Survivor

[USA320Pilot]

BoeingBoy:

BoeingBoy said: "Didn't management tell the ALPA MEC that they needed scope relief to insure that the RJ's ,including E-170's, remained in the U system since they are to provide 50% of our revenue stream in 2004? It they go to serve United in IAD, there goes the revenue stream, and consequently there goes U - according to management."

USA320Pilot comments: With the plan to sell non-core assets to pay down the loan guarantee and reduce US Airways Group RJ lease expense, the company would require less revenue to meet the 7 percent profit margin in 7 years. Moreover, the debt reduction would faciliate M&A activity and help the company become profitable.

In regard to the revenue stream, the United announcement was for 16 70-seat RJs, of which US Airways has orders for 85 EMB-170s, 50 EMB-170 options, and authorization for 80 CRJ-700s. United apparently has reached agreement on 16 50-seat RJs, which US Airways does not have a scope problem.

Moreover, the Company is requested ALPA increase Large (70-seat) SJs to be flown at PSA by 35, from 25 to a total of 60.

Respectfully,

USA320Pilot

 

[BoeingBoy]

USA320Pilot,

So you're saying that the MEC members posting on the ALPA site are either wrong or misinformed when they say the scope relief is needed to prevent GECAS from pulling the RJ financing. I believe you have said the same thing.

Is the real plan to get scope relief to allow the sale of assets?

Jim

 

[BoeingBoy]

USA320Pilot,

To get this at least back toward the topic....

After a little searching, here are your words:

March 7 - Thus, if GECAS requires the aircraft to be flown at an affiliate carrier, it is much better to have them flown in the US Airways Express network for an affiliate carrier than at United Express.

March 6 - Any such agreement would also have a MOU to require the aircraft to be flown J4J and per current US Airways Express agreements. In fact, GECAS wants this to occur and for US Airways to succeed to protect their 5% ownership in US Airways, protect their $2 billion in mainline aircraft financing, and maintain their CFM engine overhaul power-by-hour contract.

It's important to GECAS and US Airways that the revenue be kept within US Airways Group to meet ATSB requirements.

March 6 - Moreover, the LOA will prevent United from getting its hands on near-term CRJ and EMB RJ delivery positions, which will cut off a key avenue for the Chicago-based airline to fix its Dulles hub problem.

March 6 (quoting a MEC officer) - Because that revenue stream makes up a significant portion of the revenue that we told the ATSB we would deliver under our Plan of Reorganization (POR), and if it goes away we are going to have even bigger problems meeting our ATSB loan covenants.

March 6 - Moreover, there are reports United Airlines is trying to obtain US Airways' RJ delivery positions as a means to fix Dulles and unless ALPA gives in to GECAS' demands, the financier could strip US Airways of RJ delivery positions and move them to United Express.

March 10 - Meanwhile, there is some reason to believe that GECAS could be operating behind the scenes to facilitate a deal with US Airways by orchestrating financing to permit US Airways to pay down the loan guarantee and provide a means for United to obtain Dulles RJ feed with US Airways EMB and/or CRJ delivery positions.

Seems like 3 & 4 days ago you were saying that it was better to keep the revenue stream in-house and that GECAS wanted to keep the RJ's in-house to protect it's investment. Now you're saying that GECAS is orchestrating the movement of some RJ flying over to United feed at IAD. What changed?

Jim

 

[USA320Pilot]

BoeingBoy:

I believe GECAS is forcing the scope relief for a number of reasons:

1. Diversify their risk.

2. Improve US Airway's finances, cash flow, and short/long-term debt. Scope relief would permit US Airways to spin off PSA and the CRJ delivery positions, which could be transferred to an affiliate carrier. That's why the company is seeking the CRJ-700 100% APL relief be converted to 50-50% APL manning, which would comply with Mesa, TSA, and Chautauqua J4J agreements.

3. Assist US Airways meet ATSB requirements, which will be renegotiated, but the RJ scope relief must move forward first that will pre-frame ATSB discussions. That's why David Bronner told Dan Fitzpatrick last week that there are discussions under way with the ATSB. "We are working on something that basically allows us more flexibility and allows them to get some of their money back," Bronner said.

