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

[USA320Pilot]

Lav:

I do not have the contracts in front of me nor do you, but I do believe ALPA MEC Chairman Bill Pollock. Specifically Pollock said, "This means that US Airways will not be paying the leases for these aircraft."
Furthermore, it was my understanding that 150 of the 170 RJs ordered all were leased and the other 20 have yet to obtain financing, per Siegel''s comments at the Merrill Lynch Global Transportation Conference. Siegel mde his comments in front of Wall Street and Pollock who is a member of the US Airways Board of Directors and has a fiduciary responsibility to provide accurate communications.
Moreover, can you tell me how you have more access to confidential financing agreements than two US Airways Board members?
Regardless, the issue is one of a "wet lease". By the way, you still haven''t shown me in any contract where the 5% wage deferral financed the RJs? Could you please be specific and show me these clauses because I have missed this point. Thanks.
Best regards,
Chip

 

[LavMan]

Chip Bill Pollock is not god and if you read every artilce or press release from US Airways, Mesa and Bombardier, the only difference that has changed is that they are substituting the 700s for the 705. Go back and read US Airways bought the planes from Bombardier, not GECAS. US Airways will own the planes not GECAS. Chip the planes are purchased not leased.

Can't accept the facts? As for the 5% it is being used to pay all the bills, so when they pay the bills for the RJs that 5% will be included.

From the Press release:

TORONTO, ONTARIO--Bombardier Aerospace today announced that it has signed a contract with US Airways of Arlington, Virginia for the sale of up to 275 Bombardier CRJ(i) aircraft, as follows: - 85 firm orders (60 firm orders for 50-seat Bombardier CRJ200(i)
and 25 firm orders for 75-seat Bombardier CRJ700(i) Series 705(i)
for a total value of $2.2 billion US ($3.3 billion Cdn.);

- 90 reconfirmable orders. A reconfirmable order has a scheduled
delivery date and provides the customer with the right to formally
cancel the order within a specific timeframe prior to the delivery
date; and

- 100 options which can be exercised across a mix of Bombardier
CRJ200 and CRJ700 models to provide US Airways with optimum
flexibility in determining its future seating capacity requirements.


This contract has a potential value of $7.0 billion US ($10.4 billion Cdn.).
The 85 firm orders include the transfer of 36 Bombardier CRJ firm orders currently held by GECAS (GE Capital Aviation Services) to US Airways. The net effect on the current firm order backlog will be an increase of 49 aircraft.
Deliveries are scheduled to commence in the fourth quarter of 2003 and continue through the second quarter of 2005.

From the Kansas City Star:


TORONTO - Bombardier Inc. said Wednesday it will still deliver the same number of regional aircraft to US Airways Group Inc., despite the airline's announcement of a cancellation.
"As far as we are concerned at Bombardier, the US Airways action (Wednesday) is transparent to our contract, there is no reduction to the order and the contract value remains the same," said John Paul Macdonald, a spokesman for Bombardier Aerospace.
Bombardier shares dipped suddenly late Wednesday when US Airways said it wouldn't be taking delivery of the 25 CRJ-705 regional jet aircraft ordered in May.
The airline said the cancellation was sparked by its inability to negotiate a deal with its pilots to fly the aircraft.
US Airways said that instead, it will contract with Mesa Air Group to fly at least 25, and perhaps as many as 55 70-seat regional jets under the US Airways Express name.
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.
The total contract value remains $2.4 billion. It includes options for another 190 additional aircraft, bringing the potential value to $7.5 billion.
The US Airways headline pushed Bombardier stock down by more than 5 percent initially although shares later recovered some ground.


Purchase:
1 : an act or instance of purchasing
2 : something obtained especially for a price in money or its equivalent

Purchasing:
1 a : archaic : GAIN, ACQUIRE b : to acquire (real estate) by means other than descent or inheritance c : to obtain by paying money or its equivalent.

 

[USA320Pilot]

Lav:

You''ve become really good and cut and pasting and using colors to emphasis your point. Regarding your continued discussion, you said the 5% deferral was paying for the CRJ-700s and US Airways was paying for Mesa RJs. Can you explain to me the term sublease, wet lease, and where the contract says the 5% pay deferral is paying for these jets?

Furthermore, can you tell me where two US Airways board members, who are required to approve such financing agreements are wrong?

Regardless, it appears that both the CRJ-705 and the Mesa CRJ-700 placement under the subleasee terms violate ALPA''s contract and the only place these jets can be flown is at a "wholly owned" airline with 100 percent of the seats occupied by furloughed US Airways pilots.

