Us Airways Obtains Second $125 Million

[airbiiguy]

Does Shuttle America have anything to do with all this? I know Wexford owns them. It was great finally getting rid of SA. I hope they wont be back.

 

[BoeingBoy]

No, but USA320 posted something interesting on that point. Without going back and finding the quote, it was basically that the AWAC deal kept U from violating the ATSB cash requirement for Feb 28.

Of course, you have to ignore the fact that there was no minimum cash requirement for Feb 28 - only Feb 25 & Mar 4.

[post="255754"][/post]​

Ok, went back and looked up the numbers....

Jan 31 cash - $543,063,000
Feb 25 requirement - $371,000,000
Mar 04 requirement - $325,000,000

To reach the limits for the period around the end of Feb would mean a Feb cash burn of between $172,060,000 and $218,060,000. Of course, to violate those limits but for the AWAC cash would mean an even higher burn.

FWIW, $325 million is as low as the limit gets. The requirement is $325 million on Mar 4, 11, 18, and again on Apr 1 (April Fools day).

Jim

 

[mweiss]

Ya know, I'd be interested in any correlation analysis between the cash-on-hand requirements and fare sales.

I'm sure Jim knows where I'm going with this. 🙂

 

[BoeingBoy]

I think so but have no idea where to get that kind of info - I assume you'd need cash on hand data (daily preferably) plus those things you mentioned.

Jim

 

[ClueByFour]

13 Emb-170's - at least $20 million each for a total of $260 million (list price probably closer to $30 mil).

[post="255687"][/post]​

Does US actually own these, or are they just reducing lease payments by re-assigning the leases to Republic?

 

[BoeingBoy]

Does US actually own these, or are they just reducing lease payments by re-assigning the leases to Republic?

[post="255859"][/post]​

Both. 13 are owned (and mortgaged) and 15 are leased from GECAS.

Jim

 

[USA320Pilot]

According to the Pittsburgh Post-Gazette on March 5, US Airways Chief Executive Officer Bruce Lakefield, in his weekly telephone message to employees, said the company had enough cash on hand last week to exceed the $325 million needed to keep its bankruptcy financing intact, but the $75 million it received last Tuesday from an investment group led by Air Wisconsin Airlines gave it an "ample cushion." Early March is typically the airline's lowest point for cash. Air Wisconsin's investment, which will eventually total $125 million, "cannot be underestimated," he said. It is "a cornerstone from which we can attract additional financing."

Regards,

USA320Pilot

 

[BoeingBoy]

The important point here is that the company can still spend money and meet its obligations, but it’s no secret the Eastshore/Air Wisconsin DIP financing was needed to not violate the ATSB’s February 28 unrestricted cash requirement.

[post="255291"][/post]​

"Regards"

Jim

 

[TheLarkAscending]

"Regards"

Jim

[post="255885"][/post]​

Fish in a barrel at 11. 😉

 

[funguy2]

13 Emb-170's - at least $20 million each for a total of $260 million (list price probably closer to $30 mil).
Simulator - probably worth as much as 1 airplane - say another $20 million minimum.
DCA & LGA slots - at only $1 million each that's another $137 million.

According to Republic/CHQ conference call... They are paying $52mil for the slots... That means $58mil for 13 aircraft and the simulator, or about $4.25mil per aircraft/simulator... So that means one of a few things is happening:

1. New Airplane depreciation rivals New Automobile depreciation
2. EMB-170's don't really cost $20mil
3. CHQ/Republic is getting one helluva deal.

I am betting on #3.

 

[whlinder]

3. CHQ/Republic is getting one helluva deal.

I am betting on #3.

[post="255904"][/post]​

Maybe that is why the industry is 'spinning': they are missing out on the awesome deal that they could have had.

BTW, your franchising post makes a lot of sense. 'Franchising' might just be a good term to define what is starting to happen with the industry ownership agreements.

 

[airbiiguy]

I would say depreciation and the fact that they need the liquidity at this time combine to make one hell of a deal for Wexford.

 

[fr8tmastr]

Maybe that is why the industry is 'spinning': they are missing out on the awesome deal that they could have had.

BTW, your franchising post makes a lot of sense.  'Franchising' might just be a good term to define what is starting to happen with the industry ownership agreements.

[post="255906"][/post]​

Funny you should mention franchising Airways. Check out this post from October of 2003 from TBONEJ4J.


With all respect, take your head out of the sand, and don't think US Airways is reducing ASM's.

US Airways, one of the four wholly owned subsidiaries of US Air Group may have reduced ASMs by 1.7%. Two others, ALG and PDT have reduced ASMs in the double digits.

Now take a look at the increases in ASMs for Mesa and Chautauqua, who thanks to the restructuring agreement and LOA 83 are the REAL US Airways.

Mesa's increase in ASMs since the period last year is of the order of 60%, not sure of CHQ but it should be well up there.

US Airways itself is losing ASMs, but the operation as a whole is not reducing flying, it's transferring it and growing it at Mesa and Chautauqua.

But that's what a Franchise is all about, isn't it.

Please take heads out of the sand, look around, and realise that those piddling little outsource issues, be it maintenance or flying, are the insidious disease that will end it all.

Keep it all in the Group and grow. Let it go and say Bye Bye US Airways - the Airline. Welcome US Airways the Franchise.

 

[funguy2]

Maybe that's where I got the idea!

I probably would not have even thought it was possible until now...

 

[BoeingBoy]

According to Republic/CHQ conference call... They are paying $52mil for the slots... That means $58mil for 13 aircraft and the simulator, or about $4.25mil per aircraft/simulator... So that means one of a few things is happening:

1. New Airplane depreciation rivals New Automobile depreciation
2. EMB-170's don't really cost $20mil
3. CHQ/Republic is getting one helluva deal.

I am betting on #3.

[post="255904"][/post]​

funguy,

I'd vote for #3 also, but with one small potential exception that there's no info on. The 13 airplanes are mortgaged (ETC's, EETC's, whatever). If I heard right on the conference call, U must deliver the planes with clear titles and no liens. What I don't know is if that means the mortgage arrangements stay intact and transfer to Republic or if Republic gets the planes free of debt. If the former, the deal isn't as good for Republic as it appears on first blush (although not necessarily bad - depends on amount of mortgage vs what it would cost them to acquire a new plane from Embraer).

Jim