See Story

GECAS recognizes the impact of M&A activity in mature business' as a means of improving profits with economies of scale, "S" curve economics, and revenue generation.

GECAS owns 5% of US Airways, has $2 billion in mainline aircraft financing at risk, $2 billion in RJ financing at risk, and the CFM power-by-hour engine overhaul contract. Moreover, GECAS has considerable exposure at United and for the company to emerge, it must either close Dulles or find feed that would need to be about 50 RJs and 30 turboprops.

However, what's interesting about this is United's press release did not state the type of RJ's to be recieved or a delivery date. Why the secret?

Specifically, United said under a new agreement, United has authorized Republic to fly sixteen seventy-seat regional jets under the United Express livery. Chautauqua will operate sixteen fifty- seat regional jets for United Express and Shuttle America will fly ten Saab 340 turbo prop aircraft.

See Story

Regardless, there is some reason to believe that GECAS could be orchestrating some sort of M&A activity between US Airways and United as a means to permit both companies to survive.

In conclusion, US Airways does want to keep as much MDA RJ flying in-house as possible because its more profitable. Moreover, the company is pushing the NC hard to ahve ALPA increase Large (70-seat) SJs to be flown at PSA by 35, from 25 to a total of 60. However, GECAS is concerned about their money and risk, not only at US Airways, but at United too, which now appears to be a factor that could lead to some backroom negotiations.

Respectfully,

USA320Pilot

 

[USA320Pilot]

BoeingBoy:

BoeingBoy asked: Is the real plan to get scope relief to allow the sale of assets?

USA320Pilot answers: That's part of it. PSA will almost certainly be sold (my bet is to Mesa) and maybe MDA too, according to an MEC member. The deal would be to pay down the loan guarantee.

Just one more point, it would not surprise me to see Northwest bid for US Airways as a defensive measure and a means to hurt United, maybe mortally.

Respectfully,

USA320Pilot

 

[BoeingBoy]

USA320Pilot,

I probably put it badly, but you missed the point of my question.

3 days ago you were saying that GECAS wanted to keep the RJ revenue stream coming to U. Today you say GECAS is working to move some of the RJ's to UAL feed at IAD.

Have they discovered the benefits of M&A in the last 3 days? Have they only become nervous about UAL's financial condition in the last 3 days?

As an aside, a MEC member mentioned that some of the Republic RJ's destined for UAL express were "rumored" to be E-170's. I guess what he didn't know, or you either, is that GECAS has E-170's on order which are not included in U's order.

Jim

 

[boeing787]

USA320pilot you are out to lunch. Go back and have your crewmeal while you still can. UAL will not bother merging with U. Goodbye!

 

[Colby]

Good God, Why don't we just call this the Duel Between

Boeing Boy and USA 320 Pilot......




How about this.... Let's all just do the best we can to Make all the
Naysayers of US AIRWAYS..... Proven WRONG.....

I have ( or in some cases used to have) Friends from other Airlines that
have gotten on my last Nerve with their insinstance of the Fall of Us Airways...

Sorry, BUT I don't know if It's my Irish Blood or my Aries Blood that won't let me be a Quitter !!! So, Let's not be QUITTERS !!!!

 

[bobcat]

In my opinion and many co-worker's opinion, the quitters are the ones that will vote "yes" for more consessions. The quitters are the ones that will be beaten down again by management and most likely again and again in the future until there is nothing left. The quitters are the ones that feel no confidence in themselves or their skills. They just sit around day in and day out crying and wondering how they will survive if they lose their job at US, instead of preparing and doing something about it.

The ones that are not quitters are the strong self-confident employees that are not afraid to stand up for themselves and shout "enough is enough". We are sick of giving our hard earned money to this airline to have is squandered away and put into a failing management's pockets while being lied to and belittled along the way. We are the ones that won't quit. We look forward to the challenge of a new career, one that we may actually enjoy. One where we will be respected and compensated for a job well done. We do have skills, excellent work ethics and will be an asset to any company. We will survive.

