Revised Ge Agreement

[BoeingBoy]

A revised agreement with GE has been filed with the court. It's Docket #2230 and is at:

Revised GE MOU

The differences appear to be several, with a revised aircraft return schedule, revised RJ leasing, and revised future financing of RJ's being among the bigger - at least on first scan.

Future RJ financing:

- The financing for 31 future US RJ's is eliminated.
- GE will provide leases for 10 Emb-170/190/195's to third party carriers.

Revised current RJ financing:

- GE will provide leases for the 3 undelivered Emb-170's to Republic.
- GE agrees to assign the leases on 15 MDA Emb-170's to Republic.
- Rents on 23 CRJ-200's will be reduced for 30 months, to be made up in the following 24 months.

Boeing/Airbus returns amended:

"With respect to six (6) A319/320 aircraft that are currently subject to the Sale/Leaseback Transaction and one (1) B737-300 aircraft, the applicable leases will be amended to modify the expiry dates thereunder to provide for their early termination and return of the subject aircraft to the applicable GE Entity during the last six months of 2005."

"The leases for five (5) B737-300s currently operated by the Debtors will be amended to provide for their termination, and attendant early redelivery of the subject aircraft, between July 2005 and the Emergence/Merger Deadline Date"

"Leases in respect of an additional thirty-eight (38) Boeing aircraft from the US Airways’ fleet shall be amended to modify the expiry dates thereunder so as to provide for their early termination and concomitant early return of the subject aircraft to the applicable GE Entity between 2005 and 2009"

The dates:

1 A319 on 9/30/05
2 A320's on 10/1/05
1 A319 & 2 A320's on 11/1/05
(presumably these are in addition to the 10 announced earlier)

1 B737-300 on 6/14/05
1 B737-300 on 7/5/06
1 B737-300 on 9/1/05
1 B737-300 on 10/15/05
1 B737-300 on 10/17/05
1 B737-300 on 10/28/05
2 B737-300 on 11/14/05
1 B737-300 on 12/1/05
1 B737-300 on 12/9/05
3 B737-300 on 12/10/05
1 B737-300 on 1/7/06
4 B737-300's on 1/15/06
1 B737-300 on 1/30/06
1 B737-300 on 1/31/06
2 B737-300 on 2/1/06
1 B737-300 on 2/7/06
1 B737-300 on 2/10/06

The following can be recalled as early as the date shown by GE. Apparently, the leases would normally expire in the second half of 2009:

1 B737-400 on 7/15/07
1 B737-400 on 10/15/07
2 B737-400 on 11/15/07
1 B737-400 on 12/15/07
1 B737-400 on 1/15/08
1 B737-400 on 2/15/08
1 B737-400 on 3/15/08
1 B737-400 on 4/15/08
1 B737-400 on 5/15/08
1 B737-400 on 6/15/08

Jim

 

[jimntx]

There appears to be no timetable for the reassignment of E-170 leases to Republic. That suggests that this action is imminent. 18 E-170s sounds like all of MDA's fleet. Is it?

 

[BoeingBoy]

Right now it's 25 + 3 undelivered. The revised GE agreement covers the 15 currently here under GE leases + 3 undelivered.

Since the 10 "owned" are covered by the Republic agreement which has already been approved by the court, I presume no further filings are necessary before their sale.

Jim

 

[N924PS]

What does the loss of EOW Airbus aircraft (A320's some A319's) mean for USAirways Caribbean/Latin America flying for the remainder of 2005?

Will they be "robbing" aircraft from the transcon flying they say is so unprofitable (but the airplanes are full)?

Will there be additional pilots furloughed prior to establishing a Merger Policy Iniatiation Date (PID)?

Inquiring minds would like to know....

 

[Heinrich]

That is a LOT of planes/passengers/employees/cities/flights taken out of the system. This is supposed to promote confidence? What's on order and arriving to counterbalance this?

