- Aug 20, 2002
- 2,070
- 270
Okay...there have been a million posts on what US Airways is doing, going to do, so on and so forth. I was going to respond in one of the existing threads but the problem I found - which one? So instead of scattering my thoughts all over the place, I'll just post them here...point by point.
Shuttle
There is a lot of chatter about the sale of assets, and in particular the Shuttle. People need to understand that this isn't as easy as it was during the UA Merger talks. Shuttle is now integrated completely into mainline and there is no longer a dedicated shuttle fleet. The slots for DCA and LGA are also considered collateral by the ATSB for the fed backed loan. Therefore if any sale of slots occurs, ATSB will need to approve it. Of course you run into the situation that nothing will keep US Airways (except maybe a noncompete agreement) from retaining a shuttle operation with the slots they will own. My thoughts...there will not be any sale of the "Shuttle" because there really isn't anything to sell anymore. Plus, the yeilds on the shuttle routes are down significantly from a couple years ago - they aren't the major money makers they use to be.
Piedmont, Allegheny, and PSA
The next batch they are talking about will be the wholly owned express carriers. These three really will not raise enough capital to make them worth selling. Who would want a bunch of tired Dash 8s and odd ball Dornier 328s? Yes PSA does have some CRJs now...but not enough to really excite anyone. What I expect to happen is that they will FINALLY be consolidated into 1 airline - OR - ALG and PDT will be packaged up and sold off to Mesa and PSA remain behind as the sold wholly owned RJ operator. This will also prep PSA for an eventual spin off and IPO once they have enough. Can you say ExpressJet? Hmm...who was the man behind ExpressJet?
Union Wakeup Call
That is really all this asset sale talk is. It is to get the butts of the unions back at the table to listen to Dave's new business plan for the airline. The plan DOES include more concessions in the form of productivity improvements. From what I have read and heard, it appears ALPA is now ready to sit down and talk about the new plan with Dave. I fully expect the other unions to come forward and do the same. Will there be a sale of assets? I expect the PDT & ALG situation above to be the extent of it and only to get the attention of the unions should they stray.
What Next?
The next step is to get the unions at the table. Once they do this and get an agreement that works for everyone, expect a new order for aircraft. With the productivity improvements that Dave is proposing, it will allow them to add 60 more Airbus 320 family aircraft in the fleet. Dave wants to add these over the next 2 years; 30 this year and 30 next year. These will NOT be replacement aircraft but growth aircraft taking the mainline fleet to 339. The plan for these new aircraft and existing ones is for expansion. It appears that 64 of them, 24 initially, will be used to bulk up flying to the western US and within the west itself. The total increase in flight frequencies will be around 200 new flights. Exactly to what method this will be done, I don't know and neither will anyone til it is announced for competitive reasons.
The Embraers will also be key to the growth of the airline. The 170s will be released quickly across the Northeast to get the 737s and Airbuses off of the short routes. This will help play into the plan of the above but also to continue expansion into Central and South America and the Carribean. It will not be unexpected to see many of the Saturday Only flights go to 4+ weekly flights.
Express consolidation is also going to be important. Dave has said he wants maybe 2 or 3 Express carriers and that is it. Mesa will very likely be one and PSA another. This is help improve the level of service across the product by actually delivering a similar product across the board. It really hurts when you have some really poor airlines like Shuttle America giving a bad name to US Airways Express when you have PDT, ALG or PSA doing an outstanding job.
Final Thoughts
Posted on another board. Interesting thoughts!
There will be an asset sale, but of what...probably PDT and ALG. Shuttle is not going to be sold because there really isn't anything to sell. As far as the company goes...there won't be another Chapter 11 - 'Bama Dave would lose all of his money and be #2 in line to collect (just ahead of other shareholders). A visit to Chapter 7 is a possibility, but right now it is only an idle threat to labor. Merger? Nope. Mergers are too messy and won't happen...especially with the extremely senior US Airways employees.
There are a lot of opinions expressed on this board, but sometimes everything just needs to come to a stop for people to collect their thoughts. Personal feelings aside...the views above I believe are the most logical when looking at the history of the company and management team. We know the games that are played and how the whole chess game works out. Any posts where people are writing off the company, wanting to split it up, and the like are just personal views enhanced by their feelings for the airline - good or bad. Hopefully this discussion can continue on an elevated level away from personal feelings and based off of knowledge, facts, and common sense.
