Bloomberg: US Airways Getting Potential Bidders, Head of Alabama Fund Says



Usfliboi said: they had to plan for such an event and nothing has changed since 9/11 nothing.
Chip comments: How about a deepening double dip recession, fuel climbing to $30 barrel, ticket prices at 20-year lows, and the discovery that Iraq had nuclear materials? Should the U.S. government been able to predict North Korea has nuclear weapon materials too? In regard to fuel hedging, for those who think it is so easy to trade the commodity or equity markets, I recommend you take a visit to the NYMEX and watch energy traders.
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[BR][FONT face=Times New Roman size=3]The fifty day period for additional bids expires on November 14. Any additional bids must be higher than the RSA offer, but the concern is will the bids be labor friendly or will they be to liquidate the airline? US Airways must submit its choice from the Equity Plan Sponsor bidders to the court by November 24. Is is likely, investors like RSA and TPG, who are labor friendly, will base their bids on labor participation to further reduce the cost structure to match revenue projections.[/FONT][BR][BR][FONT face=Times New Roman size=3]Chip[/FONT]
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N628AU, this is a new article on the same subject published by Bloomberg News. Dave Castevetler provided additional information, thus I felt it warranted its own thread.

Usfliboi, the US employees who can find a better paying position will do so and the one's who cannot will provide required sacrifice. People will not self-inflict more pain than necessary.

The problem is current industry fundamentals do not support high cost network carriers. Can you explain to me how the airline can obtain revenues to cover expenses with the continued terrorist attacks, the double dip recession, oil rising to over $30 per barrel, air fares at 20 year lows, rising security costs, high war-risk insurance premiums, and the pending war with Iraq?

The viability of US and its restructuring plan has investor support, otherwise there would not be additional Equity Plan Sponsors apparently ready to outbid RSA.

I suspect the US employees will work with management again to help save the airline. What other choice do most people have?

What turnip have they planted that will allow them to squeeze anything from? I know this is speculation however speculate this! They will have a hard hard time squeezing this time...
Thanks for the additional info Chip, I just figured we could add it in the other thread and condense how much there is to sift through on here.

Addressing the revenue issue, it is hard to quantify or for that matter convince anyone to take additional cuts when (1) None of the revenue enhancing programs has taken effect, and (2) Not all cost cutting measures are implemented until January (for example changes to benefits). I agree we are still in survival mode, but either the issues now on the table were planned for by upper management, or upper management has once again failed the employees, which would be a huge disappointment to those of with faith in Dave. I do not expect him to see the future, but with all the degrees in CCY coupled with the beancounters at the ATSB, I cannot believe they would not have taken into account the economy still being down (did anyone really expect it to be turned around big time from July to now)? A war with Iraq is something else, but I believe the drum beating is worse to the economy than just getting something over with.

Also, does anyone have a good handle on our CASM now, and what it will be by January 1? The lease renegotiations and paycuts have to show up somewhere. I imagine cash burn is still on the high side now, and is probably being exacerbated by payout severance packages to employees right now.
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Today, October 18, Dave Siegel said in his weekly employee message, You're going to see and hear of a number of additional regional jet deals completed over the next several weeks. I'm excited to be announcing a large one at such time. He also said Mesa has agreed to participate in J4J.

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N628AU, your analysis is correct and I agree with virtually all that you said. However, in my opinion the double dip recession, pension problem, and continued revenue short fall has been difficult to predict. When will it get better?

This week's earnings news was unbelievable. AA & UA burning through $30 million per day in operational losses and one-time charges?

The US CASM is probably a moving target with lease payments constantly changing, but the important point is the cash burn rate until costs and revenue stabilize. Only then will there be a true CASM & RASM picture.

The good news from a revenue perspective is the DOT's approval for Midway to fly again and the Mesa agreement to begin flying additional RJs for US Airways Express on December 1. This will put 38 additional RJs into the system in 2003.

Chip, I agree as well, with a few caveats. First, we are not in a double-dip recession. The economy remains soft, and we are risk for a double-dip, but the economy is still growing, albeit at a snails pace. The looming risk seems to be becoming a self-fufilling prophecy, as businesses continue to hunker down for it.

Even as bad as the earnings reports were, for the most part they were above consensus estimate (I think UAL may be the exception to this). As for when the economy turns around, that is the $100,000 question. No one knows for sure, but like I said in another thread, I hope mangement prepared for the worst setting out the business plan, and is hoping for the worst. I am glad to see they are working on plans constantly, it is a welcome change from, There is no Plan-B, but coming back to us must only be a last resort, or Dave will lose whatever trust he has built up.

As for the RJ expansion, Midway may have received DOT approval, but until they nail down financing, it is not even worth looking forward to. I am still waiting for reports that the Mesa MEC has agreed to J4J. Right now, contract negotiations are on going, and Mesa ALPA is using J4J as bait to get Mesa Management to agree to a single seniority list for Mesa/Air Midwest/CCAIR/Freedom Airlines.
I agree.... and we were suppose to be far far ahead of others in the cuts and moves we had made...again i expect and demand that dave and company look forward' and if they use the war on Iraq as an excuse ill have a hard time swallowing that one.... they had to plan for such an event and nothing has changed since 9/11 nothing.. we still are sabre talking with iraq and others gas is increasing but did anyone hedge? The worst case shouldve been planned along with the bottom line...this all should be very interesting, dave has all the tools and much more than he asked for now lets see the brains do the work they are being paid for!

The last I checked the Mesa MEC had not signed off on J4J. It was put in front of them, and they replied they would sign it once they got a single merged seniority list for all divisions. This was to protect the CCAIR guys who could have sold the Mesa pilots down the river on numerous occasions, but were told by the Mesa MEC, Just hang with us, we'll take care of you, only to get the shaft time and time again. If Mesa's MEC has signed off on the deal, they have once again stabbed the CCAIR guys in the back. because Ornstein flat out refuses to have merged list.