USA320Pilot
Veteran
- May 18, 2003
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Fight over Air Wisconsin
CHARLOTTE (Observer) - US Airways and competitor United Airlines are dueling in court over the loyalty of Air Wisconsin Airlines.
Air Wisconsin has agreed to provide US Airways with $125 million in financing and has signed an agreement with the airline that could allow it to fly regional jets under the name US Airways Express.
But United, which contracts with Air Wisconsin to fly regional jets, said in court papers this month that it wants to fully examine US Airways' agreement with Air Wisconsin to see "whether it may violate or conflict" with United agreements. Bankruptcy court papers include the US Airways-Air Wisconsin agreement, but key financial provisions have been blacked out.
In response, US Airways filed a motion Friday seeking to limit United's access to the agreement. US Airways said United's argument is "hypocritical and reveals the real purpose of its ... Motion -- to gain an unfair competitive advantage over US Airways."
A hearing on the matter is scheduled for later this month. Outside of court, the two airlines share a marketing alliance and sell tickets for each other's flights.
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USA320Pilot comments: During last week’s ALAP MEC meeting chief executive officer Bruce Lakefield said the Air Wisconsin deal has the “industry spinning around†and has “UAL confusedâ€. It appears UAL is more than confused since it has not yet affirmed the Air Wisconsin “fee for service†contract, is publicly entering bids to replace the Appleton-based carrier a la Atlantic Coast, and UAL probably does not like the new US Airways-Republic deal either. Air Wisconsin has hedged its position and with the industry in total meltdown and US Airways continuing to make progress in it’s restructuring during very difficult times, the Arlington-based carrier made an interesting claim in its motion when it said, United's argument is "hypocritical and reveals the real purpose of its ... Motion -- to gain an unfair competitive advantage over US Airways."
It is my understanding US Airways continues to negotiate with its two other affiliate partners, Mesa and TSA to lower their “fee for service†contracts, which currently pay the affiliates cost plus 8% or to provide US Airways with equity. Lakefield believes the current contracts places US Airways with all of the risk and the affiliate with all of the benefit. If either affiliate carrier does not provide cost relief or equity, then Lakefield indicated to ALPA one of them will likely be replaced by Air Wisconsin. US Airways’ lowest cost and poorest performing affiliate RJ operator is Mesa, which has the greatest risk of being replaced by Air Wisconsin. This too could explain some of United’s motivation and why Lakefield indicated the Chicago-based carrier’s management seems “confusedâ€.
Regards,
USA320Pilot
CHARLOTTE (Observer) - US Airways and competitor United Airlines are dueling in court over the loyalty of Air Wisconsin Airlines.
Air Wisconsin has agreed to provide US Airways with $125 million in financing and has signed an agreement with the airline that could allow it to fly regional jets under the name US Airways Express.
But United, which contracts with Air Wisconsin to fly regional jets, said in court papers this month that it wants to fully examine US Airways' agreement with Air Wisconsin to see "whether it may violate or conflict" with United agreements. Bankruptcy court papers include the US Airways-Air Wisconsin agreement, but key financial provisions have been blacked out.
In response, US Airways filed a motion Friday seeking to limit United's access to the agreement. US Airways said United's argument is "hypocritical and reveals the real purpose of its ... Motion -- to gain an unfair competitive advantage over US Airways."
A hearing on the matter is scheduled for later this month. Outside of court, the two airlines share a marketing alliance and sell tickets for each other's flights.
See Story
USA320Pilot comments: During last week’s ALAP MEC meeting chief executive officer Bruce Lakefield said the Air Wisconsin deal has the “industry spinning around†and has “UAL confusedâ€. It appears UAL is more than confused since it has not yet affirmed the Air Wisconsin “fee for service†contract, is publicly entering bids to replace the Appleton-based carrier a la Atlantic Coast, and UAL probably does not like the new US Airways-Republic deal either. Air Wisconsin has hedged its position and with the industry in total meltdown and US Airways continuing to make progress in it’s restructuring during very difficult times, the Arlington-based carrier made an interesting claim in its motion when it said, United's argument is "hypocritical and reveals the real purpose of its ... Motion -- to gain an unfair competitive advantage over US Airways."
It is my understanding US Airways continues to negotiate with its two other affiliate partners, Mesa and TSA to lower their “fee for service†contracts, which currently pay the affiliates cost plus 8% or to provide US Airways with equity. Lakefield believes the current contracts places US Airways with all of the risk and the affiliate with all of the benefit. If either affiliate carrier does not provide cost relief or equity, then Lakefield indicated to ALPA one of them will likely be replaced by Air Wisconsin. US Airways’ lowest cost and poorest performing affiliate RJ operator is Mesa, which has the greatest risk of being replaced by Air Wisconsin. This too could explain some of United’s motivation and why Lakefield indicated the Chicago-based carrier’s management seems “confusedâ€.
Regards,
USA320Pilot
