Us Airways' Near-miraculous Survival Plan

[EyeInTheSky]

Loan decision latest 'up' for airline
US Airways fortunes are taking off lately
Friday, January 14, 2005

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Don't look now, but US Airways may be close to pulling off a near-miraculous survival plan that many skeptics said would never happen.


Related coverage
See a graphic showing what US Airways has accomplished and what it still must do to exit bankruptcy.

The nation's seventh-largest carrier, in bankruptcy for the second time in two years, yesterday received approval to continue using day-to-day cash backed by the federal government through June 30 -- the date by which it hopes to reemerge from Chapter 11.

It marked the latest in a series of hurdles that the airline has crossed in recent months, including a bankruptcy judge's decision last week allowing US Airways to terminate pension plans covering 50,000 current and former employees and reduce health care coverage for 10,000 retirees -- saving more than $200 million a year.
...

Read the rest
http://www.post-gazette.com/pg/05014/442144.stm

 

[El Gato]

This morning, I saw a bird of paradise land on my windowsill in the chill morning air of the steel city. The bird spoke to me, saying in chirps that he was lost and was seeking his way home to the tropics. I asked him how he came to be on my windowsill, and he responded by saying he was shipped on an aircraft, but somehow he was lost amidst other bags and ended up in the 'burgh. I let him into my home, and gave him breakfast. So far, he is doing fine. Apart from my cat staring at him while licking her chops, he seems ok for now.
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The above event is written to demonstrate the power of hallucination and suspension of disbelief. Such a thing is also required to believe in anything that is printed by the Post Gazette, and the concept that you can save any company that has no leadership or proper organizational skills or the love enough to treat employees as human beings, and not machines to be ordered about. Pigs could fly, cows can jump over the moon, birds of paradise can speak, Elvis could pop out of his grave and start playing music, but companies in the shape I have described cannot be saved. Unless "suspension of idiocy" comes into play.

 

[goingboeing]

Another example of taxpayer money being given to irresponsible people[USAir management]
I hope U.S.Air does exit from C11 soon because then they will have to compete on a level playing field instead of hiding behind a C11 judge's robe.





MOD COMMENTlease Dont Quote Entire Posts

 

[roadtrip]

all off the backs of the hardworking blue collar workers!

just watch the execs pay increase if they succeed in this demon plan to kill the middle class family

 

[700UW]

Another example of taxpayer money being given to irresponsible people[USAir management]

[post="239500"][/post]​

Please show the board where any tax dollars are involved with the loan.

The funds are loaned to US Airways by private banks, not one cent of tax payer's money is loaned to US Airways.

Don't let the facts get in your way. And I find it funny how other airline's employees are coming over to this board and they are encouraging workers on how to vote and to hasten the demise of US Airways while Nero is fiddiling and their own houses are burning down.

US Airways also closed on exit facilities that provide the company with $1.24 billion in liquidity, including a $240 million equity investment from the Retirement Systems of Alabama Holdings LLC (RSA), and a $1 billion loan - $900 million of which is guaranteed by the Air Transportation Stabilization Board (ATSB). The remaining $100 million of at risk funds are provided by RSA ($75 million) and Bank of America N.A. ($25 million). All funds were received today. The company repaid RSA $372 million owed on the debtor-in-possession facility, and also paid RSA $9.4 million of administrative rent, and paid structuring, loan syndication, collateral agent, loan administration and professional fees and expenses totaling approximately $48 million.

 

[goingboeing]

Please show the board where any tax dollars are involved with the loan.

The funds are loaned to US Airways by private banks, not one cent of tax payer's money is loaned to US Airways.

Don't let the facts get in your way.  And I find it funny how other airline's employees are coming over to this board and they are encouraging workers on how to vote and to hasten the demise of US Airways while Nero is fiddiling and their own houses are burning down.

[post="239508"][/post]​

Who pays the PRIVATE banks if USAir cannot or does not pay back the loans?
The American taxpayer!

In case you haven't read my recent postings I've stated that any airline[that includes AA] does not deserve to be continously rewarded for incompetent mismangement.It is disgraceful that AA management is losing a Billion dollars a year and not taking drastic measures to correct the problems.
Rewarding INCOMPETENCE in a free market economy is a BAD thing to do and needs to stop!

 

[700UW]

Wrong once again, the loans are secured beyond what is owed by US Airways' assets, if the US defaults, the assets become property of the ATSB and they get sold to cover any part of the portion that is unpaid.

Don't let the facts get in your way, US has given the ATSB $1.4 billion in assets pledged as collateral for a $900 million dollar loan guarantee.

And I am still waiting for your answer to explain how tax dollars were give to US Airways for the loan.

Do you know the difference between a loan and a loan guarantee?

Apparently not from your postings.

And US has all ready paid down over $200 million on the loan.

Don't see any mention of AA in your previous post:

(goingboeing @ Jan 15 2005, 05:44 PM)
Another example of taxpayer money being given to irresponsible people[USAir management]

 

[goingboeing]

Where do you think the ATSB got their money from?

 

[700UW]

The ATSB has not loaned any airline money.

Can you understand what the difference between a loan gaurantee and a loan is?

