USA320Pilot
Veteran
On Friday, April 30, the Washington based pilots held a LEC meeting to receive a report from the Negotiating Committee on LOA 91, then a question and answer period with US Airways chief executive officer Bruce Lakefield, and then accomplished normal agenda items. Listed below are some of the Lakefield Q&A’s.
Q. How committed are you to keeping MDA a part of USAirways? How advantageous is it for you to do so?
A. We pay an 8% premium to the affiliates and he would like to keep that 8%, thus keeping MDA is financially advantageous.
Q. What will happen if we vote down LOA 91? If GECAS pulls as a result, and those deliveries go elsewhere, how serious is that for us? Could we find another investor?
A. We will lose $200 million in projected revenue and go into default on the ATSB loan. That loan could be called and we would domino out of business. The EMB 170/175 are very attractive to other airlines and we have delivery positions sewn up with the GECAS loan.
Q. Even if we ratify LOA 91, what is the likelihood that GECAS will pull some deliveries anyway? Where will those deliveries go?
A. GECAS could have pulled the plug already, we are in default on the MAC (Major Adverse clause). They have not pulled any deliveries. Lots of other airlines want these planes.
Q. It has been said that the GECAS concerns were a fabricated and orchestrated effort by the company to scare us into approving LOA 91, thus allowing you to send those SJ's elsewhere as was your plan all along. How would you respond to that?
A. GECAS cares about GECAS. They have no opinion and care only that they are making a business decision. Mr. Lakefield says that GECAS has been his major concern for weeks and has spent most of his time assuaging their fears.
Q. What message did the MEC send to you and Dr. Bronner by recalling the Chairman and Vice Chairman of our NC? Was that message also picked up by the financial community?
A. Loud and clear. It was addressed in his remarks. There was reason for GECAS to worry and expressed it to Mr. Lakefield.
Q. Why did Dave Siegel resign? With you, as an investment banker, taking his place, what message did that send to the financial community? What message should that send to us and the rest of the employees on USAirways?
A. No comment. Lakefield is not here for a “restructuringâ€.
Q. What is the timeline that we are on in our effort to "reinvent" ourselves? Who determines this timeline? Please tell us your personal sense of urgency, and what is Dr. Bronner's?
A. Months, not years. No deadline. Again, he seems to be resigned to the fact that we have control of our destiny. I really got the feeling that he would let us sink if we don t try to save ourselves. I know that I would like to go back to the good life in Naples rather than beat my head against a wall with unions.
Q. The pilots begin the negotiating process with you next week. When do we realistically have to have a TA? Why? If we do well in the second quarter, will that give us more time?
A. Summer looks good. There is a paradigm change and the revenue is never going to return to levels required to support the old legacy carriers. Another recurring theme was that the LCCs have a young labor force that is less expensive and that will not change.
Q. Are you going to start negotiations with any other labor group while you are in negotiations with the pilots? How will you get them to the table? Are they waiting on the pilots to strike a deal first? If so, will that give you enough time to negotiate with each one of them in turn?
A. The pilots have to lead. The other groups look to us for leadership. US Airways has a social responsibility to the lowest paid workers to insure that they earn a living wage. You cannot cut a $25,000 a year worker to $20,000.
Q. How close are you to selling assets from US Airways? What will trigger a decision to sell?
A. Not asked, but consistently emphasized it was cheaper to keep everything.
Q. Some say that you already have a plan for us, be it Chapter 11, liquidation, or merger, and this "reinvention" is just an exercise in filling the squares for liability purposes before you implement that plan. What would your response be to that?
A. “I am not here for a restructuring.â€
Q. Does it really matter what we, the pilots, do? Do we really have the ability to shape our destiny on this airline?
A. Yes, we are in control of our destiny. There is a lot more to do.
Respectfully,
USA320Pilot
Q. How committed are you to keeping MDA a part of USAirways? How advantageous is it for you to do so?
A. We pay an 8% premium to the affiliates and he would like to keep that 8%, thus keeping MDA is financially advantageous.
Q. What will happen if we vote down LOA 91? If GECAS pulls as a result, and those deliveries go elsewhere, how serious is that for us? Could we find another investor?
A. We will lose $200 million in projected revenue and go into default on the ATSB loan. That loan could be called and we would domino out of business. The EMB 170/175 are very attractive to other airlines and we have delivery positions sewn up with the GECAS loan.
Q. Even if we ratify LOA 91, what is the likelihood that GECAS will pull some deliveries anyway? Where will those deliveries go?
A. GECAS could have pulled the plug already, we are in default on the MAC (Major Adverse clause). They have not pulled any deliveries. Lots of other airlines want these planes.
Q. It has been said that the GECAS concerns were a fabricated and orchestrated effort by the company to scare us into approving LOA 91, thus allowing you to send those SJ's elsewhere as was your plan all along. How would you respond to that?
A. GECAS cares about GECAS. They have no opinion and care only that they are making a business decision. Mr. Lakefield says that GECAS has been his major concern for weeks and has spent most of his time assuaging their fears.
Q. What message did the MEC send to you and Dr. Bronner by recalling the Chairman and Vice Chairman of our NC? Was that message also picked up by the financial community?
A. Loud and clear. It was addressed in his remarks. There was reason for GECAS to worry and expressed it to Mr. Lakefield.
Q. Why did Dave Siegel resign? With you, as an investment banker, taking his place, what message did that send to the financial community? What message should that send to us and the rest of the employees on USAirways?
A. No comment. Lakefield is not here for a “restructuringâ€.
Q. What is the timeline that we are on in our effort to "reinvent" ourselves? Who determines this timeline? Please tell us your personal sense of urgency, and what is Dr. Bronner's?
A. Months, not years. No deadline. Again, he seems to be resigned to the fact that we have control of our destiny. I really got the feeling that he would let us sink if we don t try to save ourselves. I know that I would like to go back to the good life in Naples rather than beat my head against a wall with unions.
Q. The pilots begin the negotiating process with you next week. When do we realistically have to have a TA? Why? If we do well in the second quarter, will that give us more time?
A. Summer looks good. There is a paradigm change and the revenue is never going to return to levels required to support the old legacy carriers. Another recurring theme was that the LCCs have a young labor force that is less expensive and that will not change.
Q. Are you going to start negotiations with any other labor group while you are in negotiations with the pilots? How will you get them to the table? Are they waiting on the pilots to strike a deal first? If so, will that give you enough time to negotiate with each one of them in turn?
A. The pilots have to lead. The other groups look to us for leadership. US Airways has a social responsibility to the lowest paid workers to insure that they earn a living wage. You cannot cut a $25,000 a year worker to $20,000.
Q. How close are you to selling assets from US Airways? What will trigger a decision to sell?
A. Not asked, but consistently emphasized it was cheaper to keep everything.
Q. Some say that you already have a plan for us, be it Chapter 11, liquidation, or merger, and this "reinvention" is just an exercise in filling the squares for liability purposes before you implement that plan. What would your response be to that?
A. “I am not here for a restructuring.â€
Q. Does it really matter what we, the pilots, do? Do we really have the ability to shape our destiny on this airline?
A. Yes, we are in control of our destiny. There is a lot more to do.
Respectfully,
USA320Pilot
