Hearing on US Airways' aircraft leases today
US Airways heads back to bankruptcy court in Alexandria this morning looking for some leeway on scheduled lease payments on its airplanes.
The airline wants to extend the time by which it must decide which, if any, aircraft leases to reject -- a power it has because it is under bankruptcy court protection. Ordinarily, that period would expire this week. The company has previously said it intends to maintain the size of its fleet at about 280 aircraft.
In a court filing last week, US Airways said it is "currently undergoing an extensive restructuring which may well include a rationalization of (its) fleet by rejecting or abandoning costly and/or surplus aircraft."
US Airways’ aircraft debt, EETC, and lease negotiations are being handled by John Lutz of the Seabury Group. Lutz was very successful at negotiating lower aircraft lease expenses during the company’s first trip through bankruptcy. Some of US Airways’ planes have below market value lease expenses and could be difficult to renegotiate, but the company needs to extract as many concessions as possible. I understand Lutz is playing hardball with financiers and it’s too early to tell what will be the post bankruptcy fleet plan will be, provided the company survives, but here are some key points. The current February schedule includes:
281 mainline aircraft.
Increased aircraft utilization equal to 27 aircraft.
Increased aircraft utilization with average block times per day increasing 55 minutes for B737s and 95 minutes for non-B737 aircraft.
US Airways will begin its quick turn program in February too, with the late flight target numbers being reduced by 5 minutes.
The new schedule will implement PHL rolling hub operations, adding two CLT banks to increase the number to 10 total, basically shifting PIT flying to the new FLL Caribbean/Latin American “focus cityâ€, and more point-to-point. New key markets are DCA to ATL, IAH, DFW, CLE, DTW, & ORD.
From a pilot staffing viewpoint, the February permanent bid could be out shortly after December 1 and will have the following drivers:
Age 60 retirements – There are 26 age 60 retirements for the remainder of 2004 and I believe 144 in 2005.
The increased aircraft utilization will result in about 270 additional pilot positions per the new “work rulesâ€.
Permanent Bid Closing Committee Chairman Bruce Beighlie told the MEC last summer the company was about 200 pilots understaffed, which in my opinion could be about 250 pilot under the old work rules.
It’s my understanding the company has been receiving 6 to 10 pilot notifications of colleagues inquiring about leaving the company. The attrition could be as high as 400 pilots before the end of the year, although the number is unclear because pilot’s seeking to retire early can pull their letter the day before their scheduled retirement. This number is uncertain, but could be significant.
For the first 10 months of 2004, the company ha saveraged about 20 pilots per month who went on LTD.
The October 28 ALPA code-a-phone reported the Retirement and Insurance Committee reports that management has agreed to allow pilots to retire on January 1, 2005 without being impacted by the post-retirement health insurance provisions of LOA 93. This means that pilots who retire by December 31, 2004, can still retire under the pre-October 15 post-retirement health insurance provisions, which are outlined in LOA 84.
On November 4, BOS F/O Rep Garalnd Jones wrote, "Just got a message from the NC that the company has told them that they do not plan to go after the retired pilot's medical benefits for those who are already retired and are under 65, including any pilot who retires before Jan.1, 2005. In other words, the company has no plan to use the 1114 process (same as the 1113, but pertains to retiree's benefits) while in bankruptcy to change the current benefits that our under 65 retired pilots are now receiving. Additionally, as the changeover to the LOA # 93 provisions start post Jan. 1, 2005, all pilots who retire before that date will thus be eligible for full retiree medical benefits as well," Jones said.
The October 29 code-a-phone reported ALPA and the Company met to discuss current and projected staffing needs given the new provisions of LOA 93 and the forecast flying for the February 2005 schedule. Based on the current projections for fleet size and block hours for February, the furloughs anticipated with the increased productivity provisions of LOA 93 may be minimal, if not at all. The Company and ALPA will continue to evaluate the staffing requirements, and we will provide you with those calculations as soon as they are available. These calculations and projections will be a major driver in the next permanent bid.
