Well Mr. Munns long standing prognostication of a unique corporate transaction are about to unfold, not surprisingly not quite the way he invisioned it, but a transaction none the less.
I would really like to slam Chip right now, God knows he deserves it, for the countless thoughtless missives he aimed at UAL, but out of respect and concern for my many friends at US AIRWAYS I will refrain. Good luck and all the best.
Ron
US Airways Said to Be Pursuing Big Asset Sales
By MICHELINE MAYNARD and ANDREW ROSS SORKIN
Published: January 8, 2004
ess than a year after it emerged from bankruptcy protection, and facing stiff competition from low-fare competitors, US Airways is seeking buyers for a number of its assets, including its East Coast shuttle and possibly one of its three hubs, people who have been briefed on the airline's plans said last night.
Advertisement
The move comes as US Airways has failed to obtain the support of its unions for revisions in its business plan, which would supplant the restructuring plan it completed last April.
As a result, the airline is considering selling assets, those briefed on the plans said. Among them are its shuttle serving Boston, Washington and New York, which operates out of La Guardia Airport; additional gates at La Guardia and Logan Airport in Boston; its regional operation, US Airways Express; and a hub, either Pittsburgh, Philadelphia or Charlotte. A spokesman for US Airways declined to comment.
The airline has retained Morgan Stanley to gauge interest and find potential suitors. A spokesman for Morgan Stanley declined to comment last night.
The airline, the country's seventh largest, filed for bankruptcy protection in August 2002, citing a slump in travel after the September 2001 terrorist attacks.
As part of its restructuring, US Airways' unions agreed to two sets of concessions, which the airline used to obtain $500 million in financing from the Retirement Systems of Alabama, whose chief executive, David G. Bronner, is now the airline's chairman.
But last month, the chief executive of US Airways, David Siegel, said the airline would be forced to revise the business plan on which it based its emergence from bankruptcy last spring. Specifically, he cited a decision by Southwest Airlines to begin operations in May from Philadelphia, one of US Airways' hubs.
Mr. Siegel warned that Southwest's arrival would most likely prompt fares to drop 30 percent and said the airline had to cut its costs in advance so that it could lower its own ticket prices. In addition, US Airways must make debt payments in June to meet covenants of $900 million in federal loan guarantees, which it received when it emerged from bankruptcy.
US Airways lost $90 million in the third quarter, when other carriers posted small profits, buoyed by healthy summer traffic and refunds of federal security fees. The airline has about $1 billion in cash, less than half that of its bigger rivals.
The airline has said every aspect of its operations is under review, from labor costs to schedules to routes, as part of its cost-cutting. But selling assets would be a faster and presumably simpler way for the airline to raise money, depending on the bids it received.
Mr. Siegel's candor about the airline's problems has led to widespread speculation within the airline industry that US Airways might have to seek bankruptcy protection once again. US Airways executives have flatly denied they have any plans for a second bankruptcy filing.
But the chief executive of one airline, who spoke in the condition of anonymity, said last week that Mr. Siegel faced a difficult situation, not only because of Southwest's arrival in Philadelphia, but because low-fare competition is heating up all around US Airways.
Referring to Southwest's plans to begin service at Philadelphia, the executive said, "They're thinking, 'If US Airways goes out of business, we want to be there.' "
Mr. Siegel had met late last year with officials of the company's unions, in a bid to win their support for further cuts. He had characterized the meetings as positive. But last month, leaders of US Airways' pilots union called for Mr. Siegel to step down, contending he had lost the faith of airline employees. Meanwhile officials of its mechanics union refused to grant further cuts, saying, "the concessions stand is closed."
The airline decided to go ahead with drafting its cost-cutting plan and said it would outline it this quarter. But on Tuesday, it postponed a series of meetings with employees that it had planned over the next few weeks.
In a recorded phone message, Mr. Siegel said leaders of the company's unions said they had "no interest in hearing the revised business plan or even having discussions with management on work rule and productivity changes."
