Earlier this week US Airways president and chief executive officer Bruce Lakefield told employees in recorded message US Airways faces "significant losses" for the rest of the year and would file for Chapter 11 bankruptcy reorganization if employees did not ratify $800 million in wage and benefits concessions before September 30.
"Please stop dragging your feet or hoping that Chapter 11 will help you. It most certainly will not. ... If US Airways fails to have new labor contracts in place well before Sept. 30, it faces a series of consequences ... which could have a destabilizing impact on the company and a negative impact on employees," he said.
It is my understanding that John Luth of the Seabury Group investment boutique and FTI Consulting are currently working on bankruptcy financial issues and the law firm of Arnold and Porter are working on bankruptcy legal issues, including preparing S.1113/S.1114 motions, if necessary.
Moreover, the financiers have provided the company with RJ financing through September 30 and the company must meet certain financial benchmarks to not fall into loan guarantee default, such as cash flow, unrestricted cash balances, and EBITDAR. “Rather than risk those consequences,†Lakefield said, which could destabilize the airline’s finances and hurt employees, the company may have to make another trip to bankruptcy court, Aviation Daily reported.
And if we miss those ATSB covenants, and, even more significantly, miss them without a plan of how to remedy that miss and return to satisfying those covenants in the future, then the ATSB and our creditors have the ability to call their loans.
I believe you will see new labor accords with ALPA, the AFA, and the three TWU units. However, I am less certain about the CWA and IAM units, but in the end I believe the CWA will cut a deal. Nonetheless, as I understand it, the company has the liquidity to reorganize and will place any union directly in the "cross hairs" who does not have a new labor agreement by September 30. Moreover, in bankruptcy court isome observers believe the airline could seek to set aside current union contract and maybe reject key facility lease agreements, such as Winston-Salem Rez or the Charlotte Maintenance facilitie(s) and outsource all reservations sales and heavy maintenance funcitons.
Do I like this? No, of course not, but it's the reality of what we face.
Respectfully,
USA320Pilot
"Please stop dragging your feet or hoping that Chapter 11 will help you. It most certainly will not. ... If US Airways fails to have new labor contracts in place well before Sept. 30, it faces a series of consequences ... which could have a destabilizing impact on the company and a negative impact on employees," he said.
It is my understanding that John Luth of the Seabury Group investment boutique and FTI Consulting are currently working on bankruptcy financial issues and the law firm of Arnold and Porter are working on bankruptcy legal issues, including preparing S.1113/S.1114 motions, if necessary.
Moreover, the financiers have provided the company with RJ financing through September 30 and the company must meet certain financial benchmarks to not fall into loan guarantee default, such as cash flow, unrestricted cash balances, and EBITDAR. “Rather than risk those consequences,†Lakefield said, which could destabilize the airline’s finances and hurt employees, the company may have to make another trip to bankruptcy court, Aviation Daily reported.
And if we miss those ATSB covenants, and, even more significantly, miss them without a plan of how to remedy that miss and return to satisfying those covenants in the future, then the ATSB and our creditors have the ability to call their loans.
I believe you will see new labor accords with ALPA, the AFA, and the three TWU units. However, I am less certain about the CWA and IAM units, but in the end I believe the CWA will cut a deal. Nonetheless, as I understand it, the company has the liquidity to reorganize and will place any union directly in the "cross hairs" who does not have a new labor agreement by September 30. Moreover, in bankruptcy court isome observers believe the airline could seek to set aside current union contract and maybe reject key facility lease agreements, such as Winston-Salem Rez or the Charlotte Maintenance facilitie(s) and outsource all reservations sales and heavy maintenance funcitons.
Do I like this? No, of course not, but it's the reality of what we face.
Respectfully,
USA320Pilot
