Was filing Ch. 11 a knee-jerk reaction for US? United news seems to indicate it is a possibility.....stock is up.....unions tripping over each other to make concessions......should US have kept itself out of court and worked harder with it''s rank-and-file before taking the path it is on now?
DID US JUMP THE GUN?
- Thread starter gilbertguy
- Start date
Lets try this again.
The problem with USAirways was the very High lease rates we where paying on the aircraft. Due to very favorable up front lease terms, the back end was very ugly. I think the employess would have given prior to a BK filing, but we still would not turn a profit due to the aircraft leases.
The problem with USAirways was the very High lease rates we where paying on the aircraft. Due to very favorable up front lease terms, the back end was very ugly. I think the employess would have given prior to a BK filing, but we still would not turn a profit due to the aircraft leases.
Absolutely not. US Airways was on the brink of an involuntary filing by creditors, but beat them to the courthouse. An involuntary filing would probably have begun the liquidation process.
ITRADE
Veteran
[P]
[BLOCKQUOTE][BR]----------------[BR]On 11/12/2002 10:15:44 AM DCAflyer wrote:
[P]Absolutely not. US Airways was on the brink of an involuntary filing by creditors, but beat them to the courthouse. An involuntary filing would probably have begun the liquidation process.[/P]----------------[/BLOCKQUOTE]
[P]From what I understand, DCAflyer is right. US had defaulted on several payments, had at least two default suits already filed (small aircraft leasing cos), and was running through cash faster than a teenage girl at Nordstrom. [/P]
[P]I don't think there was much of a choice.[/P]
[BLOCKQUOTE][BR]----------------[BR]On 11/12/2002 10:15:44 AM DCAflyer wrote:
[P]Absolutely not. US Airways was on the brink of an involuntary filing by creditors, but beat them to the courthouse. An involuntary filing would probably have begun the liquidation process.[/P]----------------[/BLOCKQUOTE]
[P]From what I understand, DCAflyer is right. US had defaulted on several payments, had at least two default suits already filed (small aircraft leasing cos), and was running through cash faster than a teenage girl at Nordstrom. [/P]
[P]I don't think there was much of a choice.[/P]
Plus U's action seems to make it easier for UAL to get what it needs. Someone had to do it and since U was going to be foreced into it - seems to make the best sense.
According to USAToday [yeah don't laugh] UAL still indicates it may miss a large debt payment on Dec 2
According to USAToday [yeah don't laugh] UAL still indicates it may miss a large debt payment on Dec 2
Don't confuse UA and US situations. US had no choice but to file for Ch.11 to protect their interests. Otherwise, they'd have been forced into an involuntary bankruptcy filing based on being in cross-default on debt obligations. And they'd have had less control over their situation.
UA is current with all payments and obligations, even though they're negotiating for some type of relief on the remaining debt payments due in December.
However, be careful how you interpet stock price and news. My opinion is that the average investor doesn't have a clue how to properly interpret airline industry news. Hence, the volatility of airline stocks, especially in this environment. While UA has had a bit of good news lately, make no mistake about it, we still have a tough road to hoe to avoid bankruptcy. The IAM, dispatchers and engineers still haven't reached their concessionary T/A's. It's anybody's guess how the ATSB will rule in terms of our loan guarantee application. I remain optimistic for two reasons. One, Glenn Tilton is firmly in control of the situation. The more I hear him speak, the more convinced I am that he is the take-charge leader that UA has lacked for years. I only wish we had him here a year ago. No way we'd be on the verge of bankruptcy if that were the case.
Two, the relationship Tilton enjoys with each of UA's unions is the best it has ever been at this company. And that is saying something. He has already re-built more trust and burned bridges than anyone thought possible. So I think good things like ahead for UA. However, it still remains to be seen whether we'll have to go through bankruptcy to turn the corner.
In hindsight, you can clearly say that had US' unions worked harder with senior management, bankruptcy could have been avoided. But when you consider the poor leadership, people skills, broken promises and threats of Wolf and Gangwal, it's no surprise there was a hesitation to trust them and work with them. I think if Siegel had come to US 6 months or a year before he actually did, your situation would be much different. But the situation is what it is. US had no choice but to file for Ch.11. And UA may eventually be faced with the same choice.
UA is current with all payments and obligations, even though they're negotiating for some type of relief on the remaining debt payments due in December.
However, be careful how you interpet stock price and news. My opinion is that the average investor doesn't have a clue how to properly interpret airline industry news. Hence, the volatility of airline stocks, especially in this environment. While UA has had a bit of good news lately, make no mistake about it, we still have a tough road to hoe to avoid bankruptcy. The IAM, dispatchers and engineers still haven't reached their concessionary T/A's. It's anybody's guess how the ATSB will rule in terms of our loan guarantee application. I remain optimistic for two reasons. One, Glenn Tilton is firmly in control of the situation. The more I hear him speak, the more convinced I am that he is the take-charge leader that UA has lacked for years. I only wish we had him here a year ago. No way we'd be on the verge of bankruptcy if that were the case.
Two, the relationship Tilton enjoys with each of UA's unions is the best it has ever been at this company. And that is saying something. He has already re-built more trust and burned bridges than anyone thought possible. So I think good things like ahead for UA. However, it still remains to be seen whether we'll have to go through bankruptcy to turn the corner.
