Us Airways Seeks New Cuts From Workers

[USA320Pilot]

US Airways Seeks New Cuts From Workers

Company again holding discussions with the government about once again relaxing the terms of its $900 million guaranteed-loan package to stave off default

See Story

Respectfully,

USA320Pilot

 

[USA320Pilot]

"Emphasizing the need to act quickly, Mr. Lakefield added, "Without a lower cost structure, US Airways could just run out of steam sometime next year." He gave no specifics about what that meant.

But the airline will face financial crises long before then. People briefed on the talks with the stabilization board said that they centered on the airline's earnings before interest, taxes, depreciation and amortization, a measure of cash flow from operations. The board's staff is concerned that US Airways did not do well enough in the second quarter to meet its target for that figure," the New York Times reported.

Respectfully,

USA320Pilot

 

[insp89]

US Airways Seeks New Cuts From Workers

Company again holding discussions with the government about once again relaxing the terms of its $900 million guaranteed-loan package to stave off default

See Story

Respectfully,

USA320Pilot

I read the story, Noticed the author finally got around mentioning the $250 Million Dollar Prepayment made to the ATSB in the first quarter...[900 mil - 250 mil = 650 mil..] The way I see it, The ATSB is now backing loans for Usairways for $650 mil., NOT $ 900 million. Is this correct ??

 

[usairways_vote_NO]

"Emphasizing the need to act quickly, Mr. Lakefield added, "Without a lower cost structure, US Airways could just run out of steam sometime next year." He gave no specifics about what that meant.

Don't forget this quote

Representatives of the airline's flight attendants have said they will meet with the company, but the International Association of Machinists and Aerospace Workers, representing mechanics, has steadfastly refused to reopen its contract.

 

[Walmartgreeter]

"Emphasizing the need to act quickly, Mr. Lakefield added, "Without a lower cost structure, US Airways could just run out of steam sometime next year."

WOW. Great news. Now the company is worried about "NEXT year." I guess that is why they are negociating in such bad faith with their pilots! Happy days are here again...NEXT year, for gosh sakes this is fantastic! ) greeter.

 

[BoeingBoy]

Insp89,

Almost correct. The original loan was for $1 billion, of which the government backed $900 million. The $250 million prepayment obviously reduced the outstanding loan to $750 million. Additionally, the sale of U's interest in Hotwire netted $30 million, of which 75% was also used to prepay the loan (per the revised ATSB covenants).

Jim

 

[USA320Pilot]

If my memory serves me correctly, the guaranteed portion of the loan now stands at $673 million because part of the $250 million payment went to pay off part of the "at risk" portion of the loans too, which were provided by RSA and Bank of America.

As I earlier reported, US Airways has hired three firms to work on a pre-packaged bankruptcy filing, which could include new terms with the ATSB inside of bankruptcy.

John Lutz and the Seabury Group and FTI Consulting are working on financial matters and the company's long-time law firm of Skadden Arps has been replaced with bankruptcy specialists from the law firm of Arnold and Porter.

The finacial and legal advisors are working on two plans: keeping the loan guarantee and the security (stock) intact, so the company will not need debtor-in-possession financing, if necessary.

It's too early to tell how this will play out, but according to today's Pittsburgh Tribune-Reivew, "US Airways could break even in the recently completed second quarter, Chief Executive Bruce Lakefield said in a message to employees late Thursday. But he continued the drumbeat that the airline won't survive without further cost cuts -- particularly from its labor groups."

Respectfully,

USA320Pilot

 

[usairways_vote_NO]

But he continued the drumbeat that the airline won't survive without further cost cuts -- particularly from its labor groups.

And leave it for you to drum right along with it. Don't forget the smoke signals they sending out too. Time to break out the drum and smoke too.

 

[AP Tech]

What about our "highly prized" management team and their givebacks???? Oh...I keep forgetting we must give them "retention bonus's" so as not to lose any of them!!!!!

 

[insp89]

If I remember correctly, Didn't the company report " breakeven " cash flow in the FIRST quarter ??

 

[delldude]

If my memory serves me correctly, the guaranteed portion of the loan now stands at $673 million because part of the $250 million payment went to pay off part of the "at risk" portion of the loans too, which were provided by RSA and Bank of America.

As I earlier reported, US Airways has hired three firms to work on a pre-packaged bankruptcy filing, which could include new terms with the ATSB inside of bankruptcy.

John Lutz and the Seabury Group and FTI Consulting are working on financial matters and the company's long-time law firm of Skadden Arps has been replaced with bankruptcy specialists from the law firm of Arnold and Porter.

The finacial and legal advisors are working on two plans: keeping the loan guarantee and the security (stock) intact, so the company will not need debtor-in-possession financing, if necessary.

It's too early to tell how this will play out, but according to today's Pittsburgh Tribune-Reivew, "US Airways could break even in the recently completed second quarter, Chief Executive Bruce Lakefield said in a message to employees late Thursday. But he continued the drumbeat that the airline won't survive without further cost cuts -- particularly from its labor groups."

Respectfully,

USA320Pilot

As I earlier reported, US Airways has hired three firms to work on a pre-packaged bankruptcy filing, which could include new terms with the ATSB inside of bankruptcy.

after what they did to UAL...i wouldn't get my hopes up too much...

 

[USA320Pilot]

Just one more point...

I now understand that a pre-packaged bankruptcy with airport/facility leases and labor as targets (with S.1113 and S.1114 motions) could take as little as 120 days with a Plan of Reorganization filled with the court shortly after the Chapter 11 filing. Apparently, the loan guarantees would continue to be paid and the company would be required to maintain mimum cash balance and EBITDAR requirements, to satisfy the board.

In addition, another option would be to reach new terms with the board based on new labor accords/projected savings, to prevent a bankruptcy filing.

By the way, who first reported on this website that US Airways was once again discussing new loan guarantee terms with the ATSB?

Respectfully,

USA320Pilot

 

[insp89]

Insp89,

Almost correct. The original loan was for $1 billion, of which the government backed $900 million. The $250 million prepayment obviously reduced the outstanding loan to $750 million. Additionally, the sale of U's interest in Hotwire netted $30 million, of which 75% was also used to prepay the loan (per the revised ATSB covenants).

Jim

Thank You Jim

 

[Walmartgreeter]

Just one more point...

I now understand that a pre-packaged bankruptcy with airport/facility leases and labor as targets (with S.1113 and S.1114 motions) could take as little as 120 days with a Plan of Reorganization filled with the court shortly after the Chpater 11 filing. Apparently, the loan guarantees would continue to be paid and the company would be required to maintain a mimum cash balance and EBITDAR requirements, to satisfy the board.

In addition, another option would be to reach new terms with the board based on new labor accords/projected savings, to prevent a bankruptcy filing.

By the way, who first reported on this website that US Airways was once again discussing new loan guarantee terms with the ATSB?

Respectfully,

USA320Pilot

Please point out to us all what would actually be accomplished in a Bk filing. What...the stiffing of current vendors and aircraft leasors? The possible court destruction of employee contracts? Maybe even the supposed bulletproof retirements of failures W and G would be a target. We can only hope. In my feeble opinon its Chapter 7 or nothing....Just what we need...another "quick" BK. Greeter.

 

[delldude]

By the way, who first reported on this website that US Airways was once again discussing new loan guarantee terms with the ATSB?