The ones that are not quitters will move forward into their next endeavor and not look back. The quitters will offer more and more to the thieves that live in huge homes with one or more summer homes, multiple luxury cars and a huge pile of "our" money stashed away for luxury retirement living, while they struggle to put food on the table, despise going to a job they hate each day and making half of what they did four years ago, working harder and longer, paying more for health care (if they can afford it at all), with less time off to recover from their rigorous work schedule and duties. All the while shaking like wet scared puppies, worried that they may lose their "wonderful" job.

If US can survive without "stealing" more of the employee's money and learn how to treat their employees and passengers with dignity, respect and appreciation and learn how to run this airline efficiently and profitably, then that would be a wonderful thing for all. Then we can all live happily ever after. Now, this scenario is probably a pipe-dream. If it can't, and most likely won't, then we all need to stand up for ourselves this time around and then stick it out until USAirway's dying day and then depart with our chins up and move on to the next chapter and a brighter day.

 

[ktflyhome]

Very Well Said...BobCat. My sentiments exactly. I am proud to say that I have voted NO on every contract presented to me in my career here at USAirways. Even though it didn't ultimately make any difference....at least I know I didn't sell myself out.

 

[Bear96]

Very Well Said...BobCat. My sentiments exactly. I am proud to say that I have voted NO on every contract presented to me in my career here at USAirways. Even though it didn't ultimately make any difference....at least I know I didn't sell myself out.

It bugs me when people think they can absolve themselves of all responsibility and take the moral high road when they brag about voting No on contracts for their entire careers. We have these people at UA too.

If you voted No on everything, yet still continued working FOR AN ENTIRE CAREER at a compensation level that is apparently less than you think is acceptable, congratulations-- you have still "sold yourself out," even though you voted No.

The action of working under an unacceptable contract speaks louder than the mere words of bragging about voting No.

 

[Colby]

Unfortunatley I won't have a Chance to Vote this time around... All I'll be able to do is sit back and see what my Future Holds....

However, I believe the Title of this Post is SURVIVOR !!! So, I will go to Mid Atlantic when given the chance because that is what I want to do and If that Falls apart then... I will and Only then will I Move on......Since there will be no options left....

 

[ktflyhome]

That is the beauty of being ABLE to Vote. One has a CHOICE. And at least my vote(s) didn't contribute to selling my fellow employees down the pike. I voted for what I thought was right.

 

[bobcat]

Bear96,

You are completely wrong saying that the "NO" voters still sold themselves out by still working for the company under an unacceptable contract. Anyone in their right mind wants to get paid the most that they can and get the most benefits that they can. If we didn't we wouldn't need a contract. We would just let management take what they want when they want freely. If you were negotiating salary with a new employer wouldn't you negotiate for the highest salary that you could. You would at least want what you think you are worth. Who's to say what would have happened if any of the groups would have said no the last two times. Obviously the cuts didn't make much difference so, who's to say we may of still been here in this same position without the cuts and making more money with better benefits.

Well the current contract is hard to swallow but still acceptable... up until this point. We all gave (twice) with the understanding that our consessions would definately turn this airline around. Well, we're worse off now than before and now being asked for a 25% cut in pay and benefits with less employees and worse work conditions. Where did that money go? Where will the money from another round of consessions go? Managements pockets! If you believe more consessions are the answer you're living in a dream world. Whether we give more or not is ultimately not going to make a difference. The rich will get richer and the poor will get poorer. We are too far gone. Many would rather work for more until the doors close than work for less and still have the doors close.

So, no the "NO" voters didn't sell themselves out. They are smart to stay under the current contract and collect their sufficient paychecks and any benefits due and know that they stood up for their self-worth by voting "NO" and are still here to vote "NO" again whether it means the company folds or comes up with another solution and gets new management that knows something about the airline business and can come up with a plan to turn US around without more consessions. Any more wasted consessions is absurd knowing what the end result will be.

 

[USA320Pilot]

BoeingBoy:

Yes to all of the above.

GECAS is hedging their bets, trying to help their customers, and evaluating options, in a fluid, dynamic situation.

There will be a new LOA shortly that will address all of these issues in the near-term.

Respectfully,

USA320Pilot