did not say that what Airways flies would be flown only by EMB 170/190's, (without a doubt the 190's would be added to the fleet, but added to the remaining airbuses.) What I am saying is that those flying the A319/320/321/330 might be forced under the same "working agreement" already found now at the 170 Division of US Airways.

It is not that far fetched Jim, we were promised a "painful" result if as TA could not be ratified, and take my word on it, the MDA working agreement is just that. Such a move would cover not just ALPA, but AFA, CWA, and the IAM.

I mean really, what is to stop them...?

Scope, nope
Fragmentation, nope

With the real threat of liquidation hanging over their heads, do you really think the listed unions are going to stand up to them. Please... Toss a few benefits in to coax the senior pilots, promise turbo growth to appease the junior pilots, and nuff said...

Unhappy acceptance, but agreement none the less is probable or possible given the right conditions.

All the company has to do is convince the creditors that such a plan could work, and would make a sustainable profit. Not that hard to do if they can point to such huge cost reductions. As for the Judge, they just have to show that such concessions are "reasonable" and geared realistically towards the future welfare of the company/workforce. Once again, what is already "acceptable" for "part" of the mainline, is hard to argue (to the judge) as "unreasonable" for the remainder of mainline.

You might see a big difference between MDA and Mainline, but do you think a BK judge will...? A plane is a plane, a "big" jet is a "big jet" to non-airline folk. And the pressure to preserve jobs will play into the decison as well. What judge wants to place tens of thousands on the street because of a liquidation (because THAT will be presented as the only other course of action)

Public sentiment? No help there... People like low fares, people want low fares. Employees taking pay cuts, means more low fares in the public's view. Politicians know this, and will at best support measures that will mean job survival over salvaging our CBA's any day of the week.



Mr Fish:

I dunno, you might be right.

But then again, like I asked, why would the company make the moves it has made (to position itself for future growth) if the intention was to allow it all to fall apart and sell off the parts...?

Why bother with MDA, why try to grow out of FLL, why ask for Code Share expansion...? But most of all, why not negotiate in earnest "'til you are blue in the face" if no backup "plan" exists...?

Wishful thinking? Well, not really. I expect any "backup plan" to place me out of work (But I will cross that bridge when I come to it). My suspision is that the creditors have not shut our doors alrready because something is in the works. This thread was a question asking what that might be, and my posts are only an uneducated guess.


Peace B)

 

[BoeingBoy]

Rico,

I see what you're saying - shouldn't post after a 4-day.

Still think it is unlikely to happen. I think you overestimate what the company will be able to achieve in BK, as far as contracts are concerned. Will they be able to secure cuts - undoubtedly to some extent. But as I understand it, the judge does not just throw out the contract. In layman's language that I can understand, the judge can enforce contract terms that the company convinces him are necessary (after going thru a process). The company has said repeatedly that a "LCC type contract" is what they want and the MDA contract doesn't fit that description.

In short, I'm optimistic that the company won't be able to waltz into BK court and walk out with the mainline contract vaporized and replaced with the MDA contract.

Jim

 

[NeedForSpeedNFS]

FINISHED!!! BK filing soon. Hey!..... It's been a fun ride, kids!! but..... it's over

 

[BoeingBoy]

NFS,

I believe you're right....

And all the wailing and gnashing of teeth from the usual quarters belie the fact that's it's been over for a while. Lakefield might have been able to turn the corner if he had started introducing changes to the structure the day he took over, but I personally believe U was too far gone at that point.

Jim

 

[NeedForSpeedNFS]

NFS,

I believe you're right....

And all the wailing and gnashing of teeth from the usual quarters belie the fact that's it's been over for a while. Lakefield might have been able to turn the corner if he had started introducing changes to the structure the day he took over, but I personally believe U was too far gone at that point.

Jim

[post="176976"][/post]​

JIm, as usual....excellent point!!! My feeling is....this has been the Titanic in S L O W MO T I O N!!! With our current situation, I just cannot see how agreements could possibly be reached!!!! It's not going to happen!!!! Glad I have a plan, I just hope everyone does, and makes this next transition in their life as seamless as possible!!!!! GOOD DAY!!!

 

[Rico]

I am not so optimistic Jim, as such as result would mean that "Option B"..., (breaking up and selling off the airline) might prove to be more profitable for those concerned.

Lord knows that is not my desire, but I am realistic to know that this all comes down to the decision if

A.) They can make more $$$ turning this "sow's ear into a purse", or
B.) They can make more selling parts to the highest bidder.

My main point, was that there was no real need for the company to try to erase the mainline contracts, rather they could simply expand upon the concessions already in place.

MDA is just that.

Now in reality, you need to have a growth plan to make this work leaving BK. Not just for employee acceptance, but creditors as well. Replacing the 737 fleet with EMB-190's and additional Airbuses would garner the quick approval of GE, Airbus, and Embraer... right?

As for the ATSB, if it has been anything, it has been a tool to force lower cost structures upon participating and non participating carriers. Further cuts here would be welcomed by the ATSB. IF the RSA does make a further investment into Airways, and further loan repayment occurs with the possible sale of assets (such as PDT and PSA to Mesa, or the 737's to FedEx for example). Then they too will "sign off" on the plan. Such assets could also be used to obtain the IRS approval of extending payments (ala NWA)

I really do not think that Airways has been allowed to continue this far, without the creditors already more or less "on board".

I have already talked the BK judge thing to death. really, if the creditors are supporting it, and it means job survival (in some form).... Then each of the employee groups will see dramatic concessions soon.

