Fitch To Host Teleconference on the US Airline Pension Gap, Jan. 14
NEW YORK (Business Wire) - Tomorrow, Jan. 14 at 11:30 a.m. EST, Fitch will host a teleconference to discuss the U.S. airline pension gap. Fitch analysts William Warlick, Chris Struve and Mark Oline will host the call.
U.S. participants should dial 1-877-897-0442 and international participants should dial 1-706-643-7396. All participants should dial five minutes prior to the 11:30 a.m. EST start time and give the title of the call - 'Fitch'. The call leader is Mark Oline. Interested parties who are not available fort he teleconference will be able to hear a replay of the call starting Jan. 14 at 2:30 p.m. until Jan. 16. Domestic participants should dial 1-800-642-1687 and international participants should dial 1-706-645-9291 and use the access code 7579980.
Chip comments: Fitch Rating is also the independent auditor hired by the ATSB to evaluate federal loan guarantee applications. The Fitch contract required the credit rating agency to provide the board with a recommendation of whether or not the applicants business plan would provide a 7 percent profit margin and in the credit ratings opinion could the airline could repay the loan within 7 years.
Airline Pension Gap to Exceed $18BN; Heightening Industry Liquidity Concerns
NEW YORK (Business Wire) - The US airline industry is likely to assume a new and prominent place as the industry is at risk for financial fallout resulting from the growing magnitude of its pension funding problem. In a new report to be released this morning, Fitch Ratings estimates that the aggregate level of pension plan underfunding in the industry will exceed $18 billion as of Dec. 31, 2002.
Complete Story: http://money.excite.com/jsp/nw/nwdt_ge.jsp...t&date=20030113
Chip comments: Underfunded defined benefit plans only effect the major US network carriers becuase the low-cost carriers, such as Southwest, AirTran, ATA, JetBlue and Frontier, do notpossess the employee benefit, which according to Ftich represents yet another source of competitive advantage for these airlines in relation to their high-cost network carrier rivals. Interestingly, Fitch estimates Delta has the largest underfunded pension obligation at $4.4 billion followed by United with a $4.1 billion obligation. American, Northwest and US Airways each have a gap of $3.0 billion or more.
Year-To-Date Airline Traffic Down 1.5%; Load Factor Up 1.9 Pts
NEW YORK (Bloomberg) - 2002 year-to-date passenger traffic for 18 U.S. airlines fell 1.5 percent to 620.29 billion revenue passenger miles from 629.54 billion a year earlier. A revenue passenger mile equals one paying passenger carried one mile. Year-to-date figures are through December 31 and are compiled using company releases.
Complete Story: http://quote.bloomberg.com/fgcgi.cgi?T=mar...iLNXBPOWWVhci1U
United Airlines' ESOP trustee can sell some shares, next hearing Wednesday
CHICAGO (Reuters) - UAL Corp. parent of bankrupt United Airlines, said on Monday it would allow the independent trustee of its employee stock ownership plan to sell up to 12.86 million more UAL shares, following a bankruptcy judge's order.
Complete Story: http://biz.yahoo.com/rf/030113/airlines_un...ted_es0p_1.html
UAL Seeks to Stop Desired Deposition of Financial Chief
CHICAGO - UAL Corp., parent of United Airlines, has asked the judge overseeing its bankruptcy case for a court order to prevent State Street Bank & Trust Co. from taking a deposition of the airline's chief financial officer.
Complete Story: http://biz.yahoo.com/djus/030113/1148000397_1.html
Chip comments: The battle between State Street Bank & Trust and UAL is significant because the courts decision could led to a change of corporate control and prevent the Elk Grove Township airline from realizing an enormous tax credit. This decision could eliminate the ESOP and/or led to the liquidation of the company because it could cause UAL to not meet its DIP financing requirements.
United takes aim at pilots' perks
CHICAGO (Crain's Business News) - United Airlines is targeting elimination of a supplementary retirement plan for pilots and other crown jewels of their union contract as talks continue on long-term labor savings. Interim wage reductions are in place with all of its labor groups, including a 29% pay cut for pilots, but the hard bargaining is still ahead.
