January 17 Airline News - Morning Edition



[SPAN][STRONG][FONT face=Times New Roman size=3]Airplane lease bonds face bumpy ride in 2003 Fitch[/FONT][/STRONG]
[FONT face=Times New Roman size=3]NEW YORK (Reuters) - Bonds secured by airplane leases will face another turbulent year, as the cross-currents of the tough economic times that pushed UAL Corp.'s United Airlines into bankruptcy continue, analysts at bond rating service Fitch Ratings said on Thursday.[/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]Complete Story:[/FONT][STRONG] [/STRONG][A href=http://biz.yahoo.com/rf/030116/airlines_bonds_1.html][SPAN][STRONG]http://biz.yahoo.com/rf/030116/airlines_bonds_1.html[/STRONG][/SPAN][/A][STRONG] [/STRONG][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]U.S. wrestles with three-way codeshare proposal[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]WASHINGTON (Reuters) - The Bush administration is wrestling with terms of the most ambitious U.S. airline marketing alliance ever proposed, a plan that would involve three carriers with major operations throughout the eastern half of the United States.[/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]Complete Story:[/FONT][STRONG] [/STRONG][A href=http://biz.yahoo.com/rc/030116/airlines_codeshare_1.html][SPAN][STRONG]http://biz.yahoo.com/rc/030116/airlines_codeshare_1.html[/STRONG][/SPAN][/A][STRONG] [/STRONG][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]American Asks Staff to (take cuts) Keep It Flying[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]DALLAS (Reuters) - American Airlines, a division of AMR Corp., asked its employees on Thursday to come to the aid of the carrier, saying they have no time to waste if they want to keep the financially strapped airline in business.[/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]Complete Story:[/FONT][STRONG] [/STRONG][A href=http://biz.yahoo.com/rb/030116/airlines_american_2.html][SPAN][STRONG]http://biz.yahoo.com/rb/030116/airlines_american_2.html[/STRONG][/SPAN][/A][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]UAL Corp. to Report Fourth Quarter and Full-Year Financial Results[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]CHICAGO (PRNewswire-FirstCall) - UAL Corporation, the holding company whose primary subsidiary is United Airlines, announced today that it will release its fourth-quarter and full-year financial results before the market opens on Friday, January 31. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]The company will not hold conference calls for analysts and members of the press, however, representatives from United's investor relations and media relations staff will be available to respond to questions.[/FONT][/SPAN][SPAN]
[/SPAN][FONT face=Times New Roman][FONT size=3][SPAN]Complete Story:[STRONG] [/STRONG][A href=http://biz.yahoo.com/prnews/030116/cgth066_1.html][SPAN][STRONG]http://biz.yahoo.com/prnews/030116/cgth066_1.html[/STRONG][/SPAN][/A][STRONG] [/STRONG][/SPAN][/FONT][/FONT][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Judge approves GE Cap money for US Airways[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]ALEXANDRRIA (TheDeal.com) - A federal bankruptcy court judge has approved GE Capital's plan to take a 5% stake in bankrupt US Airways Group Inc. in exchange for financing worth more than $800 million. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]Judge Stephen Mitchell approved the plan, struck in December after negotiations between the airline and its largest creditor, at a hearing Jan. 16 in Alexandria, Va. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]Terms call for GE Capital, a unit of Fairfield, Conn.-based General Electric Co., to provide $120 million to help US Air run its business while under bankruptcy protection. The Arlington, Va.-based carrier also would receive $360 million in additional capital from GE Capital once it emerges from Chapter 11, as well as $350 million in equity credits it will use to lease regional jets. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]The financing supplements the $500 million debtor-in-possession and post-reorganization funding commitments US Air has received from the Retirement Systems of Alabama, a pension fund, which is due to receive a 36.6% stake in the reorganized airline. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]GE Capital is owed more than $1 billion for everything from plane leases to engine repairs, according to court documents. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]US Airways also asked Judge Mitchell on Jan. 16 to accept its reorganization plan. If approved, the plan would be forwarded to the carrier's creditors for a vote, keeping the airline on target to emerge from bankruptcy protection by late March. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]The airline's most significant remaining obstacle is its underfunded pension plan, which some estimate at more than $3 billion below target. US Airways must redress this liability to win final approval for a $900 million federal loan guarantee it hopes to receive upon exiting bankruptcy. [/FONT][/SPAN][SPAN]
