US Airways' hints about cutting fleet worry pilots

Lou

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Aug 20, 2002
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[A href=http://www.usatoday.com/travel/news/2002/09-16-us-airways.htm]http://www.usatoday.com/travel/news/2002/09-16-us-airways.htm[/A]
 

Bob Owens

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Sep 9, 2002
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I bet the pilots are glad that they voted in those concessions to save the company. It wont save their jobs though will it? If the fleet is reduced by 40% the headcount will follow.
 

ITRADE

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Aug 19, 2002
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[P]I'm trying to work the math on this one, but it really sounds like US is going to be acquired by NW.[/P]
[P]165 would equate all the A-320 family craft, the A-330s, the 757s, and a few 737s. I'm going to bet that the 737s will be throw aways.[/P]
[P]US may activate this plan if IAM or CWA nix the proposed contracts in the voting that's wrapping up.[/P]
 

us10

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Sep 11, 2002
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Owens;

You and your airline gain if U closes it's doors, try selling it somewhere else.
 

AP Tech

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Sep 4, 2002
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I am awaiting some pilots response to this post, since they were so willing to give advise to the mechanics and related on what they should do when they vote. Their opinion on the company being labor friendly may be altered!
 

us10

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Sep 11, 2002
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These A/C lessors like other stake holders want to keep what they have.If U has been given authorization by the judge to return these A/C it puts pressure on them to lower their rates and settle with the company . During the meeting I attended Dave said if the lessors don't go along he would return their A/C and lease parked A/C compatible with our fleet.
 
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chipmunn

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By the way, what better way for Northwest to head off the potential fragmentation of UA's domestic system into US, than to buy your competition.

This would have a very negative effect on UA.

Chip
 

Lakeguy67

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Aug 31, 2002
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[STRONG][FONT color=#0000cc]Boob Owens, go back to AA and don't worry about US, you are only in this for yourself. And where in any motion or in any company press release does it say they are going to ground the planes. In bankruptcy you have 60 days to abrogate or renegoiate aircraft leases. Boeing is giving them a hard time on this matter. So they are seeking to extend the 60 day period, no where does it say they are going to park those planes. And even if they did, they have binding contracts with section 1113 letters with all the unionizied groups that have settled and those 1113 letters are enforceable and to this date since 1982 when section 1113 was enacted, no judge as abrogated them, AA tried last year with TWA and the judge said NO![/FONT][/STRONG]
 

USFlyer

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Aug 19, 2002
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Please define your view of labor friendly. What would the Company have to do for the majority of employees to consider this Ch. 11 as labor friendly?
 
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chipmunn

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The USA Today article places more leverage on the lessors and union votes. The company must cut its costs to be able to compete in this day and age.

Could the airline cut its fleet to 165, absolutely, but it would make the route network extremely inefficient with excess facilities.

However, without all stakeholder cost reduction participation, either voluntary or court-ordered, the airline could be forced to get rid of some Boeing jets.

There are two other possibilities as well. The company has asked for the aircraft leases to be rejected in the future, with no end date. This could allow the company to incrementally return aircraft and simplify its fleet by taking Airbus deliveries to obtain a single fleet type.

Finally, Northwest CEO Richard Anderson is said to be obsessed with obtaining the PHL & CLT hubs, as well as the Shuttle. If something happens negative with the union’s votes and the DIP financing and ATSB loan is not obtained, this move could pave the way for fragmentation.

Therefore, to keep the airline intact, there needs to be voluntary accords obtained from the IAM-M and CWA or their contract thrown out on September 23, or on September 26 at the DIP financing hearing we could see other offers emerge for the company, which could be very unlabor friendly.

It could be people like Northwest, Carl Icahn, Marvin Davis or others.

Chip
 

G4G5

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Aug 21, 2002
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Anderson is going to have to deal with Bonderman(TPG). Bonderman has more money. Which means if NWA want's U they are going to need to get labor on their side.

On a seperate note, how is U hedged for fuel? If the W decides to go into Iraq, fuel prices are going up and those not properly hedged will be at a true disadvantaged.
 

us10

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Sep 11, 2002
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G4G5;

Suggest you devote your energies on the AA board trying to explain to the TWA pilots why your union stapled them to the bottom of the list.
 

A320 Driver

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Aug 24, 2002
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I read somewhere that we had stopped hedging fuel because of the BK filing. I'm not sure what one has to do with the other, but that's what I read.
As for the request Dave made to the judge about the future leases, I do not find this particularly disturbing. Our goal from the beginning of our airbus order was to eventually rationalize the fleet...meaning an all Airbus fleet. We don't need to go through another round of aircraft replacement only to have to continue paying for A/C that we no longer operate. The advanteges are obvious. Southwest enjoys the benefit of one A/C type and we should plan accordingly. The 321 is not the performer that the 757 is, however it does every bit as good as the 727. It will fill or needs well on our domestic route system. BTW, for all you patriots (myself included) my understanding is the Bus is around 40% american made. Much of the Boeings these days have foreign parts and foreign labor building them. We just put the big parts together (except the 747 which last time I saw was bult from start to finish in Everett, Wa).

A320 Driver
 
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chipmunn

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G4G5:

G4G5 said: Anderson is going to have to deal with Bonderman(TPG). Bonderman has more money. Which means if NWA want's U they are going to need to get labor on their side. On a seperate note, how is U hedged for fuel? If the W decides to go into Iraq, fuel prices are going up and those not properly hedged will be at a true disadvantaged.

Chip comments: G4G5, in today's economy labor in a consideration, but the NW employees and in particular the pilot group, displayed their out of the box thinking when the pilots provided their provided scope relief to permit the CO alliance. This alliance has provided each airline with 4 points in additional load factor and significantly improved their respective margins.

In regard to your comments about energy prices, it is likely that Middle East political tensions have added $5 to $7 per barrel to near-term oil prices and about the same premium to the NYMEX futures contract(s).

With the premium built in to current prive levels and the likelihood of a quick war, just like in 1991-1992, once Saddam Hussein is removed it is likely we will see oil prices drop like a rock, which is normal. People buy the rumor and sell the news; therefore, I'm not overly concerned about oil prices in the medium to long-term we could actually see the commodity price reduced to more reasonable levels.

Motnot asked: Where do you get this, Chip. I've never seen anyone say that NWAC is interested in CLT, let alone obsessed.

Chip answers: A NW MEC member and a Wall Street airline analyst. It would not surpirse me if NW made an offer to buy the company, which would obviously hurt UA.

Chip