Bankruptcy

[Rico]

When US filed chapter 11 for the second time they did not have DIP Financing until almost time to emerge from chapter 11 and survived.

And Frontier doesnt yet either and they are in chapter 11 and still flying.

US still has the 190s and the LGA and DCA slots as collateral.

Uh-huh...

You have nothing to worry about. 🙄

Frontier Airlines... That's what you are basing your optimism upon...? <_<

Ok then, I'll see your Frontier Airlines, and raise you ATA, Aloha, MaxJet, Eos, Skybus, Champion Air, and Focus Air... All of which were unable to access financing to survive. And that's not even counting the ongoing meltdowns at Tradewinds, Gemini, and Air Transport Services Group (Capital, ATI, and ABX Air).

But hey, Frontier is hanging on by a thread, right...?

Here's a fun little quote, read this from the Chicago Tribune, and ask yourself if you think Wall Street is not willing to throw US Airways under the bus (to save larger investments in the other legacy airlines)...???

If the 10 largest U.S. airlines don't boost revenues and restructure loans, their cumulative cash could shrink 62 percent to about $8.6 billion by year's end, estimated Philip Baggaley, chief credit analyst at Standard & Poor's.

That's not sufficient to cover one month's expenses at the carriers, he said. "In other words, in this simplified example, the airlines, as a group, would be at risk of bankruptcy," Baggaley wrote in a research report Friday.

To gain pricing power in a fragmented, overserved industry, U.S. airlines need to cut as much as 20 percent of domestic flights, analysts said. That's equivalent to grounding two major carriers.

Think the Feds are going to do something about US Airways going under...? Yeah right.

If jetBlue/LH takes over the LGA/DCA slots, and Southwest takes over Philly, then the cries over consolidation = less competition will be nothing more than a whisper... And is is a simple fact that the Goverment + Media + Public has little appetite for another industry bailout. The news stories will be call it an "unfortunate", yet "necessary" means for the marketplace to correct itself, and strengthen/protect the remaining carriers. 🙁

Ask yourself, what do you think it was it that United offered CAL to get them to go with the Star Alliance...?

My Guess...? It was the ability to step in and take the place of US Airways.


Nuff said.

 

[nycbusdriver]

...LCC has to find a way to make money with oil at $150 per barrel or greater, or go out of business.

The only way that will ever happen, and stick, is to charge fares commensurate with the cost of providing the service. Nickel and dime-ing for peripheral amenities may stave off the inevitable for a while, but if the passengers aren't willing to pay for the fuel it takes to get them from point A to point B, then they need to stay put.

The income levels of the typical traveler will not bear the expense of airline travel at $150/barrel of oil. The typical middle-class worker is already having to struggle to keep gas in his car to get to/from work.

With energy prices soaring, the public transport infrastructure barely able to function at present levels of ridership, the real estate market in the dumpster and wages far behind the power curve of meeting cost-of-living needs, this country (indeed this planet) is on the brink of meeting the perfect storm head-on. We've squandered the opportunity to make timely investments in alternative energy, and it may be too late to get that infrastructure up and running before economic disaster of unprecedented proportions takes place. We are poised to make the "Great Depression" on the 1930's look like a gala feast at the Ritz.

 

[US AIRWAYS FAN]

When US filed chapter 11 for the second time they did not have DIP Financing until almost time to emerge from chapter 11 and survived.

And Frontier doesnt yet either and they are in chapter 11 and still flying.

US still has the 190s and the LGA and DCA slots as collateral.

Didn't most of the DCA and LGA Slots go to Republic? US had a chance to buy those back but still has not.

 

[delldude]

When US filed chapter 11 for the second time they did not have DIP Financing until almost time to emerge from chapter 11 and survived.

And Frontier doesnt yet either and they are in chapter 11 and still flying.

US still has the 190s and the LGA and DCA slots as collateral.

Sell their soul once more?
Dwindling list of assets......
Losing proposition......
Career change is in order....

 

[700UW]

No the slots at DCA were only some for Express with US having the right to purchase them back.

And yes I have nothing to worry about as I am out of the industry.

 

[PHLFlyer]

I just wish all the negative thinkers would just quit now and improve my seniority.

Then when US is still around and they are pushing pencils at their temp. job I can laugh at their "rot in hell US" remarks on the message boards.

 

[sharktooth]

If US Airways goes into bankruptcy, it will most likely be Chapter 7 liquidation this time. There is little chance that anyone is going to sink in capital to keep any airline afloat (in Bankruptcy, or enough to exit it)...

Which, of course, explains why people continue to purchase LCC stock.

If you wish to light your hair on fire over something you obviously do not understand, that is certainly your issue.

There is a "price" of oil on the futures market that most everyone seems to like to quote as a harbinger of industry doom. Then, there is the price airlines pay as they fill up. An uncle who was a vice-president at Chevron once told me, the price at the pump is determined by how many tanker trucks exit the refinery. If the truck count goes up, they raise the price. Simple as that. There may or may not be a direct correlation between barrel price of crude and the stuff you put in your tank.

