Cost Concerns Weigh On Us Airways

Schwanker

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Dec 20, 2002
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Costs concerns weigh on US Airways
By August Cole, CBS.MarketWatch.com
Last Update: 11:09 AM ET Dec. 11, 2003

SAN FRANCISCO (CBS.MW) -- US Airways shares fell more than 8 percent Thursday after a credit ratings agency warned that it might downgrade its debt because of cost and ticket pricing concerns.

Standard & Poor's put $1.6 billion US Airways debt on CreditWatch negative late Wednesday but left aircraft-backed loans alone. The stock (UAIR: news, chart, profile) fell 8.6 percent to $5.21 with more than 92,000 shares changing hands.

"The US Airways CreditWatch placement is based on concerns over increasing pressure from low-cost competitors, as well as continuing industrywide problems of weak pricing and high fuel prices," analyst Philip Baggaley of S&P wrote.

Shares of US Airways have lost more than a quarter of their value since its Oct. 21 re-listing on the Nasdaq. The Arlington, Va.-based airline emerged from bankruptcy last March 31.

Although the airline has vowed to cut more of its costs, it hasn't been enough to ease concerns on Wall Street.

"We do not believe that US Airways can survive in its present form," analyst Ray Neidl of Blaylock & Partners wrote in a report earlier this week. He rates the stock "sell" because the company "could be forced to re-enter Chapter 11 as early as next year if the model is not modified."

August Cole is spot news editor at CBS.MarketWatch.com in San Francisco.
 
With Southwest entering Philly I think US Air needs to figure out this new business plan immediately. They can not slug it out with Southwest on fares because they will run out of capital much sooner than Southwest. I will repeat they are not going to run Southwest out of Philly, it just ain't gonna happen.


With the announcement of the service to the 6 cities starting in May, US will start losing revenue when they match these fares. How will US compete with southwest when you can go coast to coast for $299 last minute? Companies are going to continue to have their employees travel on the airline with the best fare. US will match these fares but they will continue to bleed more dollars. Let's face it after this past quarter, when southwest was not even in philly, they lost a ton of money. What is going to be like for 2nd and 3rd quarter next year?

How do you compete with them in this current economic/aviation environment??? Unfortunately the LCC's are here to stay and every analyst will tell you they will continue to capture market share over the next 10 years.

Best of Luck US, I am rooting for you!!!
 
well I figured U's way of fighting back against lcc! They tend to throw an RJ or two and hope that'll do the trick!

Hello DAVE Wake up and smell the coffee! It's burning and you havent put the fire out! Fix the Fares and maybe that would help save the company. But Do Not
Come Back to The Employees for more paycuts
 
robbedagain said:
But Do Not
Come Back to The Employees for more paycuts
Do you really believe this won't happen, that we are untouchable and will be left alone, unscathed? Let me be the first to clue everyone in, it's going to happen, and it won't just be pay cuts, but jobs cuts as well.

So bring it on everybody, kill the messenger if it makes you feel any better, but changes are on the horizon and we aren’t going to like the way it looks! To the ones saying shut it down, guess what, the older senior people will not sacrifice themselves for your sake, or even for the union’s sake, because self preservation rules.

Certain people on here will say I did a complete change, nay, I just woke up and saw reality, an ugly scary looking character I might add. Ranting over and over that Dave & Dave can't touch us, better not touch us, is like visiting Disney World. All the posturing by the unions leaders makes us feel better, but they know the party is far from over. If you're having a time of it buying your baby new shoes with the cuts we already have, then start storing food for the winter, and make sure you are on good terms with family members. It ain’t over folks…you heard it right here on these boards from cavalier.
 
Cav I agree .... Ignorance can be blinding......Its amazing how people will say its Daves fault..... leave us alone ... It will happen wether you like it or not. Our cost are way high and yes Dave had a big opportunity during Bk that he missed because he did want it to be employee friendly and it has come back to bit him in the butt......... Productivity as much as i hate to say it being a crew member will def have to be increased and we will have to adapt to todays new industry or fail. Its that simple. Dave pay no attention to the people who say full pay to the last day and who say dont come our way. Do what you have to do finally to compete. If it wasnt you it would be someone else to blame. We have never gotton over the good times of yesterday when we were the highest paid employees in the industry. Yes its hard to adapt and change because our lifestyles are affected but we have no choice . It isnt Daves fault it s all of ours combined with things we have no control over. Were the ones who need to wake up and smell the burning coffee not Dave. Hes been saying this time and time again, all we hear is we already gave dave.... AMAZING !! Wow Obviously didnt take Buisness 101 in college!
 
