US Airways wants flexibility on aircraft leases

C

chipmunn

Guest
There are reports the Seabury Group is becoming very aggressive, maybe to aggressive, with the lease company's. I have a suspicion this is about removing turboprop aircraft as RJs come on line. I suspect we will see the gradual liquidation of the wholly owned aircraft and wholly owned company's, which could be folded into MidAtlantic Airways.

Chip
 
having a hard time with new technology..
siegel wants to cut another 150 a/c
by: cubfan02us 09/10/02 07:33 pm
Msg: 44133 of 44133

Thanks for the givebacks you chumps...

thanks for the 6 mil for my boys...


you know this is gonna be labor friendly...

I think I'll cut another 150 jets,it's plan
C,we shrink to the size of jet blue,and then
we can be profitable..

These guys are a joke...

http://biz.yahoo.com/rf/020910/airlines_us...s_leases_1.html
 
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US Airways wants flexibility on aircraft leases
WASHINGTON, Sept 10 (Reuters) - US Airways wants broad flexibility to reject or renegotiate additional aircraft leases as it seeks to reorganize under bankruptcy protection, the airline said on Tuesday.
In papers recently filed in federal court in Alexandria, Va., the airline has asked a bankruptcy judge to pre-approve a mix of up to 150 aircraft and engine leases that could be rejected down the road.
The airline, in its court filing, did not identify how many, if any, new leased on the list that it might want to terminate or change. David Castelveter, a company spokesman, said no decision has been made on that question.
Consistent with our fleet plan, we are continuing to review obligations on all our aircraft, Castelveter said.
The bankruptcy court has already approved requests by US Airways to reject 67 aircraft and engine leases, a move that will save the company hundreds of millions of dollars. Those planes are older models sitting idle in the desert.
The latest motion includes jet aircraft and turbo-props that are currently operated by US Airways and its subsidiaries.
The airline is trying to cut costs by $1.3 billion annually in its drive to reorganize and qualify for a $900 million federal loan guarantee.
 
Please read the artical before posting half false information. 150 airplane ENGINES and aircraft! Gees...this is how rumors get started.
 
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On 9/10/2002 7:16:20 PM chipmunn wrote:

There are reports the Seabury Group is becoming very aggressive, maybe to aggressive, with the lease company's. I have a suspicion this is about removing turboprop aircraft as RJs come on line. I suspect we will see the gradual liquidation of the "wholly owned" aircraft and "wholly owned" company's, which could be folded into MidAtlantic Airways.

Chip
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If there is suppose to be some flow through to return furloughed mainline employees who are at mid-atlantic to mainline taking for granted U can have some growth over the next few years .. won't this cause some kind of employee problems at mid-atlantic...if they liquidate the wholly owned
 
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The ALPA restructuring agreement prevents the company from going below 245 mainline aircraft in bankruptcy and 275 outside of bankruptcy. With this in mind let’s examine what we know:

1. At the end of this year, US was scheduled to operate 315 aircraft, but that has been changed with three developments.

2. US cancelled the four remaining A-321 deliveries.

3. US announced it would remove 57 parked (not included in 315 fleet count) and 32 active aircraft, with a target fleet of 279 aircraft. The 32 aircraft in question were 3 B-757s and 29 B-737s. Last week the bankruptcy court approved 10 of 32 aircraft be returned to the lessor, with the disposition of the other 22 aircraft unresolved.

4. From the announced fleet reduction to 279 aircraft, US can only reduce its by fleet another 34 mainline aircraft while in bankruptcy, but once out of bankruptcy the 275 minimum fleet count should still apply per the ALPA contract.

5. Dave Siegel has told employees at road show meetings in 3 to 5 years US will be out of the turboprop business.

6. US has said it anticipates ordering up to 500 RJs, with 200 firm orders and 300 options. The order will likely include the EMB-170 with six first class seats and the EMB-175 with eight first class seats, both with forward lavatories and wing mounted engines.

7. Rueters said, “the airline has asked a bankruptcy judge to pre-approve a mix of up to 150 aircraft and engine leases that could be rejected down the road.â€￾

8. The Seabury Group is a investment banking consulting firm lead by John Lutz. Lutz has been coordinating the lease company concessions in an attempt to lower lease rates to current market conditions. For example, the US B-737s are said to have a monthly lease expense of $250,000 to $270,000 per month based on interest rates in the 11 percent area, whereas with today’s fall in interest rates to about 5.5 percent, a used B-737 could obtained for about $100,000 per month. The Seabury Group is leading the charge to help US operate a fleet with a lower cost to contribute to driving down the airline’s CASM post emergence. The company is using the threat of returning aircraft through the 60-day bankruptcy process as leverage on the lease companies to “play ballâ€￾.

