US Airways Will Not Take Delivery of CRJ-705 Aircraft; Mesa Airlines to Operate CRJ-700 as US Airway

[LavMan]

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On 7/9/2003 2:37:47 PM Chip Munn wrote:


Lav,

The CRJ-700s will not be financed or paid for by US Airways. The delivery positions are being tranferred to Mesa, therefore, I do not understand your comment about our 5%, where ALPA provided the largest amount of wage deferral.

In regard to the business plan, this decision will reduce US Airways'' long-term debt and debt service, but the profits will be split with Mesa.

Best regards,

Chip

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On 7/10/2003 1:36:39 PM CAREFUL wrote:

from the kansas city star....


Macdonald said the net effect is that US Airways remains a Bombardier customer, but instead of purchasing the 75-seat regional jet, it would purchase 70-seat aircraft and sublease them to Mesa.


Here is the evidence that US Airways will be paying for the jets

 

[USA320Pilot]

Lavman:

Chip said: "The CRJ-700s will not be financed or paid for by US Airways. This decision will reduce US Airways' long-term debt and debt service, but the profits will be split with Mesa."

Lavman said: "All the unions should take the company to court, using our concessions and the 5% to buy MESA jets, this is ludicrous."
US Airways spokesman David Castelveter said: "The airline will be "renegotiating the terms of the Bombardier deal to take the 70-seat planes rather than the bigger 705s."

Bombardier spokesman John Paul Macdonald said: "The net effect is that US Airways remains a Bombardier customer, but instead of purchasing the 75-seat regional jet, it would purchase 70-seat aircraft and sublease them to Mesa."

Chip asks Lavman: Lav, with Mesa subleasing the RJs, who is paying the long-term EETC debt? Furthermore, what is the net effect to US Airways and how much comes out of the corporate treasury to finance the CRJ-700 deal? In addition, can you tell me where it specifically says the company is "using our concessions and the 5% to buy Mesa jets?" Finally, can you tell me the definition of a sublease?

Chip comments: From a corporate perspective, the decision to operate the CRJ-700 at Mesa Airlines will have little effect on US Airways. Regardless of how the aircraft are initially acquired, the CRJ-700 will ultimately be paid for by Mesa Airlines and US Airways will have lower debt and debt service, thus increasing cash flow during this economic down time. During previous RJ discussions, management stressed the benefit of affiliate agreements because it prevented US Airways’ capital diversion. This decision will leave more capital available for general corporate purposes that the company can use for MidAtlantic expansion, which will provide a better product than the CRJ-705 -- the EMB-170/175.
Best regards,

Chip

 

[OldpropGuy]

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On 7/10/2003 1:36:39 PM CAREFUL wrote:

from the kansas city star....


Macdonald said the net effect is that US Airways remains a Bombardier customer, but instead of purchasing the 75-seat regional jet, it would purchase 70-seat aircraft and sublease them to Mesa.



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CAREFUL,

Can you provide a link to this article? I did a search on the Kansas City Star site and could not find anything on it.

Thanks.

 

[DCAflyer]

PineyBob said: My point is the company did know! they never bothered to let you know. Are they playing fast and loose with the rules? Of course they are! Why? because they can. This company now has some value to an investor or suitor. Truthfully in order to sell out or operate this airline he honestly doesn't need your support. Thousands are laid off in the industry. The law of supply and demand takes over. Union membership in private enterprise is declining sharply. Public opinion on unions is generally negative. He could sell the airlines assets and recoup RSA & ATSB's investment in a New York minute and leave all of you out on the street.. Why would he care about the toothless tigers known as unions. He's doing the old "I Triple Dog Dare YA" and you're afraid to challenge him because deep down you know he sits in the power seat.


DCAflyer replies: Bob, if the company knew it was planning to add non-scoped aircraft, it was incumbent on the company to disclose that in negotiations... NOT finalize the contract, sign, and then try to slip larger aircraft into the fold. Since you profess to be a businessman, I am sure you know that every contract carries with it an implied covenant of good faith and fair dealing. Simply said, that means you have to act honorably when you sign a contract. You can't sign knowing you aren't going to adhere to its terms. Did the company act in good faith? Absolutely not. Did it deal fairly with the pilots (or any other work group for that matter)? Absolutely not! It didn't do it in the first round of concessions, it didn't do it with the "gun to our heads" second round of negotiations. It didn't do it when it took the five percent and especially now that it continues to take the five percent (since the spirit of the five percent clause was based on the presumption that revenue would fall during a war, yet it has not done that). The company has shown no signs that it intends to be honorable in the future.

 

[TheLarkAscending]

[url="http://ap.tbo.com/ap/breaking/MGAR1KY4YHD.html"]http://ap.tbo.com/ap/breaking/MGAR1KY4YHD.html[/URL]

[url="http://seattlepi.nwsource.com/business/apbiz_story.asp?category=1310&slug=US%20Airways%20Bombardier"]http://seattlepi.nwsource.com/business/apb...ys%20Bombardier[/URL]

[url="http://www.washingtonpost.com/wp-dyn/articles/A35677-2003Jul9.html"]http://www.washingtonpost.com/wp-dyn/artic...7-2003Jul9.html[/URL]

[url="http://www.newsday.com/business/nationworld/wire/sns-ap-us-airways-bombardier,0,3848760.story?coll=sns-ap-business-headlines"]http://www.newsday.com/business/nationworl...iness-headlines[/URL]

The quote is from an Associated Press article and can be read in various publications, some are linked above.