Best regards,

Chip

 

[Dea Certe]

Chip,

I am a very trusting person by nature. I used to believe the company told the truth. I don''t believe a word they say anymore. After what happened with the pilot pension deal, I''m surprised you give them much credence either. I''m pretty sure few employees do. Company spokesmen even refer to this industry being one of "fine print" as in hard to read or obscured.

While I enjoy keeping up with the news and appreciate links to copyrighted articles, the copy and paste style seems to be turning into some kind of male chest-thumping ritual. I think our dear PineyBob might call it a "pizzing contest"?



Dea

 

[av8or]

----------------
On 7/13/2003 1:27:07 PM Chip Munn wrote:


Lav:

*snip*

Regardless, it appears that both the CRJ-705 and the Mesa CRJ-700 placement under the subleasee terms violate ALPA''s contract and the only place these jets can be flown is at a "wholly owned" airline with 100 percent of the seats occupied by furloughed US Airways pilots.


Best regards,   


Chip

----------------​

hey chip, could you sound anymore dissapointed that the only place 70''s can go is at a "wholly owned" (quotes are yours not mine)? Rather than to help line the pockets of that scumbag Ornstein. Talk about a derisive attitude towards fellow employee''s.

 

[A320 Driver]

A320 Driver


GIVE IT BACK!!!!!

 

[N628AU]

----------------
On 7/13/2003 1:27:07 PM Chip Munn wrote:


Lav:

You''ve become really good and cut and pasting and using colors to emphasis your point. Regarding your continued discussion, you said the 5% deferral was paying for the CRJ-700s and US Airways was paying for Mesa RJs. Can you explain to me the term sublease, wet lease, and where the contract says the 5% pay deferral is paying for these jets?

Furthermore, can you tell me where two US Airways board members, who are required to approve such financing agreements are wrong?

Regardless, it appears that both the CRJ-705 and the Mesa CRJ-700 placement under the subleasee terms violate ALPA''s contract and the only place these jets can be flown is at a "wholly owned" airline with 100 percent of the seats occupied by furloughed US Airways pilots.

Best regards,

Chip

----------------
​

I think the difference here is that US is simply lining up financing for the jets. US was never going to "buy" them in the true sense of forking over cash and taking title on them. They were always probably going to be leased. Mesa has been having trouble financing aircraft lately, so US is probably simply doing the financial legwork, and letting Mesa fork over the monthly payments. Without seeing the actual financial contracts, none of us would knwo the details for sure.

I am curious as to why Chip has gone from this being a good move (lower debt on the balance sheet for US, etc.) to the point where we are talking contract violations again. I believe the latest working agreement between the company and ALPA allowed for operation of specifically the CRJ700 at affiliate carriers. Per Chip''s posting on July 10, 2003:


A. Up to 20 "Medium SJs" and up to 30 "Large SJs (CRJ-700 aircraft only) may be operated by Mesa Airlines or by any wholly owned subsidiary of Mesa Air Group or Mesa Airlines under terms agreed to between Mesa Air Group and the Association. Such aircraft shall be subject to the Jets For Jobs Protocal and must be placed into revenue operation no later than December 31, 2004.

B. Up to 25 "Large SJs" (CRJ-700 aircraft only), in addition to the 30 "Large SJs" authorized in Paragraph 2.A above, may be placed into revenue operation by Participating Affiliate carriers, provided that they are placed inot revenue service no later than December 31, 2004, and provided further that they are subject to the Jets for Jobs Protocol (Attachment B-3 of the Restructuring Agreement). The foregoing does not preculde the placement of Large SJs in MDA in accordance with Attachment B of the Restructuring Agreement as amended by LOA 84.

Chip, what is the particular language that the company may be violating. Assuming the company is simply lining up the financing for Mesa to operate these jets, I see an affiliate carrier operating up to 25+30=55 CRJ700 aircraft. Please enlighten me to what I am missing. Thanks.

 

[USA320Pilot]

N628AU:

You bring up a number of good points in your last post. Specifically, you''re right when you said, "Without seeing the actual financial contracts, none of us would know the details for sure." Each individual aircraft will have its own EETC and can be financed through the manufacturer, a financing company, a debt instrument holder, or be purchased.

The argument with Lav is more about his generalized comments and trying to support them with a press release versus truly knowing the facts. Nobody knows the facts except those who saw the agreements, however, I have known Bill Pollock for over 25 years since we entered Navy pilot training together and I know he is a man of impeccable integrity.