9. Reuters said, “The latest motion includes jet aircraft and turbo-props that are currently operated by US Airways and its subsidiaries,â€￾ which supports the RJ upgrade program and the company’s effort to lower its aircraft ownership/payment costs.

10. US was only able to obtain 85 percent of its target labor cost reduction; therefore, management is attempting to obtain greater vendor, creditor, and lessor concessions to qualify for the $900 million federal loan guarantee, which is dependent upon a $1.2 to $1.3 billion annual cost reduction.

11. I suspect the “wholly-ownedsâ€￾ will operate RJ aircraft and the employees and equipment can be merged into MidAtlantic (MDA). The new ALPA mainline pilot contract provides for “wholly ownedâ€￾ pilots to have a flow through to MDA. The pilot contract says the order of pilots on the MDA Pilots’ System Seniority List will be as follows:

 US pilots in order of US pilot seniority.

 Pilots from Participating “wholly-ownedâ€￾ carriers in order of their positions on the “wholly-ownedâ€￾ pilots seniority list.

 New-hire pilots in order of their dates of hire as MDA pilots.

 NO period of probation for US and “wholly-ownedâ€￾ pilots.

Chip
 
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On 9/10/2002 10:14:35 PM chipmunn wrote:

The ALPA restructuring agreement prevents the company from going below 245 mainline aircraft in bankruptcy and 275 outside of bankruptcy. With this in mind let’s examine what we know:

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I'm sure the pilot group will not have a problem agreeing to go below 245 aircraft, in the future, if it is for the survival of the company. As has been preached repeatedly to the IAM and CWA, one MUST agree to whatever the company seeks, if it is to survive. After all it's for the good of your fellow employees.

U ALPA did give up their last two unjustified parity plus raises, one of which I believe they had not yet received. This, along with other creative math, made possible meeting the 85% goal. For this and sacrificing their young, they got a seat on the board, profit sharing, the promise of jobs at the RJ operators (even if they have to furlough their own to accommodate the U pilots), etc. Along with this, some also seem to think they were awarded the power to dictate to other employee groups how they should think and vote!
 
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OldpropGuy:

OldpropGuy said: U ALPA did give up their last two unjustified parity plus raises, one of which I believe they had not yet received. This, along with other creative math, made possible meeting the 85% goal.

Chip comments: The pilot group received all of the parity increases a few months before the restructuring agreement was ratified. I believe there are 47,000 opinions, from active and furloughed employees what is fair, but the fact is the pilot group makes up 10 percent of the employees, 30 percent of the labor expense, and contributed 60 percent of the givebacks.

I'm not throwing stones, but 90 percent of the employees, who make up 70 percent of the labor expense, will contribute 40 percent of the givebacks.

I recognize why there is employee anger. I am mad too. But there is nothing we can do about the past. All we can do is work together to rebuild the company to provide a better opportunity in the future. The concessions are required to obtain fresh capital and without these funds, there will be no reason to debate these issues.

Chip
 
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On 9/10/2002 10:14:35 PM chipmunn wrote:


11. I suspect the “wholly-owneds” will operate RJ aircraft and the employees and equipment can be merged into MidAtlantic (MDA). The new ALPA mainline pilot contract provides for “wholly owned” pilots to have a flow through to MDA. The pilot contract says the order of pilots on the MDA Pilots’ System Seniority List will be as follows:


Chip

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Hey Chip can you get the facts on this ,whether wholly-owned employees will be merged into mid-atlantic...so we wholly-owned employees will know where we stand...thank you
 
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Motnot:

There comes a point that the three-hub system must have sufficent aircraft to operate and be profitable. I suspect with the recent major shcedule change and the comments by Ben Baldanza, we are close to that point.

There is much in play here with the company having a one-time shot to get the lease payments down to maraket rates. In addition, the turboprops are a target and the company intends to replace them, per the article above and previous corporate comments.

Chip
 
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en-51:

To my knowledge only the ALPA agreement provides MDA opportunities for other wholly-owned labor groups, but I believe Dave is a good man who wants to protect every US Group employee position, if possible.

There is to much in play here to know exactly how the future wholly-owned issue will be resolved. However, I believe it's reasonable for you to approach your management team or directly to Dave for an answer to your question.

Chip
 
What's to stop the company from asking the judge to throw out the restructured ALPA deal that prevents it from a fleet smaller than 245, if management decides that's what is needed?

As you say, Chip, the company is batting 1.000 in bankruptcy court.

I'm not saying it will happen, but the company will do what it has to do, and if that one provision of the deal turns out to be trouble, don't be surprised if they go to have it thrown out.
 
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