Fliers Fed Up? Airline Employees Feel the Same

[700AW]

Thanks BB, that is what i have been trying to say. no HP, no merger, no money raised, besides Seabury was hired to get a dance partner, not to fund US. at 18 months prior to the announcement, does one think hp hiring a company to raise capital to "merge" US would'nt have set off a stock buying frenzy that would have killed the deal????

 

[BoeingBoy]

Don't be so sure that US would have survived. Cash was being burned at a prodigious rate - it only took 2 months to burn through the $125 million in DIP financing from Air Wisconsin. That fuel spike did occur - remember a little thing called Katrina - but was cushioned somewhat by hedges brought to the table by HP (to the tune of over $120 million in 4Q05 alone).

Without the money the merger brought in, I'm convinced that US (East) would not have seen 2006. There would have been either liquidation or fragmentation. It's hard to come to any other conclusion from the monthly operating reports filed with the BK court prior to exit and the quarterly report for 4Q05. Without the cash infusion made possible by the merger, US (East) was toast.

Jim

 

[Hello Newman]

From the article above: "Mr. Parker said the merger saved two troubled airlines from potential financial ruin..."
Who saved who?

BELIEVE ME HP SAVED US..........

 

[ringmaruf]

Don't be so sure that US would have survived. Cash was being burned at a prodigious rate - it only took 2 months to burn through the $125 million in DIP financing from Air Wisconsin.

But we would have had additional money through the $125 million DIP from Republic that was never drawn down on. (They only took the MDA & slots money from Republic.) And Mesa wanted to get in on the DIP action as well.

Of course, all that would have left US with more RJs than it knew what to do with, but I think it would have given them enough cash to make it to, well, right about now.


And that doesn't even take into account the backup plan of Luth to sell US to MatlinPatterson, the firm that ended up buying ATA, World, and North American.

 

[orioleman]

just a comment ,
the year prior to the so called blessed union of HP , US had the best O.T / PAWOBS / lowest Customer Complaints.. in more than 15 years,

You had a workforce that had survived 2 bk and not sure what the future held for us BUT still got the job done, that's because WE still had a superior product to offer.

it wasn't all about DoUgIes synergy . IT was about running an airline and giving the flying public a decent product for there ticket price. Since the merger all of that has

eroded for the all mighty buck. Well Mr.Parker you will soon find out that your leisure travelers that you cater to in the form of low fares / crappy service. won't be flying

because they may not have a job if a recession hits.. THE business traveler has ALWAYS keep US afloat in bad times, I'm afraid that You Mr.Parker have sent them packing for the last time

but hey, at least you can enjoy your golden parachute when you JUMP :down: :down: :down:

 

[BoeingBoy]

But we would have had additional money through the $125 million DIP from Republic that was never drawn down on.

Unlike Air Wisconsin's money, Republic's $125 million wasn't available as DIP financing - only as investment upon BK emergence. With the other investment money available based on the merger, US didn't exercise the investment agreement with Republic - probably because Republic (like Air Wisconsin) would have gotten a better deal than the later investors.

As for any so-called "backup plans" I'll merely quote Lakefield (emphasis mine):

By the end of the first quarter of 2005, it was becoming increasingly apparent that even with all of the cost reductions it had achieved through its first and second Chapter 11 proceedings, US Airways still did not have a viable plan to continue as a business on a stand-alone basis. No investor would come forward and provide the additional investment to fund a stand-alone plan, based on financial projections which did not demonstrate sustained viability.

At that time, the Company’s management gave much consideration to the question of whether or how a stand-alone plan could be achieved. The only possibility of a feasible stand-alone plan would have required a massive downsizing, pursuant to which more than one-half the employees would lose their jobs, and the fleet and scope of operations would be greatly reduced. Ultimately, we were not able to develop such a feasible downsizing model on a detailed basis, in part because we knew that we lacked the liquidity to transition from a larger airline to a smaller airline, as any such transition necessarily has revenue reductions occurring at a faster initial rate than cost reductions.

<Snip>

Conversely, if the transaction does not go forward, the Company’s lenders and
Plan Investors have indicated that they will no longer provide further support, and the
Company does not believe that it can obtain further use of cash collateral, for any substantial
period of time, because it will not be able to provide its lenders with the adequate protection to
which they are entitled under law.

Jim

 

[oldiebutgoody]

I don't think that anyone would argue that U didn't have it's MAJOR issues, but those that don't think that AWA didn't as well are fooling themselves. BOTH airlines would likely be out of business by now if not for the merger, but since the merger happened, no one can ever say for sure.