Much smarter people than me will tell you the price of crude, excluding the "options/futures" market run-up and the shameful devaluation of the dollar (thanks, bushco), is about $60 per barrel, loosely stated to be well within the operating means of most airlines.

The company has used the "price per barrel" as a bludgeon on labor for years. Time we educate ourselves as to the real significance of what is going on.

 

[usair_begins_with_u]

BK#3 is just a matter of time. Air travel is not a necesity, and with the growing economic uncertainties, the aviation industry is in big trouble. Travel is the first line item cut out of corporate budgets when markets soften. When the job market becomes weaker, and americans have less disposible income, their leisure travel declines rapidly. Airlines can't make money at current prices, so they cut capacity and add surcharges to regain profitability. Doing this, they will reduce demand even further, and planes will stay empty. Airlines cannot shrink into profitability, and they can't increase prices to raise revenue in the face of a major US economic downturn.

Dont worry, your savior obama will have planes that run on solar and wind power, everything is going to be ok.

 

[PITbull]

The only way that will ever happen, and stick, is to charge fares commensurate with the cost of providing the service. Nickel and dime-ing for peripheral amenities may stave off the inevitable for a while, but if the passengers aren't willing to pay for the fuel it takes to get them from point A to point B, then they need to stay put.

The income levels of the typical traveler will not bear the expense of airline travel at $150/barrel of oil. The typical middle-class worker is already having to struggle to keep gas in his car to get to/from work.

With energy prices soaring, the public transport infrastructure barely able to function at present levels of ridership, the real estate market in the dumpster and wages far behind the power curve of meeting cost-of-living needs, this country (indeed this planet) is on the brink of meeting the perfect storm head-on. We've squandered the opportunity to make timely investments in alternative energy, and it may be too late to get that infrastructure up and running before economic disaster of unprecedented proportions takes place. We are poised to make the "Great Depression" on the 1930's look like a gala feast at the Ritz.

I think you are straight on with your assertion.

 

[LD3]

US is on Morningstar's list See video

 

[X-U]

I don't believe a company can use Bankruptcy chapter 11 three times. Their next trip is liquidation "7".

This would actually be BK1 for LCC. It is not AAL or U or AWA, but an new comapny doing business as "US Airways". Having said that, as stated earlier, I don't see anyone investing in any airline that goes into bankruptcy in these times, so basically it would be CH7.

 

[Rico]

Which, of course, explains why people continue to purchase LCC stock.

If you wish to light your hair on fire over something you obviously do not understand, that is certainly your issue.

Ahhh, no.

People are buying the stock because it is so damn cheap, It is merely an inexpensive gamble that oil prices will go down (slightly), causing the stock price to go up by a few dollars (and then they sell...)

It is not some validation of US Airways financial situation.


Warren Buffet once said, that "at a low enough price, even dirt becomes valuable."

But hey, you just keep looking at your half full glass, and don't worry about a thing. 🙄

 

[UPNAWAY]

I copied this from the FT board. I think it sums up things better then most fo the rants.
*****************
"But what's the name of the domestic game -- where US is taking away perks and benefits, and charging for extras?

I think we have (in the vast majority of markets) a low-service commodity product where the name of the game is getting you to your destination as quickly and reliably as possible and, for individuals, at a price you're willing to pay.

Parker is betting that leisure travellers are buying on price and convenience.

He's betting that business travellers are buying primarily on convenience.

Are those irrational bets, when your only other choice is probably to go broke?"

 

[US1YFARE]

Are those irrational bets, when your only other choice is probably to go broke?"

All things considered equal, maybe, maybe not. Tough to answer. When you factor in US's unreliability, poor customer service, low employee morale, dirty planes, and nickel and diming of VFF.....I say it is not rationale. Parker and team sandcastle are betting against everyone else, including WN, who is providing more value and service to those that pay higher fares. Parker has all but abandoned that market and doubletalk will not fool those customers forever.

 

[UPNAWAY]

All things considered equal, maybe, maybe not. Tough to answer. When you factor in US's unreliability, poor customer service, low employee morale, dirty planes, and nickel and diming of VFF.....I say it is not rationale.

Reliability has improved tremendously both on OTP and Bags and it would seem we are headed in the right direction there.
That should help the Customer Service issue related to running a poor operation.
The Aircraft now have a routine cleaning schedule now and also the emphasis on Interior items via NEF, I think that issue is already much better and will continue to improve.
That only leaves the Customer Service Issues generated by low employee moral and that is the tough one. That is more (Even if you do not want to admit it) related to your collective past, 2BKs, cuts, pensions etc than anything merger related. As someone that has not been through what you all have I can say that most of the items you complain about seem small to me. I can only assume these “smallâ€￾ things are the proverbial straw that broke the camels back and if that is truly the case I don’t think any management can fix that.