Complete Story: http://www.chicagobusiness.com/cgi-bin/news.pl?id=7614
US Airways Dispatchers Vote Yes on Cost Reductions Saturday
ARLINGTON (PRNewswire-FirstCall) - Dispatchers at US Airways, represented by the Transport Workers Union (TWU), today ratified a cost-savings agreement in support of the company's restructuring plan. The dispatchers join US Airways' other two TWU groups -- simulator engineers and flight crew training instructors -- in ratifying restructuring agreements.
Complete Story: http://biz.yahoo.com/prnews/030111/nysa010_1.html
US Airways Announces New and Expanded Bermuda Service
ARLINGTON (PRNewswire-FirstCall) - US Airways will introduce daily nonstop roundtrip service between Boston and Bermuda this spring, as well as expand service from existing U.S. gateways in New York, Washington D.C. and Charlotte, N.C.
Complete Story: http://biz.yahoo.com/prnews/030113/dcm037_1.html
Senate resists on US Airways measure - Legislation would let airline spread out pension plan payments
WASHINGTON (Charlotte Observer) - In a blow to efforts to bring US Airways out of bankruptcy court quickly, the Senate refused to wave through legislation to amend pension laws and let the airline spread out payments to its employee obligation fund over 30 years.
Complete Story: http://www.charlotte.com/mld/observer/busi...ess/4922739.htm
US Airways Tidbits
Chautauqua Airline RJ/J4J Update
We have reached a tentative agreement with US Airways on the affirmation of our current contract covering 26 regional jets and the possible addition of up to 9 regional jets with Chautauqua. This agreement is contingent on a large number of conditions precedent, not the least of which is they [Airways] successfully emerge from bankruptcy. We hope that Airways will present the amendment to the bankruptcy court for approval early next week. We will not know if the agreement will be approved until January 20th at the earliest. Our Holding Company has also reached a tentative agreement with US Airways to operate up to another 23 regional jets; also assuming numerous conditions are met, including approval by the ALPA association at US Airways. Since Chautauqua cannot comply with the Jets for Jobs requirements, additional furloughed pilots from Airways would be covered under the other regional jet service agreement between the Holding Company and US Airways.
This is an important first step in renewing our business relationship with Airways, but there is still a long road to travel. While I am glad that some very difficult and often heated negotiations have been concluded to both parties satisfaction, we still must wait and hope that they are successful in their reorganization efforts. I will keep you advised of any new developments in this process.
NEW YORK (Business Wire) - Tomorrow, Jan. 14 at 11:30 a.m. EST, Fitch will host a teleconference to discuss the U.S. airline pension gap. Fitch analysts William Warlick, Chris Struve and Mark Oline will host the call.
U.S. participants should dial 1-877-897-0442 and international participants should dial 1-706-643-7396. All participants should dial five minutes prior to the 11:30 a.m. EST start time and give the title of the call - 'Fitch'. The call leader is Mark Oline. Interested parties who are not available fort he teleconference will be able to hear a replay of the call starting Jan. 14 at 2:30 p.m. until Jan. 16. Domestic participants should dial 1-800-642-1687 and international participants should dial 1-706-645-9291 and use the access code 7579980.
Chip comments: Fitch Rating is also the independent auditor hired by the ATSB to evaluate federal loan guarantee applications. The Fitch contract required the credit rating agency to provide the board with a recommendation of whether or not the applicants business plan would provide a 7 percent profit margin and in the credit ratings opinion could the airline could repay the loan within 7 years.
Airline Pension Gap to Exceed $18BN; Heightening Industry Liquidity Concerns
NEW YORK (Business Wire) - The US airline industry is likely to assume a new and prominent place as the industry is at risk for financial fallout resulting from the growing magnitude of its pension funding problem. In a new report to be released this morning, Fitch Ratings estimates that the aggregate level of pension plan underfunding in the industry will exceed $18 billion as of Dec. 31, 2002.
Complete Story: http://money.excite.com/jsp/nw/nwdt_ge.jsp...t&date=20030113
Chip comments: Underfunded defined benefit plans only effect the major US network carriers becuase the low-cost carriers, such as Southwest, AirTran, ATA, JetBlue and Frontier, do notpossess the employee benefit, which according to Ftich represents yet another source of competitive advantage for these airlines in relation to their high-cost network carrier rivals. Interestingly, Fitch estimates Delta has the largest underfunded pension obligation at $4.4 billion followed by United with a $4.1 billion obligation. American, Northwest and US Airways each have a gap of $3.0 billion or more.