[FONT face=Times New Roman size=3]US Airways' reorganization plan assumes it will secure the loan guarantee, meaning any uncertainty about the plans could be enough for creditors to scuttle it. The airline has asked the government to allow it to spread its pension payments over 30 years, but legislation introduced in the Senate granting that extension is expected to face opposition.[/FONT][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Judge sorts through US Airways reorganization plan [/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]ALEXANDRIA (AP) - Objections to US Airways' reorganization plan came from all levels Thursday, from a Weirton, W.Va, mechanic who had his retirement fund wiped out to a group of 12 former executives, including former CEO Seth Schofield, who had their supplemental pension plan terminated.[/FONT][/SPAN][SPAN]
[/SPAN][FONT face=Times New Roman][FONT size=3][SPAN]Complete Story:[STRONG] [/STRONG][A href=http://www.fredericksburg.com/News/apmethods/apstory?urlfeed=D7OJL6B00.xml][SPAN][STRONG]http://www.fredericksburg.com/News/apmethods/apstory?urlfeed=D7OJL6B00.xml[/STRONG][/SPAN][/A][/SPAN][/FONT][/FONT][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]US Airways tells pilots: Your pensions are secure[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]ALEXANDRIA (Reuters) - US Airways sought to reassure pilots on Thursday about their pensions as the company considers terminating their retirement plan to meet conditions of its bankruptcy reorganization.[/FONT][/SPAN][SPAN]
[/SPAN][FONT face=Times New Roman][FONT size=3][SPAN]Complete Story:[STRONG] [/STRONG][A href=http://biz.yahoo.com/rm/030116/airlines_usairways_hearing_3.html][SPAN][STRONG]http://biz.yahoo.com/rm/030116/airlines_usairways_hearing_3.html[/STRONG][/SPAN][/A][STRONG] [/STRONG][/SPAN][/FONT][/FONT][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]US Airways CEO: pilot pension payments must be cut or restructured - Airline will terminate pension plan unless Congress acts [/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]PITTSBURGH (Post-Gazette) - US Airways Chief Executive Officer David Siegel said yesterday the bankrupt company will seek to terminate its pilots' pension plan unless Congress quickly approves legislation allowing the airline to stretch out payments to the plan over 30 years.[/FONT][/SPAN][SPAN]
[/SPAN][FONT face=Times New Roman][FONT size=3][SPAN]Complete Story:[STRONG] [/STRONG][A href=http://www.post-gazette.com/businessnews/20030117usairbizp1.asp][SPAN][STRONG]http://www.post-gazette.com/businessnews/20030117usairbizp1.asp[/STRONG][/SPAN][/A][STRONG] [/STRONG][/SPAN][/FONT][/FONT][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Pilots' pension may be changed[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]PITTSBURGH (Tribune-Review) - US Airways Chief Executive David Siegel warned pilots in a memo Thursday that the airline might have to terminate their pension plan and replace it with another retirement plan in order to complete the carrier's reorganization and emerge from bankruptcy. [/FONT][/SPAN][SPAN]
[/SPAN][FONT face=Times New Roman][FONT size=3][SPAN]Complete Story:[STRONG] [/STRONG][A href=http://www.pittsburghlive.com/x/tribune-review/business/s_113249.html][SPAN][STRONG]http://www.pittsburghlive.com/x/tribune-review/business/s_113249.html[/STRONG][/SPAN][/A][/SPAN][/FONT][/FONT][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]US Airways Tidbits[/FONT][/SPAN][/STRONG][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Orlando operations shrinking[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]US Airways has reached an agreement with the Greater Orlando Airport Authority to return 10 gates. The airline would like to also like to return gates 52 and 59 and operate from gates 50, 52, 56, and 58 for only 4 gates. At its highest point the airline operated 52 flights per day with 10 to 20 weekend charter flights; however, the new schedule will have 23 mainline and 3 commuter flights per day.[/FONT][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Fleet Plan[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]Reports indicate today in bankruptcy court the judge approved the US Airways - GECAS global settlement that requires the airline to return nine parked B737s to service. To keep the airline at 279 aircraft, management will remove one B767, one B757, and nine narrowbody Airbus aircraft from service, which will be implemented on pilot bid 03-03, effective in April, which will be published later this month. In addition, Maintenance sources say the airline has fourteen narrowbody Airbus aircraft that require maintenance checks by October and no decision has been made on whether or not this scheduled service will be performed.