In hindsight, you can clearly say that had US' unions worked harder with senior management, bankruptcy could have been avoided. But when you consider the poor leadership, people skills, broken promises and threats of Wolf and Gangwal, it's no surprise there was a hesitation to trust them and work with them. I think if Siegel had come to US 6 months or a year before he actually did, your situation would be much different. But the situation is what it is. US had no choice but to file for Ch.11. And UA may eventually be faced with the same choice.
wings396
Veteran
- Aug 20, 2002
- 3,672
- 1,122
Let's not forget that UA had deeper pockets before this all started..even with the concessions that are not of the woods yet and may still have to file. Even with their givebacks, they probobly will still make what we did before taking our cuts. Burning thru 7 million a day will need more than some givebacks to help.
[SPAN class=BodyFont]I find it intriguing that Dave must do at U what Wolf/Gangwhal wanted to do. I'd say W&G lined up the shot, and Dave pulled the trigger. Obviously, he has no choice at this point, but why did W&G let it get this far? UA is going for concessions PRIOR to reserves becoming untenable - by the time W&G stepped behind the curtain, Dave had no cash reserves to see U thru bankruptcy. The upshot is, management at the majors is drooling at the chance to cudgel labor, and if anyone thinks it's all a coincidence, see me about a bridge in Brooklyn.[/SPAN]
N513AU,
I suppose the better alternative would have been to just waltz into Ch.7 and liquidate/fragment the airline and kiss everybody's career goodbye for good? What choice did he have? And I'd hardly call what he did breaking labor. If US had been unable to achieve new labor agreements and petitioned the bankruptcy judge to toss out the labor contracts and was successful, that would have been closer to breaking labor. While the cost cutting and everything associated with it has been ugly, and will probably continue to be ugly, what other alternative was there short of shutting down the company for good, liquidating all assets and putting everyone on the unemployment line?
I suppose the better alternative would have been to just waltz into Ch.7 and liquidate/fragment the airline and kiss everybody's career goodbye for good? What choice did he have? And I'd hardly call what he did breaking labor. If US had been unable to achieve new labor agreements and petitioned the bankruptcy judge to toss out the labor contracts and was successful, that would have been closer to breaking labor. While the cost cutting and everything associated with it has been ugly, and will probably continue to be ugly, what other alternative was there short of shutting down the company for good, liquidating all assets and putting everyone on the unemployment line?
As previously stated , USAirways had NO choice in the actions they took.
Dave was forced to take this route thanks to the mess he was handed from W&G. U's failure to have a Plan B after the merger failed , was a kiss of death..9-11-01 only helped expedite the downward spiral.
This is a clear cut case of If you fail to plan...Plan to fail
I can assure you that things are only going to get worse for the employee's , before we see any signs of things getting better.
USAirways and the industry as we have come to know it , will likely never be the same , well at least not in terms of the near future anyway.
Folks, You need to clearly understand the fact that Dave signed on to a Failed Business Plan...and judgement day in terms of correcting it as come with a vengance. Be aware of where your anger should be directed, it's not with Dave...It's with the failures of all the past leadership groups going back to Pre-Merger days. Had things been directed and lead toward strength and intelligence? We would be in a position like WN and FL to prosper from other carriers failures. B6 just happened to come along at the right time...with the right plan.
If my conclusions are wrong? , which they aren't!! We would have never been in a needed position to merge with UA in a pre Sept 11th world. U'sleadership failed to make a sound business plan...and the issues of an Ad Hoc fleet...and silly work rules only compounded the problems. The Unions are not without thier guilt either...Greed and a lack of planning has hurt us all.
The only questions remaining are...Will the hurt continue?...or will sacrifice eventually bring an end to the death spiral? Politics and the economy still have a chance to wrench things further...So you better have an Indivdual Plan B just in case.
Dave was forced to take this route thanks to the mess he was handed from W&G. U's failure to have a Plan B after the merger failed , was a kiss of death..9-11-01 only helped expedite the downward spiral.
This is a clear cut case of If you fail to plan...Plan to fail
I can assure you that things are only going to get worse for the employee's , before we see any signs of things getting better.
USAirways and the industry as we have come to know it , will likely never be the same , well at least not in terms of the near future anyway.
Folks, You need to clearly understand the fact that Dave signed on to a Failed Business Plan...and judgement day in terms of correcting it as come with a vengance. Be aware of where your anger should be directed, it's not with Dave...It's with the failures of all the past leadership groups going back to Pre-Merger days. Had things been directed and lead toward strength and intelligence? We would be in a position like WN and FL to prosper from other carriers failures. B6 just happened to come along at the right time...with the right plan.
If my conclusions are wrong? , which they aren't!! We would have never been in a needed position to merge with UA in a pre Sept 11th world. U'sleadership failed to make a sound business plan...and the issues of an Ad Hoc fleet...and silly work rules only compounded the problems. The Unions are not without thier guilt either...Greed and a lack of planning has hurt us all.
The only questions remaining are...Will the hurt continue?...or will sacrifice eventually bring an end to the death spiral? Politics and the economy still have a chance to wrench things further...So you better have an Indivdual Plan B just in case.
Similar threads