Year-To-Date Airline Traffic Down 1.5%; Load Factor Up 1.9 Pts
NEW YORK (Bloomberg) - 2002 year-to-date passenger traffic for 18 U.S. airlines fell 1.5 percent to 620.29 billion revenue passenger miles from 629.54 billion a year earlier. A revenue passenger mile equals one paying passenger carried one mile. Year-to-date figures are through December 31 and are compiled using company releases.
Complete Story: http://quote.bloomberg.com/fgcgi.cgi?T=mar...iLNXBPOWWVhci1U
United Airlines' ESOP trustee can sell some shares, next hearing Wednesday
CHICAGO (Reuters) - UAL Corp. parent of bankrupt United Airlines, said on Monday it would allow the independent trustee of its employee stock ownership plan to sell up to 12.86 million more UAL shares, following a bankruptcy judge's order.
Complete Story: http://biz.yahoo.com/rf/030113/airlines_un...ted_es0p_1.html
UAL Seeks to Stop Desired Deposition of Financial Chief
CHICAGO - UAL Corp., parent of United Airlines, has asked the judge overseeing its bankruptcy case for a court order to prevent State Street Bank & Trust Co. from taking a deposition of the airline's chief financial officer.
Complete Story: http://biz.yahoo.com/djus/030113/1148000397_1.html
Chip comments: The battle between State Street Bank & Trust and UAL is significant because the courts decision could led to a change of corporate control and prevent the Elk Grove Township airline from realizing an enormous tax credit. This decision could eliminate the ESOP and/or led to the liquidation of the company because it could cause UAL to not meet its DIP financing requirements.
United takes aim at pilots' perks
CHICAGO (Crain's Business News) - United Airlines is targeting elimination of a supplementary retirement plan for pilots and other crown jewels of their union contract as talks continue on long-term labor savings. Interim wage reductions are in place with all of its labor groups, including a 29% pay cut for pilots, but the hard bargaining is still ahead.
Complete Story: http://www.chicagobusiness.com/cgi-bin/news.pl?id=7614
US Airways Dispatchers Vote Yes on Cost Reductions Saturday
ARLINGTON (PRNewswire-FirstCall) - Dispatchers at US Airways, represented by the Transport Workers Union (TWU), today ratified a cost-savings agreement in support of the company's restructuring plan. The dispatchers join US Airways' other two TWU groups -- simulator engineers and flight crew training instructors -- in ratifying restructuring agreements.
Complete Story: http://biz.yahoo.com/prnews/030111/nysa010_1.html
US Airways Announces New and Expanded Bermuda Service
ARLINGTON (PRNewswire-FirstCall) - US Airways will introduce daily nonstop roundtrip service between Boston and Bermuda this spring, as well as expand service from existing U.S. gateways in New York, Washington D.C. and Charlotte, N.C.
Complete Story: http://biz.yahoo.com/prnews/030113/dcm037_1.html
Senate resists on US Airways measure - Legislation would let airline spread out pension plan payments
WASHINGTON (Charlotte Observer) - In a blow to efforts to bring US Airways out of bankruptcy court quickly, the Senate refused to wave through legislation to amend pension laws and let the airline spread out payments to its employee obligation fund over 30 years.
Complete Story: http://www.charlotte.com/mld/observer/busi...ess/4922739.htm
US Airways Tidbits
Chautauqua Airline RJ/J4J Update
We have reached a tentative agreement with US Airways on the affirmation of our current contract covering 26 regional jets and the possible addition of up to 9 regional jets with Chautauqua. This agreement is contingent on a large number of conditions precedent, not the least of which is they [Airways] successfully emerge from bankruptcy. We hope that Airways will present the amendment to the bankruptcy court for approval early next week. We will not know if the agreement will be approved until January 20th at the earliest. Our Holding Company has also reached a tentative agreement with US Airways to operate up to another 23 regional jets; also assuming numerous conditions are met, including approval by the ALPA association at US Airways. Since Chautauqua cannot comply with the Jets for Jobs requirements, additional furloughed pilots from Airways would be covered under the other regional jet service agreement between the Holding Company and US Airways.
This is an important first step in renewing our business relationship with Airways, but there is still a long road to travel. While I am glad that some very difficult and often heated negotiations have been concluded to both parties satisfaction, we still must wait and hope that they are successful in their reorganization efforts. I will keep you advised of any new developments in this process.