The ATSB "cosigned" the note, they did not loan any tax money to any airline involved with the program.

From the ATSB Web Page:

Air Transportation Stabilization Board

MISSION
On September 22, 2001, President Bush signed into law the Air Transportation Safety and System Stabilization Act ("Act") (Public Law 107-42). The Act establishes the Air Transportation Stabilization Board ("Board"). The Board may issue up to $10 billion in Federal credit instruments, e.g. (loan guarantees).

Loan Guarantees
The purpose of the guarantees issued by the Board is to compensate air carriers for losses incurred as a result of the terrorist attacks on the United States that occurred on September 11, 2001.

Before entering into an agreement to issue a guarantee, the Board must determine that:

The obligor is an air carrier for which credit is not reasonably available at the time of the transaction; the intended obligation is prudently incurred; and such agreement is a necessary part of maintaining a safe, efficient and viable commercial aviation system in the United States.

So once again I am asking you to provide the board with factual information the the US Government loaned US Airways or any other airline tax dollars in the ATSB backed loans.

 

[uafa21]

The loans are guaranteed by the Government. The loan does have collateral for coverage. The big question mark, Is the collateral really worth what will cover the loan? What collateral did U pledge to cover the loan? How fast can it be sold in a fire sale?

The reason the atsb granted the extension is because they did not want to be the reason for U's demise. If things haven't turned for U by 6/30 then look out.

 

[700UW]

The majority of the collateral is the slots at LGA and DCA, and I believe some 330s are also.

And the slots at LGA and DCA will be snapped up in a heartbeat.

 

[Us/boston]

The loans are guaranteed by the Government. The loan does have collateral for coverage. The big question mark, Is the collateral really worth what will cover the loan? What collateral did U pledge to cover the loan? How fast can it be sold in a fire sale?

The reason the atsb granted the extension is because they did not want to be the reason for U's demise. If things haven't turned for U by 6/30 then look out.

[post="239519"][/post]​

I believe the reason U got the extention is because the government thinks that the industry has to change. I believe they think U is doing what has to be done and they want U to succeed. If U survives other airlines will make the same changes and stablize the industry. If U fails then none of the other Legacy airline employees will ever agree to changes and most airlines will fail leaving those that could hold out the longest at the end. These surviving airlines will most likely be a mess from the fight and the US air travel systems will be in trouble. You might say that the true LCC will pick up the slack from the failed Legacy carriers but the LCC business models do not allow for extensive service to small citys with little revenue. They need some kind of Hybrid just like U is becoming. They need most of the Legacy carriers intact but just better able to compete with the LCC. I now believe U will survive.

 

[deano]

I believe the reason U got the extention is because the government thinks that the industry has to change. I believe they think U is doing what has to be done and they want U to succeed. If U survives other airlines will make the same changes and stablize the industry. If U fails then none of the other Legacy airline employees will ever agree to changes and most airlines will fail leaving those that could hold out the longest at the end. These surviving airlines will most likely be a mess from the fight and the US air travel systems will be in trouble. You might say that the true LCC will pick up the slack from the failed Legacy carriers but the LCC business models do not allow for extensive service to small citys with little revenue. They need some kind of Hybrid just like U is becoming. They need most of the Legacy carriers intact but just better able to compete with the LCC. I now believe U will survive.

[post="239530"][/post]​

I feel U should fail if for no other reason the fact U screwed its employees beyond belief. If U goes away it will send a message to corporate America that these kinds of tactics will not work. If U does survive airline employees will learn how third world workers live and airlines executives the likes of Glass will insist employee genuflect when near him and must never make eye contact with him least you perish instantly.

The insanity of corporate tyranny must end some place and I believe it should end with U's demise.

I know the public loathes CCY and hopefully it’s enough to place the final nail in U's coffin.

Am I bitter? Nope, I just can't stand what U's executives get away with the GOP's nod.

 

[Us/boston]

The insanity of corporate tyranny must end some place and I believe it should end with U's demise.

I know the public loathes CCY and hopefully it’s enough to place the final nail in U's coffin.

Am I bitter? Nope, I just can't stand what U's executives get away with the GOP's nod.

[post="239532"][/post]​

[/quote]Yes U employees got screwed. We did the best we could. We yelled and screamed and pleaded and in the end it did no good. Yes we caved under pressure. We pass the torch to DAL and AA. When the time comes for you to fight maybe you will do better. Now that it looks like U will survive AA or NW might want to get your wallet out and buy it before it does more damage. You can keep it seperate and run it like Song or Ted. Don't forget at one time Coke could have purchased Pepsi for next to nothing and noone thought Kmart would ever buy Sears one year after getting out of Bankruptcy.

 

[Walmartgreeter]

If U survives other airlines will make the same changes and stablize the industry. If U fails then none of the other Legacy airline employees will ever agree to changes and most airlines will fail leaving those that could hold out the longest at the end. These surviving airlines will most likely be a mess from the fight and the US air travel systems will be in trouble.

Good post. I am not sure the government is smart enough to actually be thinking that....but that IS what will happen. If U fails, after all has been given and taken...then, indeed, why would any Legacy carrier left try the same thing. Best. Greeter.