My unofficial take on the situation is that the Company cannot survive without the ASTB loan. The loan is needed so that U can reconfigure its self. So without the loan it cancels out U's business plan. Since the Company is bankrupt, meaning expenses/debt are greater than assets, and they cannot continue to operate with out the funds. The creditors will then demand payment from the court. What assets are left are then sold to pay the creditors off.
How long can they continue to operate without the money. Picture if you can that the Company is currently on life support right now, how long can it contine to breathe if it is taken off of the machine. It could be an overnight shut down or it could linger a couple of weeks if there is anyone willing to buy U as an enity. Like the TWA deal. Since the economy sucks and all the other airlines (except Southwest) really aren't in a positon to buy U, I suspect the assets will just be sold off. My best guess is if it all falls apart, I predict September 30th is the date that one can expect the lights to be turned off.
Midway shut down overnight and Consolidated Freightways just filed Chapter 11, but laid off all its employees. I dont' think U will hang on for much longer. The creditors want their money and although they are giving U some time right now to work things out...time is slowly running out. It becomes less important what management Dave thinks he can do, but what the creditors want. And the employees are no longer in the equation, as we had our shot. I believe that September 26 is the magic day for those on the outside to start offering money for our assets (and employees are usually not part of the deal).
The USAirways is currently running on life support. Unless it gets a transplant (Money), it will soon cease to exist. Simple and very painful for all.[img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/8.gif']
[BLOCKQUOTE][BR]----------------[BR]On 9/13/2002 4:11:00 AM Res wrote:
[P]Can the company survive the BK without ASTB cash flow?[BR]If both contracts are declined...and for how long...[/P]----------------[/BLOCKQUOTE]
[P]No, and not long. Creditors would immediately move to liquidate.[/P]
I agree with all of you. If the CWA or IAM-M do not agree to their restructuring agreements the end of US Airways (without a White Knight) is very, very near.
In today's industry-wide crisis, in my opinion nobody will buy the airline, but instead will offer to buy assets so they can recall their furloughed employees to enjoy the assets of our airline. It will be like we just handed them our jobs, instead of trying to compete in today's climate.
The bankruptcy court has scheduled a hearing on September 26 to either approve the TPG plan or seek other offers. But the TPG plan requires all unions provide a restructuring agreement; therefore, a no vote is a vote to liquidate the airline.
As UAL777flyer said, Eastern Airlines: The Sequel.
[BLOCKQUOTE][BR]----------------[BR]On 9/13/2002 10:22:06 AM 7.5victim wrote:
[P]On a related note, what really has value if the liquidation happened? [BR][BR]Shuttle, of course (AA)[BR][BR]PHL hub, mostly for the trans-atlantic routes (to NW)[BR][BR]CLT hub to a carrier without a southeast presence (again, NW?)[BR][BR]DCA and LGA ops would still be sold at a premium.[BR][BR]But....[BR][BR]Would anyone want PIT? (maybe WN? maybe?)[BR][BR]What about equipment? What's owned vs. leased? Would there be anyone in North America intersted in the Airbii?[/P]----------------[/BLOCKQUOTE]
[P]I'll bet that NW and/or jetBoy could do with a few extra A-320 family craft at cheap prices. NW might also take the 9 A-330s and accelerate the retirement of its DC-10s and old 747s.[/P]
Exactly. US would not have access to either ATSB cash flow or DIP financing. You would most likely see a swift move to liquidate US Airways assets, unless another investor entered the fray willing to provide financing without those necessary cost-reduction agreements in place. The company would most likely seek immediate abrogation of those contracts in an attempt to cut wages/benefits/work rules to lower costs to keep the operation going. The outcome would be unknown. It's a situation that US Airways would want to avoid at all costs because it could very well spell the end for your company.