I would really like to slam Chip right now, God knows he deserves it, for the countless thoughtless missives he aimed at UAL, but out of respect and concern for my many friends at US AIRWAYS I will refrain. Good luck and all the best.
Ron
US Airways Said to Be Pursuing Big Asset Sales
By MICHELINE MAYNARD and ANDREW ROSS SORKIN
Published: January 8, 2004
ess than a year after it emerged from bankruptcy protection, and facing stiff competition from low-fare competitors, US Airways is seeking buyers for a number of its assets, including its East Coast shuttle and possibly one of its three hubs, people who have been briefed on the airline's plans said last night.
Advertisement
The move comes as US Airways has failed to obtain the support of its unions for revisions in its business plan, which would supplant the restructuring plan it completed last April.
As a result, the airline is considering selling assets, those briefed on the plans said. Among them are its shuttle serving Boston, Washington and New York, which operates out of La Guardia Airport; additional gates at La Guardia and Logan Airport in Boston; its regional operation, US Airways Express; and a hub, either Pittsburgh, Philadelphia or Charlotte. A spokesman for US Airways declined to comment.
The airline has retained Morgan Stanley to gauge interest and find potential suitors. A spokesman for Morgan Stanley declined to comment last night.
The airline, the country's seventh largest, filed for bankruptcy protection in August 2002, citing a slump in travel after the September 2001 terrorist attacks.
As part of its restructuring, US Airways' unions agreed to two sets of concessions, which the airline used to obtain $500 million in financing from the Retirement Systems of Alabama, whose chief executive, David G. Bronner, is now the airline's chairman.
But last month, the chief executive of US Airways, David Siegel, said the airline would be forced to revise the business plan on which it based its emergence from bankruptcy last spring. Specifically, he cited a decision by Southwest Airlines to begin operations in May from Philadelphia, one of US Airways' hubs.
Mr. Siegel warned that Southwest's arrival would most likely prompt fares to drop 30 percent and said the airline had to cut its costs in advance so that it could lower its own ticket prices. In addition, US Airways must make debt payments in June to meet covenants of $900 million in federal loan guarantees, which it received when it emerged from bankruptcy.
US Airways lost $90 million in the third quarter, when other carriers posted small profits, buoyed by healthy summer traffic and refunds of federal security fees. The airline has about $1 billion in cash, less than half that of its bigger rivals.
The airline has said every aspect of its operations is under review, from labor costs to schedules to routes, as part of its cost-cutting. But selling assets would be a faster and presumably simpler way for the airline to raise money, depending on the bids it received.
Mr. Siegel's candor about the airline's problems has led to widespread speculation within the airline industry that US Airways might have to seek bankruptcy protection once again. US Airways executives have flatly denied they have any plans for a second bankruptcy filing.
But the chief executive of one airline, who spoke in the condition of anonymity, said last week that Mr. Siegel faced a difficult situation, not only because of Southwest's arrival in Philadelphia, but because low-fare competition is heating up all around US Airways.
Referring to Southwest's plans to begin service at Philadelphia, the executive said, "They're thinking, 'If US Airways goes out of business, we want to be there.' "
Mr. Siegel had met late last year with officials of the company's unions, in a bid to win their support for further cuts. He had characterized the meetings as positive. But last month, leaders of US Airways' pilots union called for Mr. Siegel to step down, contending he had lost the faith of airline employees. Meanwhile officials of its mechanics union refused to grant further cuts, saying, "the concessions stand is closed."
The airline decided to go ahead with drafting its cost-cutting plan and said it would outline it this quarter. But on Tuesday, it postponed a series of meetings with employees that it had planned over the next few weeks.
In a recorded phone message, Mr. Siegel said leaders of the company's unions said they had "no interest in hearing the revised business plan or even having discussions with management on work rule and productivity changes."
) and give them the very best possible experience. Give them a great product and they WILL return.
Compassion! I'm sure he feels pretty defenseless right now but I also realize that if this were an asset sale from United, he would be the first one to start picking at the almost dead carcass of United. 