[/FONT][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]US Airways RJ Update[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]In today's Omnibus Hearing the court approved a new agreement that US Airways struck with Chautauqua Airlines and Republic Airways, to expand regional jet service by up to 58 aircraft. The court also approved the plan where GECAS will provide US Airways $350 million in equity for start up leases on regional jets that US Airways wants to add. GECAS holds delivery positions on 50 EMB-170s with 78 options, where Embraer deliveries to Swiss International will begin in the fourth quarter 2003. [/FONT][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Super Bowl Sunday[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]In order to accommodate Super Bowl traffic to and from San Diego, US Airways Fleet Scheduling will substitute A321 aircraft for normally scheduled A319 aircraft from Thursday, Jan. 23, through Monday, Jan. 27. This change allows US Airways to meet high customer demand while increasing revenue by adding 245 seats per day. No additional costs will be incurred, since the Airbus narrow-body fleet is common typed, and the adjustment will not require crew substitution.[/FONT][/SPAN][SPAN]
[/SPAN][STRONG][SPAN][FONT face=Times New Roman size=3]Memorandum[/FONT][/SPAN][/STRONG][SPAN]
[FONT face=Times New Roman size=3]To: All US Airways Pilots[/FONT][/SPAN][SPAN]
[FONT face=Times New Roman][FONT size=3][SPAN]From: Dave Siegel[/SPAN]
[SPAN]Date: January 16, 2003[/SPAN]
[SPAN]I want to update you on the pension issue as I know how important this is to you and your families.[/SPAN]
[SPAN]The U.S. Bankruptcy Court in Alexandria, VA is conducting a hearing today on the Companys disclosure statement and plan of reorganization. (The hearing may extend into Friday, depending on the handling of a lengthy agenda.) During these proceedings, the Companys amended disclosure statement will address the subject of the pilot pension plan. As required to complete our successful reorganization, we will lay out a dual path: we are actively pursuing legislative relief that would implement a restoration funding plan, or if unsuccessful in that effort, we will be forced to file a distress termination of the existing plan.[/SPAN]
[SPAN]Should a termination occur, I urge you to carefully remember the following key points, which are part of our revised restructuring agreement reached with ALPA in December:[/SPAN][/FONT][/FONT][/SPAN]
[SPAN][FONT face=Times New Roman color=#000000 size=3][/FONT][/SPAN]
[UL type=disc]
[LI][FONT color=#000000][FONT face=Times New Roman][FONT size=3][SPAN]Terminating the existing pilot pension plan will not mean that you will be left without a pension benefit. By working with ALPA, the existing plan will be replaced with a new plan so that upon retirement, pilots would receive benefits from two plans that when combined will represent your retirement income. [/SPAN][SPAN][/SPAN][/FONT][/FONT][/FONT]
[LI][FONT color=#000000][FONT face=Times New Roman][FONT size=3][SPAN]Any follow-on pension plan will have the same funding levels by the Company that would have been made if a restoration funding program was allowed. There will be no financial windfall for the Company under this plan. [/SPAN][SPAN][/SPAN][/FONT][/FONT][/FONT][/LI][/UL]
[FONT face=Times New Roman color=#000000 size=3]The replacement plan will be crafted to recognize the sacrifices already made by our pilots as well as the demographics of our pilot workforce, which we know is senior and made up of many pilots that are age 45 and above and clearly focused on retirement.[/FONT][/SPAN][SPAN]
[FONT color=#000000][FONT face=Times New Roman][FONT size=3][SPAN]The Company is continuing to devote the very best financial, legal and political resources to this matter. One way or another we must resolve this issue prior to the plan of reorganization being mailed out for a vote by our creditors in late January. In order to draw the final $200 million of our debtor-in-possession financing, we must also secure ATSB approval of our revised business plan, which must include a solution to the pension issue. The ATSB will not act until this matter is resolved.[/SPAN]
[SPAN]I know this is a deeply personal issue for you. Our preferred path is to achieve a legislative solution. However, no matter what the outcome, we will have viable options that provide for your retirement income. You will have a pension and no one should believe otherwise. Likewise, do not assume your final pension benefit will be reduced to the PBGC maximum of approximately $28,000 per year because with a replacement pension plan, that will not occur. The only way your pension benefit would be reduced to the PBGC level is if the Company was to liquidate -- and I have no intention of letting that happen.[/SPAN][/FONT][/FONT][/FONT][/SPAN]