Cosmo:
Cosmo asked: How can US Airways benefit from dragging out the PIT hub discussions (supposedly due to potential United replacement flying at DEN and elsewhere) when a resolution of that issue must, by definition, be reached by no later than January 5, 2004, at least two full months before United must file its POR with the bankruptcy court? And if United actually was planning to drop most or all of its DEN flying, why would it announce that its new LCO service will start there in February 2004?
Chip answers: If the parties agree to an asset sale, then this divestiture would be included in United’s POR, which must be filed before March 6. The POR can be filed at any time once United completes the required work, therefore, if an agreement is reached I suspect it would coincide with the January 5 Pittsburgh airport lease rejection. In addition, US Airways could extend its Pittsburgh leases on a month-to-month basis. In fact, on September 20 the Pittsburgh Tribune-Review wrote, “Despite the best efforts of county and state negotiators, the airline's hub at Pittsburgh International could be doomed, (Allegheny County chief executive Jim) Roddey told a gathering of local business leaders yesterday at the St. Barnabas Health System's Kean Theatre in Richland. "We face losing the hub either way," Roddey said. "But we will keep it as long as we can."
Cosmo, I never said United was going to “drop most or all of its DEN flying.†If you remember, I said United could transfer to US Airways about 30 to 35% of its domestic ASMs. If that holds true, then United’s LCO and the Mainline would retain about 65% to 70% of its domestic ASMs.
Cosmo commented: “Chip continues to play “fast and loose†with some of the facts about United’s future. To give just one example, Chip claimed (or at least implied) that United received the 5-month extension to file its POR over the objections of the creditors committee. But according to today’s issue of Aviation Daily (as reliable a “source†as any of Chip’s), “United on Friday reached a deal with its creditors committee and the consortium of airports on a motion to extend the exclusivity period for filing its Chapter 11 reorganization plan for five months.†That means United faces no creditor POR or airport evictions until at least March 6, 2004. Not quite what Chip implied, is it?â€
Chip responds: Cosmo, I never implied anything. I simply quoted the USA Today and then asked a rhetorical question. Furthermore, you do not even know me, therefore, how do you know Aviation Daily is as reliable a “source†as any of mine? Aviation Daily is an excellent publication, but it reports public news the day after the event occurred. People like Steve Lott and Mike Miller are connected – but they rarely report “inside informationâ€. By the way, why don’t’ you ask them their opinion of the probability of a United fragmentation?
Regardless, United does have an exclusive period to file it’s POR, but how do you know that the creditor’s committee, DIP financiers, or airport consortium will not come up with its own business plan that the United board endorses that sells assets, especially since it appears no exit financing is available? Furthermore, who first posted on this message board that San Francisco, Los Angeles, Denver, and Chicago were part of the consortium of airports that were objecting to United’s demands and are these same airports part of the UCT?
Cosmo, let’s look at the facts:
ALPA International President Captain Duane Woerth addressed the US Airways MEC in open session for two hours on September 11. Woerth told the ALPA MEC that United has been unable to get anybody to provide exit financing, and the government has changed their loan guarantee demands three times. Cosmo, why is that?
The ATSB is the only form of exit financing available, Woerth said. Cosmo, how come no other financial source is willing to provide United with exit financing?.
Woerth told the MEC that United has been very close to violating the DIP covenants a number of times and the company had a little better summer than forecast. He is concerned about the airline financially this fall.
Susan Carey of the Wall Street Journal wrote on, Thursday, September 18, that “United wants to raise $2.5 billion in exit financingâ€, which is $500 million more than the previous $2.0 billion guarantee denied by the Air Transportation Stabilization Board. Carey said the amount depends on the company’s cash position and the price of the funding, quoting an unidentified source. Cosmo, if United’s business plan is progressing, why does the airline need more financing and debt?
Interestingly, Reuters reported on September 12 United chief executive officer Jake Brace said United may seek to raise more than $2 billion in financing through other means, but declined to specify in what form or through what capital markets. Cosmo, could that be provided by RSA (to acquire assets) similar in scope to what United did to Pan Am, so Pan Am could emerge from bankruptcy?
Finally, US Airways chairman of the board David Bronner previously speculated to Charlotte Observer business writer Ted Reed that United has a 50-50 chance of surviving. Bronner said that if United were to sell assets, he would consider backing the purchase of some “if it would be beneficial to US Airways.†What’s so hard to understand about Bronner’s comments?
Cosmo, do not “shoot the messenger†because you do not like the news, but there is nothing I posted above that is not true. Meanwhile, I suspect we will know more about this in the not-so-distant future.
Just like in US Airways' formal restructuring, it's
that talks and if RSA provides a deal that the creditor's like, then the United board and the court will likely be forced to accept the terms.
