Last nights agreement between ALPA and the company resolved all MDA grievances and clarified numerous items necessary for the delivery and start up of the Embraer Division. The first EMB-170 aircraft is now scheduled to arrive in two weeks.
Separately, according to the code-a-phone the Negotiating Committee will continue to meet with management the week of February 9th to evaluate the company’s need for relief regarding small jet scope issues and appropriate protections and returns should the Association agree to any contractual modifications.
Yesterday the Beaver County Times reported
(See Story), ALPA will also accommodate the company's request for more flexibility, Stephan said. Contracts now stipulate which of US Airways' airlines and affiliates can fly regional jets and which pilots are eligible to fly the jets. In May, US Airways placed an order for 170 regional jets, worth $4.3 billion, but its financial health has been the topic of much speculation in recent months. "If the company credit rating falls below the B-, then we stand the chance of losing our financing on the regional jets," US Airways spokesman David Castelveter said in January.
USA320Pilot comments: There are Wall Street reports that GECAS is forcing US Airways' hand to change RJ scope provisions and the discussions with ALPA could permit the spin off of PSA, resolution to the APL CRJ-700/705 dispute, potential APL relief, and adjustments to delivery positions/J4J, and would permit US Airways to provide an alternative for United Airlines to solve its Dulles problem. Separately, this could move the business partners closer to their merger.
Yesterday the Pittsburgh Post-Gazeete reported The company is worried that GE Capital Corp., which financed a large order last year for the RJS from Brazilian aircraft maker Embraer and Canadian aircraft maker Bombardier Aerospace, would pull its commitments if the airline's junk credit rating falls any further. To prevent that from happening, US Airways is contemplating a strategy that would involve selling or transferring some of the RJs on order to other US Airways Express commuter operators not owned by US Airways. That way, the planes would still operate under the US Airways banner, but the company could relieve itself from the costs of operating and staffing them. Such a change would require the approval of the pilots union. "The company needs to extricate itself from direct operation of regional jets," said local airline analyst Bill Lauer, and is likely conducting a "massive rethink" of MidAtlantic because of the capital expenditures it would require.
(See Story)
These negotiations will help stabilize US Airways and permit the company to obtain ATSB relief. During today's analyst a news media conference call US Airways chief executive Dave Siegel said the federal loan guarantee covenants require that any asset sales must be applied to the loan guarantee (payoff) with an inverse amortization order. In addition, S&P reported Management stated that it "will take any actions necessary to meet" those covenants, and is exploring major asset sales to raise funds that could be used to partly pay down that loan. Ratings will be lowered if such covenant relief is not achieved, while success in those negotiations would buy time for US Airways to seek further cost concessions from labor and pursue other expense initiatives.
The discussions are separate from the potential "work rule" and other contract changes, which could be requested by management and may have been discussed at today's Labor Advisory Council meeting. According to yesterday's Washington Post article regarding US Airways, the newspaper said, "A source close to the airline said executives will stress the urgency of the need for concessions with a "no kidding" approach and will indicate that they are prepared to begin taking bids on assets such as the Northeast shuttle or part or all of a hub operation."
(See Story)
Respectfully,
USA320Pilot