So it comes down to the employees. Like I said, carrot and stick. Use cold hard reality and bankruptcy leverage to force what you need upon the labor groups (base realingment, furloughes, parking aircraft). And then follow up with progress and potential. (FLL growth, point to point flying, EMB-190 and Airbus "orders")

Unhappy acceptance...? Hey, it has already happened here before, and history has a way of repeating itself. many might argue otherwise, but when faced with few remaining options, or when manuvered out of the picture, less probable things have happened.

Like I said, I am betting that I might soon be added to the 1879 currently on furlough (as a result of all this). So these are NOT what I would call "happy predictions". But I have claimed to be a realist, and as such I should make what I consider to be a realistic theory. IMO, my guess is realistic because the only other forseeable outcome is probable liquidation. Even less of a "happy prediction" than the other, eh?

The Company said they would be moving on, with or without the employees, IMO, they are going to do just that.

 

[BoeingBoy]

Rico,

My crystal ball is as cloudy as the next, especially after a 4-day trip, but here goes...

The creditors (primarily the lendors of the ATSB-backed loan) have been "on board" so far because the money has been there to pay them back - no real risk incurred by not jumping off. A BK could change that. What will they do if they face the possibility of really losing some of their money? Don't know, but I'd be nervous.

Replacing the 737's with 190's and Buses involves capital, which involves risk by someone. We already have lost the manufacturer financing for CRJ-700's and had to seek alternative financing (which was short-term as of the 2nd quarter report). In addition, you're talking about nearly half the remaining "mainline" pilots being directly affected (furloughs) and many more indirectly (downgrades) by that sizable reduction in "mainline" airframes - how will they react. Remember, the "self-help" option is still on the table and how will that affect a successful restructuring?

The carrot and stick only works as long as the carrot isn't made of plastic - in other words, false promise. Is it really a carrot if the result of getting that carrot is "mainline" reduced to MDA contracts? By and large that less than what the company is proposing, and you see how that's going so far.

Anyway, I've thought liquidation was a very real possibility for several months now. But we shall see, won't we?

Jim

 

[Reservation Agent]

Chapter 11 bankruptcy on Sept 12th, 2004...

Then...on Dec 24th....a filing for Chapter 7 ....

Have a Happy Holiday from the Grinch....

 

[ACrazy8]

Drama.....

 

[WSurf]

Spin off an asset or two to help pay for the affair (PSA, PDT), and blamo, you have a workable plan.



Wow, Didn't know that PSA and Piedmont were an asset. Maybe PSA, but I don't think that too many companies want a senior outfit, with 50 Turbo Props that are on the average 15 years old.

 

[Smartest Loser]

Chapter 11 bankruptcy on Sept 12th, 2004...

Then...on Dec 24th....a filing for Chapter 7 ....

Have a Happy Holiday from the Grinch....

[post="177002"][/post]​

That would mean FAILURE for this guys...!! Their ego's won't allow that.

Something will break and throw a brand new monkey wrench in the mix.

It always does...

 

[to much time to quit]

That would mean FAILURE for this guys...!! Their ego's won't allow that.

Something will break and throw a brand new monkey wrench in the mix.

It always does...

[post="177046"][/post]​

Please just cut me loose, I'm tired of being in the starting line up of a losing team. I won't quit, but I would like to become a free agent.

 

[jimntx]

Rico,

But as I understand it, the judge does not just throw out the contract. In layman's language that I can understand, the judge can enforce contract terms that the company convinces him are necessary (after going thru a process).

In short, I'm optimistic that the company won't be able to waltz into BK court and walk out with the mainline contract vaporized and replaced with the MDA contract.

Jim

[post="176972"][/post]​

The judge's responsibility in BK is to protect the interests of the creditors--including making sure that the company does not hide or convert fungible assets, but also making sure that the smaller creditors receive the same protection as the larger creditors. It's more complicated than that, but that's the Cliff's Notes version.

As far as the labor contracts unfortunately, what happens in BK is vaporization of labor contracts. The judge enforces nothing, nor does he impose contract terms of any sort. If the company convinces the judge that it is in the best interest of the creditors to abrogate (nullify) one or all labor contracts, that's what he will do. The company is then free to implement whatever pay rates and work rules they want. That's why the unions then can elect to avail themselves of self-help. I think that someone else posted correctly on one of the threads that having an agreement prior to bankrupcty eliminates self-help as an option for a labor group because with an agreement, the company would probably not ask for abrogation of that group(s) contract.

A.) They can make more $$$ turning this "sow's ear into a purse", or
B.) They can make more selling parts to the highest bidder.

[post="176986"][/post]​

If you were a major creditor of US Airways--particularly one of the creditors whose loan is guaranteed by the ATSB, you would have to ask yourself whether you want to pick...

A.)--which is a crap shoot, another roll of the dice. US Airways was given more than one chance to do this and has failed (I'm not talking about just the 1st bankruptcy and the aftermath). I agree that this is a management failure. From what I have seen, the employees have given and worked, and given and worked. All to no avail. As a creditor, what's your motivation to believe management's promises to "do better next time."
B.) As close to a sure thing as there can be in this world. Some brand new, desirable a/c; landing slots to die for (LGA, DCA) which I understand are pledged as collateral on the ATSB loans. Particularly, when there is someone (Sir Richard Branson) who has a proven record as a successful airline operator sniffing around for an opportunity in the U.S.