MidAtlantic Contract


Aug 21, 2002
Does anyone know if contracts have been initiated for MidAtlantic Airlines. I know there are a few people in RIDC on the payroll, but how is that coming? Will the unions have a totally separate contract under them or will they be tied to mainline and frozen for six years. Is there going to be room to negotiate or are they going to be the same threatening take it or leave it kind of contracts as mainline now has? It would be rather nice if managment gave the employees some hope for the future.



ALPA and AFA have negotiated pilot and F/A contracts for MidAtlantic (MDA), which are a "mirror" image of the AA Eagle contract(s). I believe the term sheets for all other union modified restructuring agreements contain MDA contract language. For example, in the IAM-M agreement, the term sheet states "the terms and conditions of employment will be cost competitive with other Regional Express Carriers." In regard to the CWA, their newly ratified agreement contains MDA lanaguage and can be viewed at www.cwa.net.

The US ALPA MEC has been given specific MDA start-up news, but that information is confidential to prevent the competition from obtaining strategic plans.

Reports from multiple sources indicate:

1. The new mainline division is expected to fly the EMB-170 and EMB-175 aircraft, per the ALPA restructuring agreement, and will be financed by GECAS.

2. US and GECAS reached an agreement in principal on December 27 that the company said could finance "a significant portion" of its capital needs after emerging from Chapter 11. According to Dow Jones, The relationship between US Airways and General Electric, parent company of GECAS, extends to aircraft financing, general debt financing, and aircraft and engine servicing. Under the settlement, GE Capital has agreed to provide the airline with $120 million in debtor-in-possession financing, a $360 million loan for use after it exits from Chapter 11, and $350 million of lease equity for the leveraged lease financing of regional jet aircraft.

3. GECAS holds delivery positions on 50 EMB-170s/175s delivery positions and 78 options that apparently have been given to US Airways. Embraer will deliver the first aircraft to Swiss International in September 2003; however, specific US Airways RJ delivery news cannot be announced until the airline emerges from bankruptcy.

4. With Midway's largest operation is expected to be DCA (85 percent DCA and 15 percent RDU) and the MDA headqaurters are located in PIT at RIDC West. The airline now has about 30 employees working on the operational start up; however, with the airline a division of US Airways it does not require an FAA operating certificate, which will permit a faster start up.

Initial flying is expected to be based in PIT and the airline will continue to use RIDC Park West office space, PIT hangars, and PIT training facilities to create economies of scale and further lower unit costs.

5. I believe we could see a start up of the company as soon as US Airways emerges from bankruptcy with aircraft deliveries as early as the fourth quarter.