I only say that because I'm working at one of the "expressed out" stations that's receiving the A-319 back in Feb. How much more can he take from us? Already we're at 13.01 an hr and with the union due rising to 30.00 (for those under 12.00) and 44.00 (for those over 12.00). Some of us couldnt even transfer even when there was the chance due to various reasons. I firmly believe that the fares should be lowered BEFORE Taking Any More Pay Cuts. Also, why doesnt Dave give up over half of his pay and medical? For those at Mainline Express Stations such as me, what can we give up before heading to Walmart wages?
 
cavalier said:
robbedagain said:
But Do Not
Come Back to The Employees for more paycuts
Do you really believe this won't happen, that we are untouchable and will be left alone, unscathed? Let me be the first to clue everyone in, it's going to happen, and it won't just be pay cuts, but jobs cuts as well.

So bring it on everybody, kill the messenger if it makes you feel any better, but changes are on the horizon and we aren’t going to like the way it looks! To the ones saying shut it down, guess what, the older senior people will not sacrifice themselves for your sake, or even for the union’s sake, because self preservation rules.

Certain people on here will say I did a complete change, nay, I just woke up and saw reality, an ugly scary looking character I might add. Ranting over and over that Dave & Dave can't touch us, better not touch us, is like visiting Disney World. All the posturing by the unions leaders makes us feel better, but they know the party is far from over. If you're having a time of it buying your baby new shoes with the cuts we already have, then start storing food for the winter, and make sure you are on good terms with family members. It ain’t over folks…you heard it right here on these boards from cavalier.
Cav,

I agree with everything you've said here. I think to assume that Dave is not going to attempt to hit the W-2's and staffing levels is foolhardy at best.

The term "Productivity Increases" always implies doing more with less....and I think the imbalance we have with that of the LCC's regarding manning levels per Acft is going to become a major focal point soon....sadly it almost has too in realistic and competative terms. The question is where???

However,I do not see U winning it's battle with the IAM over the Airbus work...so if in fact we do stay going ?...We are going to have to grapple with the fact that our staffing levels will never mirror that of any of the LCC"s...and in some cases the other majors whom have sold themselves down the river on this subject.

I think where people were flippng out over your previous comments of late was due in part to a mis-understanding of what you were saying? I concluded that you have come to terms with the grim reality of the circumstances we face....yet others may have seen it as a capitulation to Dave's whims. I did not see that by the way...but I did have to wonder for a bit?

I agree that the Seniors will eat their young when pressed...we have seen it how many times before...regardless of which labor group is involved...yet I cannot accept and I will not willingly give up anything else to a so-called leadership group that can literally P1SS away 2 Billion Dollars in concessions...and still be ringing the charity bell like the Salvation Army during the holiday season. I believe Wall Street has rendered a verdict on U's lack of leadership too.

I caught a lot of grief for supporting Dave at first....I looked at it as what other choice do we have if we want this company to stay in business ?? Boy a butt-load of good that did in the end. Sure we gained another year of employment..and that's a positive , but when I reflect back on that year causing me to leave my home and at a lessor salary with added expenses tossed into the mix....I have to wonder at times if I did the right thing afterall?

Sure, I wouldn't trade the education I got or the friends I made in PIT for anything...but it damn sure didn't come without sacrifice. I know I'm far from alone on this type of ordeal...and I wish more had the chance to remain in the first place.

Cav...our agreements have usually over-shadowed where we fail to agree in the past...I just hope I never see you posting about wholesale capitulaton to management here. I'm willing to work for and with a leader...but frankly we have no such animal in this little zoo....My Concessions Stand is Closed...They will have to rob me this time.
 
AOG-N-IT said:
Cav...our agreements have usually over-shadowed where we fail to agree in the past...I just hope I never see you posting about wholesale capitulaton to management here. I'm willing to work for and with a leader...but frankly we have no such animal in this little zoo....My Concessions Stand is Closed...They will have to rob me this time.
I agree 2000% and thanks for understanding my posts because you are accurate in your interpretation of them.

I know for certain, and I know I am sounding like Chip here, but I do know for certain they are coming back for more. Mark it down that Cav said so, because it WILL happen.
How do I know? I can't say, but I do know and putting my Cav name on the preverbal limb.

No, I will absolutely not support further cuts, but, I don't think I will need to even worry about another pay cut because I am convinced I will be gone.
 
cavalier said:
I agree 2000% and thanks for understanding my posts because you are accurate your in your interpretation of them.

I know for certain, and I know I am sounding like Chip here, but I do know for certain they are coming back for more. Mark it down that Cav said so, because it WILL happen.
How do I know? I can't say, but I do know and putting my Cav name on the preverbal limb.

No, I will absolutely not support further cuts, but, I don't think I will need to even worry about another pay cut because I am convinced I will be gone.
Cav,

I won't press you on your insight here out of respect...but I would sure love to know what you have discovered?