Respectfully,
Chip
Cosmo asked: How can US Airways benefit from dragging out the PIT hub discussions (supposedly due to potential United replacement flying at DEN and elsewhere) when a resolution of that issue must, by definition, be reached by no later than January 5, 2004, at least two full months before United must file its POR with the bankruptcy court? And if United actually was planning to drop most or all of its DEN flying, why would it announce that its new LCO service will start there in February 2004?
Chip answers: If the parties agree to an asset sale, then this divestiture would be included in United’s POR, which must be filed before March 6. The POR can be filed at any time once United completes the required work, therefore, if an agreement is reached I suspect it would coincide with the January 5 Pittsburgh airport lease rejection. In addition, US Airways could extend its Pittsburgh leases on a month-to-month basis. In fact, on September 20 the Pittsburgh Tribune-Review wrote, “Despite the best efforts of county and state negotiators, the airline's hub at Pittsburgh International could be doomed, (Allegheny County chief executive Jim) Roddey told a gathering of local business leaders yesterday at the St. Barnabas Health System's Kean Theatre in Richland. "We face losing the hub either way," Roddey said. "But we will keep it as long as we can."
Cosmo, I never said United was going to “drop most or all of its DEN flying.†If you remember, I said United could transfer to US Airways about 30 to 35% of its domestic ASMs. If that holds true, then United’s LCO and the Mainline would retain about 65% to 70% of its domestic ASMs.
Cosmo commented: “Chip continues to play “fast and loose†with some of the facts about United’s future. To give just one example, Chip claimed (or at least implied) that United received the 5-month extension to file its POR over the objections of the creditors committee. But according to today’s issue of Aviation Daily (as reliable a “source†as any of Chip’s), “United on Friday reached a deal with its creditors committee and the consortium of airports on a motion to extend the exclusivity period for filing its Chapter 11 reorganization plan for five months.†That means United faces no creditor POR or airport evictions until at least March 6, 2004. Not quite what Chip implied, is it?â€
Chip responds: Cosmo, I never implied anything. I simply quoted the USA Today and then asked a rhetorical question. Furthermore, you do not even know me, therefore, how do you know Aviation Daily is as reliable a “source†as any of mine? Aviation Daily is an excellent publication, but it reports public news the day after the event occurred. People like Steve Lott and Mike Miller are connected – but they rarely report “inside informationâ€. By the way, why don’t’ you ask them their opinion of the probability of a United fragmentation?
Regardless, United does have an exclusive period to file it’s POR, but how do you know that the creditor’s committee, DIP financiers, or airport consortium will not come up with its own business plan that the United board endorses that sells assets, especially since it appears no exit financing is available? Furthermore, who first posted on this message board that San Francisco, Los Angeles, Denver, and Chicago were part of the consortium of airports that were objecting to United’s demands and are these same airports part of the UCT?
Cosmo, let’s look at the facts:
ALPA International President Captain Duane Woerth addressed the US Airways MEC in open session for two hours on September 11. Woerth told the ALPA MEC that United has been unable to get anybody to provide exit financing, and the government has changed their loan guarantee demands three times. Cosmo, why is that?
The ATSB is the only form of exit financing available, Woerth said. Cosmo, how come no other financial source is willing to provide United with exit financing?.
Woerth told the MEC that United has been very close to violating the DIP covenants a number of times and the company had a little better summer than forecast. He is concerned about the airline financially this fall.
Susan Carey of the Wall Street Journal wrote on, Thursday, September 18, that “United wants to raise $2.5 billion in exit financingâ€, which is $500 million more than the previous $2.0 billion guarantee denied by the Air Transportation Stabilization Board. Carey said the amount depends on the company’s cash position and the price of the funding, quoting an unidentified source. Cosmo, if United’s business plan is progressing, why does the airline need more financing and debt?
Interestingly, Reuters reported on September 12 United chief executive officer Jake Brace said United may seek to raise more than $2 billion in financing through other means, but declined to specify in what form or through what capital markets. Cosmo, could that be provided by RSA (to acquire assets) similar in scope to what United did to Pan Am, so Pan Am could emerge from bankruptcy?
Finally, US Airways chairman of the board David Bronner previously speculated to Charlotte Observer business writer Ted Reed that United has a 50-50 chance of surviving. Bronner said that if United were to sell assets, he would consider backing the purchase of some “if it would be beneficial to US Airways.†What’s so hard to understand about Bronner’s comments?
Cosmo, do not “shoot the messenger†because you do not like the news, but there is nothing I posted above that is not true. Meanwhile, I suspect we will know more about this in the not-so-distant future.
Just like in US Airways' formal restructuring, it's
Respectfully,
Chip