In regard to contract violations, this is currently being researched by ALPA Legal, ALPA''s Advisors, and Contract Administration.

N628AU asked: "I am curious as to why Chip has gone from this being a good move (lower debt on the balance sheet for US, etc.) to the point where we are talking contract violations again. Chip, what is the particular language that the company may be violating. Assuming the company is simply lining up the financing for Mesa to operate these jets, I see an affiliate carrier operating up to 25+30=55 CRJ700 aircraft. Please enlighten me to what I am missing."

Chip answers: I believe to have constructive management-labor relations the parties must abide by a contract, just like any other entity. ALPA agreed to permit the CRJ-700s to be operated and acquired by Mesa or a Participating Wholly Owned per the sections listed above, that is not a problem in itself. The problem is continued management disregard for the pilots working agreement in a number of areas, which occurred again in this dispute.

In regard to the placement of the jets at Mesa, there is a corporate economic benefit to the code share partner assuming the debt, but in this case a sublease is a violation to the contract if the aircraft are flown by other airline pilots because it could become a "wet lease". In addition, the legality of the financing arrangement is in question because it may not comply with pilots working agreements at the wholly owned airlines.

Regardless, from a business perspective the CRJ-705 could take years to manufacture and certify, thus does it make sense to substitute a portotype aircraft for an available Large RJ when the 25 CRJ-700s can be immediately put into service?

From this observer''s perch, this whole situation doe not make sense and there is likely more to the story.Let''s not forget management could have put these 70-seat aircraft, the CRJ-700s, at a wholly owned carrier as the contract allows, but chose otherwise.

In conclusion, I firmly believe ALPA has a good grasp of the situation and the best approach is for the MEC to force the company to comply with the pilots contract.

Best regards,

Chip

 

[TBONEJ4J]

Considering the critical nature of revenue flow to US Airways right now, and considering the fact that all the ALG and PDT pilots have been told that not one replacement airplane is in their future(This is a fact - from Bruce Ashby).

Further, considering that with the stated future of TurboProps in the US Airways system this means 100% Unemployment for the ALG and PDT Pilot Groups in the short to medium term.

Also, considering that the Dash 8''s are all flying around Full or close to Full. Just how much would it hurt the revenue stream if the Pilots at ALG and PDT decided they had been dumped on for the last time and ceased to provide that revenue stream that US Airways so desperately needs to survive.

When all hope is gone, there is nothing left. Why shouldn''t the pilots at ALG and PDT pull the plug?

 

[kiloromeo]

it all makes sense now...no wonder management continues to agree to these stifling ALPA contracts...they don''t even read them. The sad thing is that after all this "restructuring" its business as usual, i.e. loosing money. While Jet Blue, southwest and airtran will soon be in a full blow battle for the east coast. US airways will be consumed from within by its past.

 

[fr8tmastr]

I don''t see any reason the WO pilots would have to keep taking one for the team. It is quite obvious that the only time the WO''s are considered for anything is when mgmt wants money, or the ML pilots want jobs. My only consolation while I''m flipping burgers will be that I will be making the same as the New ML Mesa pilots and have more time off. So Thanks ML enjoy working for MESA, you deserve it.

US AIRWAYS YOUR CONTRACT CARRIER OF CHOICE.

 

[propjok]

A320 Driver


Sjs, RJs, whatever the heck you call them should all be at the WOs. I don't like this Mesa thing the company is so fond of.

A320 Driver

now you mainline *deleted by moderator* decide that all the rjs should be at the WOs. serves you right. we have been screaming about this same situation for years now but you deleted would not listen. you get what you deserve.

 

[A320 Driver]

A320 Driver

GIVE IT BACK!!!!!

 

[bassin]

So, since Mainline alpa didn''t get the 100% flying of the rj''s at the wo''s they won''t allow any wo pilot to fly the rj. I guess alpa got what they deserved. maybe alg and pdt pilots need to jump on comair''s lawsuit and/or file themselves. Of course if they do file one then they should sue the mainline alpa mec individuals also. It would serve them right. They know all to well how they are shafting they''re own fellow union members. Maybe after they had to spend some of their hard earned money paying a lawyer they would start to get a clue. Maybe in a couple years when they are being bus drivers for real and not in an airplane they will look back and realize just what they had, or could have had. Of course they will never have to drive a bus every airline is hiring pilots right now. Good luck to all and hopefully the only airplane you will be flying won''t be at the end of a piece of string or remote control

 

[Todd B]

lets play nice now