I know if more cuts come...I'll likely be joining you on the outside looking in too..but such is life.

Feel free to drop me a PM.....if you are so inclined? Strict confidence will apply.
 
Theres has been no secret afa and the company left productivity doors open . I dont think there will be w2 cuts i do believe however indirectly other areas will be hit hard. I for one will reluctly accept it like we all will since the alternative again will be chapt 11. One day things will get better !
 
CAV,

Give it a break. You are not saying anything new. Management had every intention of coming to the employees, that is why they started out with the IAM and your job, I might add.

Heard it from CAV, my butt. Only person that seems not to have known or had any clue is obviously you, once again, in the dark.

I suspect your all ready for your "yes" save me vote" again like last time.
 
PITbull said:
CAV,

Give it a break. You are not saying anything new. Management had every intention of coming to the employees, that is why they started out with the IAM and your job, I might add.

Heard it from CAV, my butt. Only person that seems not to have known this is you, once again, in the dark.

I suspect your all ready for your "yes" save me vote again.
Pitbull. I do have inside information, believe it or not it matters not to me. Your mindless rants and screaming at anyone who doesn't see your world view is tiring, pathetic and plain boring. I never did a damn thing to you but for same strange reason you're making this a personal matter. You don't see me on here blasting your every post. I will not play with you like MMW did playing tit for tat all night long.
 
PITbull said:
CAV,

Give it a break. You are not saying anything new. Management had every intention of coming to the employees, that is why they started out with the IAM and your job, I might add.

Heard it from CAV, my butt. Only person that seems not to have known or had any clue is obviously you, once again, in the dark.

I suspect your all ready for your "yes" save me vote" again like last time.
PITBull,

Lighten up sweetcheeks...Cav has evidently come across some information , other than rumors and assumptions that has rocked his/her world....maybe he/she doesn't have your particular insight on things?....God knows I'm in the dark when it comes to issues of this kind...but I'll rely on whats in the wind and be right 95% of the time.

We have all been assuming headcount reductions or Dave coming around with the collection plate again...but until we see fact , its still nothing more than an educated reading of the old tea leaves from last years cup.

I highly doubt that Cav is going to be a " Yes Vote " based on what he/she wrote in the last post. He/She like myself will likely be on the chopping block regardless of what Dave promises our union....so where is this self-saving motivation to vote Yes for either of us??....we won't be saved either way ..So a NO is a NO is a NO

Being at the lower end of the senority list does not inspire confidence in this situation...nor does it remotely stimulate a Yes Vote in light of what the last 18 months of Daves reign has tought us. Right? We're assumed to be done regardless..so why go out with a whimper?

I'll say it again...and I'm sure many will remember , I supported Dave at first...and I thought I was doing what was right to keep the company going...I did so at personal risk...and barely dodged the final bullet in the aftermath of that support....but I was also on record here for saying that Dave had one chance to show us what he was made of.....and now we know with 100% certainty where that lies in the grass.

My number can be up just as easily as Cavs or the next persons...but I'm not conceeding or capitulating a damn thing to anyone here again. Once a trust is broken...That's It !!! I don't have to be shown a second time how mean spirited and rudderless we are at the top. I'm convinced !!!!
 
"I will not play with you like MMW did playing tit for tat all night long."

Hey! Now how did I get dragged into this! :eek:


AOG -

I agree with you 100%. I was also very supportive of Dave and "the plan". I was willing to give him time to prove that his plan would work and that there were better days ahead. The constant barage of doom and gloom. the lack of employee respect, the idiotic decisions that continue to be made on a daily basis makes it feel like we are on a ship with no set course. We are a drift at sea and no one is steering us in the right direction.

I don't think there is an employee in the company that hasn't figured out that they are swinging the bat at the employee pinata again, in hopes of beating more out of us. I think it will be a very hard sell. For a management team to be that short sighted, while in bankruptcy, to not know that the LCC threat was going to increase pressure on us, then they don't deserve to be where they are.

I would love to hear anyone tell me that the company has taken full advantage of the items that they negotiated in the concessionary contracts. It is my belief that they haven't even full implimented the savings and productivity issues in the contracts that they have signed already.

I would feel much better about things if they had proven to me that we are actually changing the "business plan". That we have focus and direction and that we aren't just flying by the seat of our pants. They have failed to prove to me that they are able to pull of anything but a song and dance routine.
 
MMW...they will show their hand and the wait will not be a long one.

I agree with the points you made, they are only reasonable considering what we all gave, but yet we still are hanging on wondering what, when, where it's going to come from next. It doesn't seem humane does it. I guess venting on these boards is healthy, but that's all it is, simply venting and not changing anything, we have no real control. Not having have control when you’re being affected personally drives some people mad. Let’s go after them for cruel and unusual punishment while we are venting on these boards.