Shuttle
There is a lot of chatter about the sale of assets, and in particular the Shuttle. People need to understand that this isn't as easy as it was during the UA Merger talks. Shuttle is now integrated completely into mainline and there is no longer a dedicated shuttle fleet. The slots for DCA and LGA are also considered collateral by the ATSB for the fed backed loan. Therefore if any sale of slots occurs, ATSB will need to approve it. Of course you run into the situation that nothing will keep US Airways (except maybe a noncompete agreement) from retaining a shuttle operation with the slots they will own. My thoughts...there will not be any sale of the "Shuttle" because there really isn't anything to sell anymore. Plus, the yeilds on the shuttle routes are down significantly from a couple years ago - they aren't the major money makers they use to be.
Piedmont, Allegheny, and PSA
The next batch they are talking about will be the wholly owned express carriers. These three really will not raise enough capital to make them worth selling. Who would want a bunch of tired Dash 8s and odd ball Dornier 328s? Yes PSA does have some CRJs now...but not enough to really excite anyone. What I expect to happen is that they will FINALLY be consolidated into 1 airline - OR - ALG and PDT will be packaged up and sold off to Mesa and PSA remain behind as the sold wholly owned RJ operator. This will also prep PSA for an eventual spin off and IPO once they have enough. Can you say ExpressJet? Hmm...who was the man behind ExpressJet?
Union Wakeup Call
That is really all this asset sale talk is. It is to get the butts of the unions back at the table to listen to Dave's new business plan for the airline. The plan DOES include more concessions in the form of productivity improvements. From what I have read and heard, it appears ALPA is now ready to sit down and talk about the new plan with Dave. I fully expect the other unions to come forward and do the same. Will there be a sale of assets? I expect the PDT & ALG situation above to be the extent of it and only to get the attention of the unions should they stray.
What Next?
The next step is to get the unions at the table. Once they do this and get an agreement that works for everyone, expect a new order for aircraft. With the productivity improvements that Dave is proposing, it will allow them to add 60 more Airbus 320 family aircraft in the fleet. Dave wants to add these over the next 2 years; 30 this year and 30 next year. These will NOT be replacement aircraft but growth aircraft taking the mainline fleet to 339. The plan for these new aircraft and existing ones is for expansion. It appears that 64 of them, 24 initially, will be used to bulk up flying to the western US and within the west itself. The total increase in flight frequencies will be around 200 new flights. Exactly to what method this will be done, I don't know and neither will anyone til it is announced for competitive reasons.
The Embraers will also be key to the growth of the airline. The 170s will be released quickly across the Northeast to get the 737s and Airbuses off of the short routes. This will help play into the plan of the above but also to continue expansion into Central and South America and the Carribean. It will not be unexpected to see many of the Saturday Only flights go to 4+ weekly flights.
Express consolidation is also going to be important. Dave has said he wants maybe 2 or 3 Express carriers and that is it. Mesa will very likely be one and PSA another. This is help improve the level of service across the product by actually delivering a similar product across the board. It really hurts when you have some really poor airlines like Shuttle America giving a bad name to US Airways Express when you have PDT, ALG or PSA doing an outstanding job.
Final Thoughts
Posted on another board. Interesting thoughts!
There will be an asset sale, but of what...probably PDT and ALG. Shuttle is not going to be sold because there really isn't anything to sell. As far as the company goes...there won't be another Chapter 11 - 'Bama Dave would lose all of his money and be #2 in line to collect (just ahead of other shareholders). A visit to Chapter 7 is a possibility, but right now it is only an idle threat to labor. Merger? Nope. Mergers are too messy and won't happen...especially with the extremely senior US Airways employees.
There are a lot of opinions expressed on this board, but sometimes everything just needs to come to a stop for people to collect their thoughts. Personal feelings aside...the views above I believe are the most logical when looking at the history of the company and management team. We know the games that are played and how the whole chess game works out. Any posts where people are writing off the company, wanting to split it up, and the like are just personal views enhanced by their feelings for the airline - good or bad. Hopefully this discussion can continue on an elevated level away from personal feelings and based off of knowledge, facts, and common sense.