 

[flyin2low]

From: "jonathano1999" <jonathan.ornstein@m...>
Date: Thu Jul 10, 2003 2:04 pm
Subject: Re: MESA gets US Airways CRJ700s
---The aircraft were financed by USAIR (with help from GE) in the
bankruptcy process. The aircraft need to be delivered by DECember
2004.

 

[ual06]

Folks, I don't mean to rain on anybody's parade; but, there is one aspect of this I have not seen discussed at all. That is, can the Air Traffic Control system in the Northeast United States handle all of these new RJ's?

Also, what will their altitudes and cruise speed be? I use to fly a "faster" bird that would end up making "s" turns enroute to stay behind a slower bird. Such cannot help efficiencies in the Boeing and Airbus fleets.

 

[michael707767]

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On 7/10/2003 12:24:16 PM N628AU wrote:


I know DL has the 777 flying now, but parking them temporarily forced ALPA to come to the table.

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The 777 was never parked at DAL. Parking them was threatoned, but by the union, not the company. The DAL pilots had the right to refuse to fly any new aircraft after six months if no pay scale was agreed too. Plans were being made by the union to park them. Ultimately a deal was made and the planes were never parked. In the new contract for the DAL pilots, the provision allowing them to refuse to fly an aircraft was negotiated out and replaced by a mandatory arbitration system if a disagreement happens on new aircraft.

 

[USA320Pilot]

Lavman:

Lavman, in his July 11 letter to US Airways’ pilots, ALPA MEC Chairman Bill Pollock wrote, "Since ALPA required US Airways to bring its aircraft order into compliance with the scope provisions in the July 2002 Restructuring Agreement, the Company announced on July 9 that it will not be taking delivery of the CRJ-900 Series 705 aircraft. These aircraft are to be converted to the 70-seat CRJ-700s, which do comply with our scope provisions, and diverted to Mesa Airlines instead of a wholly-owned carrier such as PSA. This means that US Airways will not be paying the leases for these aircraft."

Best regards,

Chip

 

[luvn737s]

Actually, the costs of an RJ are closer to $0.25/mi.

 

[Dea Certe]

ual06,

I too have wondered where all the airspace is going to come from with God-only-knows how many RJ''s, SRJ''s and other aircraft in the air and on the ground.

Can we again look forward to the long lines waiting for take-off or circle forever waiting for a landing slot?

Yikes.

Dea

 

[luvn737s]

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On 7/10/2003 2:24:54 AM lownslow wrote:

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On 7/9/2003 8:32:21 PM LavMan wrote:


Bluestreak, read my previous post, US Airways spokesman even say US is paying for them.

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Then Mesa will be operating these aircraft, but you''d better believe that they''re not getting them for free (if they were, then the managers deciding this would deserve to be relegated to flipping burgers for life).

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The Mesa/ HP agreement is exactly that. Mesa gets them for free because HP pays the lease payments. The mainline takes all the risk and Mesa is the only one who has ever seen a profit.
You''d better believe Bill Franke ain''t flippin no burgers.

 

[DHG750R]

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On 7/11/2003 422 PM ual06 wrote:

Folks, I don''t mean to rain on anybody''s parade; but, there is one aspect of this I have not seen discussed at all. That is, can the Air Traffic Control system in the Northeast United States handle all of these new RJ''s?

Also, what will their altitudes and cruise speed be? I use to fly a "faster" bird that would end up making "s" turns enroute to stay behind a slower bird. Such cannot help efficiencies in the Boeing and Airbus fleets.

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Anyone remember the failed experiment of unrestricted slots at LGA for so-called new entrants and RJ''s under70 seats ? During the best weather days , there were taxi delays of an hour or better regularly , inbound groundstops due to gridlock ... You loose the small benefit of a turboprop , such as land and holdshort of intersecting runways , closer separation for wake , etc . each of these "jets" are treated as a A320 , 727 are. However they are not always equal . For example , US Shuttle A319/A320''s regualrly get slowed while entrail of the American Eagle RJ''s on the same route. while the chug along at 20-30kts slower than the mainline jets. The Dornier328 is an even bigger offender . It''s sloooww.

 

[CAREFUL]

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On 7/11/2003 8:24:17 AM OldpropGuy wrote:

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On 7/10/2003 1:36:39 PM CAREFUL wrote:

from the kansas city star....


Macdonald said the net effect is that US Airways remains a Bombardier customer, but instead of purchasing the 75-seat regional jet, it would purchase 70-seat aircraft and sublease them to Mesa.



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CAREFUL,

Can you provide a link to this article? I did a search on the Kansas City Star site and could not find anything on it.

Thanks.


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[url="http://www.kansascity.com/mld/kansascity/business/6268606.htm"]http://www.kansascity.com/mld/kansascity/b...ess/6268606.htm[/URL]

 

[LavMan]

Chip your information is not accurate.


Macdonald said the net effect is that US Airways remains a Bombardier customer, but instead of purchasing the 75-seat regional jet, it would purchase 70-seat aircraft and sublease them to Mesa.

US Airways is purchasing the aircraft.