Here is just a thought. Do you not feel that the judge needs to be alittle careful here in what he decides? If the judge awards the 23%, do you not think that DL, CO, and AA would file for Chapter 11 right away and then do the same thing to help with their relief? UA tried to get the judge to reduce their pay. The judge basicly told UA to go back and work it out with the unions. That was about 4 months ago. Seems like nothing has progressed there.
What Happens If Court Awards 23%?
- Thread starter atoguy
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MarkMyWords
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- Aug 20, 2002
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2 points.....1) DL agents are non-union, so if the company wants 23%, it can just take it. 2) UAL has DIP financing and cash on hand that allows it to continue operating while it negotiates new contracts. At US, time is our enemy.
atoguy said:
Couple of points.
Why on earth would AA immediately file for Ch 11 protection just to cut its employees' pay?
Last year, AA reduced its unionized employees' pay by $1.6 billion annually simply by threatening to file Ch 11.
And with AA's revenues up nearly $2 billion over 2002 and its expenses down by nearly $3 billion over 2002, things are not so glum over at AA. Over $3.5 billion cash in the bank, and cash flow positive for over a year now. High fuel prices indeed hurt, but Ch 11 won't fix high fuel prices.
DL's only major union is its pilots - and they will blink just prior to DL's threatened Ch 11 filing. The other DL employees are predominantly nonunion, so DL will just cut their pay if it decides that is necessary.
CO? Its finances are weak, and it might be forced to file for Ch 11 protection due to liquidity issues - lots of debt maturing and not a lot of free cash with which to pay it. If it can refinance the maturing debt, maybe it can avoid Ch 11.
mrfish3726
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- Jul 7, 2004
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MarkMyWords Says "UAL has DIP financing and cash on hand that allows it to continue operating while it negotiates new contracts. At US, time is our enemy."
With UAL still saying that they 1.1B in cuts, I don't know how much more their employees will be willing to give either. As time goes on, and on, and on UAL's management team still has no solutions or answers to their cash crunch. It will be the same here in the not to distant future that UAL management will be after more from the employees. They have already started with more lay-offs which they say will save the airline 625M, and then said that on top of that they needed another 500M. As at USAIR, management at UAL will say that only the employees can save the airline AGAIN!
With UAL still saying that they 1.1B in cuts, I don't know how much more their employees will be willing to give either. As time goes on, and on, and on UAL's management team still has no solutions or answers to their cash crunch. It will be the same here in the not to distant future that UAL management will be after more from the employees. They have already started with more lay-offs which they say will save the airline 625M, and then said that on top of that they needed another 500M. As at USAIR, management at UAL will say that only the employees can save the airline AGAIN!
atoguy said:
I don't think the competitors will do anything immediately. Even with labor rate reductions for US Airways, emergence from BK will be difficult at best. Currently, there is no Plan of Reoganization, nor anyone (except the employees) to finance the company.
I think the other companies take a wait and see approach... If US Airways stops flying, the remaining carriers probably don't need to get concessions, as the reduction in supply of airline seats should help increase fares. I think this holds true for everyone except Delta, which will need to get is employee costs in line with the remaining industry.
WestCoastGuy
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- Jun 27, 2004
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Frank Lorenzo must be proud of our group of talented exec's. None of them seem to be out in the field much giving their smoke and mirror show.
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