 

[Phantom Fixer]

That is a LOT of planes/passengers/employees/cities/flights taken out of the system. This is supposed to promote confidence? What's on order and arriving to counterbalance this?

[post="277218"][/post]​

The only "Counter-Balance I've seen is the Merger with AWA/HP. That's 139 Aircraft on its own...yet it doesn't do any real confidence buildingat all for the Rank and File at either carrier. Remember what Doug Parker said about possible furloughs if natural attrition didn't take its usual toll?

Keep in mind...the HP/US Merger called for the return of up to 60 Mainline Aircraft from the Get-Go...so it's safe to assume that most of that will come from a take-down of U's Fleet. HP only has 10 Acft that is slated for return/retirement at this point.

 

[Crzipilot]

Third Party EMB Lease
Commitment
The applicable GE Entities will provide single investor or
operating leases to third party carriers acceptable to GECAS
for 10x EMB-170/190/195 aircraft delivering between 2007
and 2008 on a schedule and on terms to be agreed and
acceptable to GECAS, conditional on manufacturer support
and order stream relief to be acceptable to GECAS and
agreed with the manufacturer and on the third party carrier
meeting certain financial tests to be agreed and acceptable to
GECAS.


Just pulled this out of the term sheet too. The 10 additional E170/190/195??? won't be delivered until 2007/8. So with the 25+3 going to republic, that would be all the E170's in the system for two years or so. Guess that can be seen as good or bad news.
Also noticed that GE would release lien on 4-CRJ-700's which US could sell, I believe to lower credit line it has with GE

 

[BoeingBoy]

Another "This is as good a place as any to put this" article....

"US Airways Group Inc. and America West Holdings Corp. recently agreed to give back 61 planes to GECAS as part of their planned merger deal."

GE airline lease CEO sees move to foreign carriers

Jim

 

[BoeingBoy]

An article on the revised GE agreement:

Leases to be modified ahead of merger

Jim

 

[Light Years]

It's really takes alot for someone like me to become dissillusioned, but I think this is it.

 

[ringmaruf]

It's really takes alot for someone like me to become dissillusioned, but I think this is it.

[post="277237"][/post]​

It really hurts for me to say it, but I think this US1 is gonna be right with you, babe.

 

[Heinrich]

Sounds like to me they won't need as many gates at PHL or CLT with all that leaving the system. Unless some of HP's planes are taking up the slack at the hubs, meaning they are pulling their flying somewhere too.

 

[delldude]

That is a LOT of planes/passengers/employees/cities/flights taken out of the system. This is supposed to promote confidence? What's on order and arriving to counterbalance this?

[post="277218"][/post]​

yep and with it maintenace and related,pilots and all.
please read the fine print carefully
comes under the "oh by the way"......

 

[TechBoy]

An article on the revised GE agreement:

Leases to be modified ahead of merger

Jim

From the article: The revisions would enable US Airways to "realize significant cost savings and liquidity, further rationalize (its) fleet and insure the consummation of the merger with America West and the successful emergence from (bankruptcy)," said court documents.

[post="277236"][/post]​

How does returning a bunch of 319/320s and 737s rationalize the fleet? There are still as many fleet types to support. If they were really working to rationalize the fleet they would be returning the 757s or just sending back 737s exclusively with an aim to someday being all Airbus. This agreement looks more like GE taking back aircraft that they know they can easily lease and taking the option to take back others if they can find lessors. GE has played its hand very well.

As for US, it's a mixed bag. Eliminating highly unprofitable routes is necessary and returning planes will help with that. But the hodge podge fleet continues and the HP merger will only make that worse. At the end of the day, US needs to drop a couple of pennies from its CASM, and none of this helps on that goal.

 

[eolesen]

At the end of the day, US needs to drop a couple of pennies from its CASM, and none of this helps on that goal.

[post="277273"][/post]​

I'd think that losing more A320's would raise CASM slightly because they're more fuel efficient. Fortunately, that's offset somewhat later when the 733's and 734's start leaving.