Regards,
USA320Pilot
US Airways heads back to bankruptcy court in Alexandria this morning looking for some leeway on scheduled lease payments on its airplanes.
The airline wants to extend the time by which it must decide which, if any, aircraft leases to reject -- a power it has because it is under bankruptcy court protection. Ordinarily, that period would expire this week. The company has previously said it intends to maintain the size of its fleet at about 280 aircraft.
In a court filing last week, US Airways said it is "currently undergoing an extensive restructuring which may well include a rationalization of (its) fleet by rejecting or abandoning costly and/or surplus aircraft."
US Airways’ aircraft debt, EETC, and lease negotiations are being handled by John Lutz of the Seabury Group. Lutz was very successful at negotiating lower aircraft lease expenses during the company’s first trip through bankruptcy. Some of US Airways’ planes have below market value lease expenses and could be difficult to renegotiate, but the company needs to extract as many concessions as possible. I understand Lutz is playing hardball with financiers and it’s too early to tell what will be the post bankruptcy fleet plan will be, provided the company survives, but here are some key points. The current February schedule includes:
281 mainline aircraft.
Increased aircraft utilization equal to 27 aircraft.
Increased aircraft utilization with average block times per day increasing 55 minutes for B737s and 95 minutes for non-B737 aircraft.
US Airways will begin its quick turn program in February too, with the late flight target numbers being reduced by 5 minutes.
The new schedule will implement PHL rolling hub operations, adding two CLT banks to increase the number to 10 total, basically shifting PIT flying to the new FLL Caribbean/Latin American “focus cityâ€, and more point-to-point. New key markets are DCA to ATL, IAH, DFW, CLE, DTW, & ORD.
From a pilot staffing viewpoint, the February permanent bid could be out shortly after December 1 and will have the following drivers:
Age 60 retirements – There are 26 age 60 retirements for the remainder of 2004 and I believe 144 in 2005.
The increased aircraft utilization will result in about 270 additional pilot positions per the new “work rulesâ€.
Permanent Bid Closing Committee Chairman Bruce Beighlie told the MEC last summer the company was about 200 pilots understaffed, which in my opinion could be about 250 pilot under the old work rules.
It’s my understanding the company has been receiving 6 to 10 pilot notifications of colleagues inquiring about leaving the company. The attrition could be as high as 400 pilots before the end of the year, although the number is unclear because pilot’s seeking to retire early can pull their letter the day before their scheduled retirement. This number is uncertain, but could be significant.
For the first 10 months of 2004, the company ha saveraged about 20 pilots per month who went on LTD.
The October 28 ALPA code-a-phone reported the Retirement and Insurance Committee reports that management has agreed to allow pilots to retire on January 1, 2005 without being impacted by the post-retirement health insurance provisions of LOA 93. This means that pilots who retire by December 31, 2004, can still retire under the pre-October 15 post-retirement health insurance provisions, which are outlined in LOA 84.
On November 4, BOS F/O Rep Garalnd Jones wrote, "Just got a message from the NC that the company has told them that they do not plan to go after the retired pilot's medical benefits for those who are already retired and are under 65, including any pilot who retires before Jan.1, 2005. In other words, the company has no plan to use the 1114 process (same as the 1113, but pertains to retiree's benefits) while in bankruptcy to change the current benefits that our under 65 retired pilots are now receiving. Additionally, as the changeover to the LOA # 93 provisions start post Jan. 1, 2005, all pilots who retire before that date will thus be eligible for full retiree medical benefits as well," Jones said.
The October 29 code-a-phone reported ALPA and the Company met to discuss current and projected staffing needs given the new provisions of LOA 93 and the forecast flying for the February 2005 schedule. Based on the current projections for fleet size and block hours for February, the furloughs anticipated with the increased productivity provisions of LOA 93 may be minimal, if not at all. The Company and ALPA will continue to evaluate the staffing requirements, and we will provide you with those calculations as soon as they are available. These calculations and projections will be a major driver in the next permanent bid.
Regards,
USA320Pilot
