US Airways Said to Plan to Ask Court for Pay Cuts
Complete Story
US Airways may ask court to void labor pacts
Complete Story
The company and the ATSB know exactly US Airways’ cash position and the government hired Lazard to audit the process. US Airways must provide the auditor constant reports on its cash, including a weekly 13-week cash forecast, showing the sources and uses of cash. The airline, which reported $750 million in unrestricted cash, cannot dip below $600 million next week and $550 million for the week ending Oct. 1.
Separately, US Airways entered Bankruptcy I with about $1 billion and Bankruptcy II with $1.45 billion, although the ATSB is holding a gun to the head of the company.
On September 13 US Airways asked the court for permission to avoid payment on several of its retirement plans. That includes a $110 million pension payment to the IAM & AFA DB pension and about $19 million in contributions to the pilots' DC retirement plan. Judge Mitchell has scheduled a hearing on the issue on October 7.
According to the New York Times, US Airways plans to ask a federal bankruptcy judge on October 7 to impose temporary pay cuts on its workers unless it can reach agreement with its unions before then
This September 15 pension payment default has already provided the company with cash flow relief.
Meanwhile, there are more pension payments due on October 14, which is the day the company’s first Omnibus hearing is scheduled.
Here are some news media reports:
· To meet expenses, including payment of employee wages and benefits, and the continued purchase of goods and services going forward, the Court today also approved interim use of an adequate portion of operating cash. The operating cash represents a portion of the $750 million in cash, which serves as a component of the collateral that supports the Air Transportation Stabilization Board (ATSB) loan. The Court has set a final hearing for final approval on the agreement with the ATSB regarding the use of cash for Oct. 14.
· "The ATSB will continue to work with US Airways as it seeks to restructure and will work with the bankruptcy court to ensure that the taxpayers' interests are protected," the board said in a statement released Sunday. Besides pledging to work with the carrier in bankruptcy court, the ATSB said it "understands the circumstances surrounding today's filing."
· "It's important to realize the creditors really hold the cards," said William Warlick, an airline analyst with Fitch Ratings.
I appears to me the ATSB is running the show and US Airways has the timing of cuts already set in their business plan and plan of reorganization (POR), either consensual or via imposition. It is expected this week the company is going to provide both the IAM and CWA with the 5-point plan: America West wages adjusted for seniority, JetBlue work rules, LTD plan changes, and retirement plan changes. This process was completed on September 10 for ALPA and the AFA.
It appears the company has everything “T†crossed and every “I†dotted and without court approval of a S.1113(e) and then a S.1113 motion the business enterprise will fail. Thus, the company may have just neutered the RC4 and the other unions.
If Judge Mitchell approves the S.1113(e) motion, which does not require negotiation, MEC, or membership approal, US Airways would have financial relief imposed on ALPA and the other unions. Then the unions would have 60 days to negotiate new deals with the airline before the judge could permanently impose the airline's proposed contract terms. The third Omnibus hearing is scheduled for December 16, when the company’s new 5-point employee contracts could permanently be put in place. I believe it’s also important to note that US Airways said as part of the Company’s timetable to emerge from Chapter 11 reorganization, the airline intends to ile its disclosure statement POR by the end of this year. Therefore, early next year the company would hold its 341 meeting, creditors vote on the POR and disclosure statement, and then could emerge from bankruptcy in February.
There is no question there are challenges, but this time US Airways may finally have a plan to compete.
Regards,
USA320Pilot
Complete Story
US Airways may ask court to void labor pacts
Complete Story
The company and the ATSB know exactly US Airways’ cash position and the government hired Lazard to audit the process. US Airways must provide the auditor constant reports on its cash, including a weekly 13-week cash forecast, showing the sources and uses of cash. The airline, which reported $750 million in unrestricted cash, cannot dip below $600 million next week and $550 million for the week ending Oct. 1.
Separately, US Airways entered Bankruptcy I with about $1 billion and Bankruptcy II with $1.45 billion, although the ATSB is holding a gun to the head of the company.
On September 13 US Airways asked the court for permission to avoid payment on several of its retirement plans. That includes a $110 million pension payment to the IAM & AFA DB pension and about $19 million in contributions to the pilots' DC retirement plan. Judge Mitchell has scheduled a hearing on the issue on October 7.
According to the New York Times, US Airways plans to ask a federal bankruptcy judge on October 7 to impose temporary pay cuts on its workers unless it can reach agreement with its unions before then
This September 15 pension payment default has already provided the company with cash flow relief.
Meanwhile, there are more pension payments due on October 14, which is the day the company’s first Omnibus hearing is scheduled.
Here are some news media reports:
· To meet expenses, including payment of employee wages and benefits, and the continued purchase of goods and services going forward, the Court today also approved interim use of an adequate portion of operating cash. The operating cash represents a portion of the $750 million in cash, which serves as a component of the collateral that supports the Air Transportation Stabilization Board (ATSB) loan. The Court has set a final hearing for final approval on the agreement with the ATSB regarding the use of cash for Oct. 14.
· "The ATSB will continue to work with US Airways as it seeks to restructure and will work with the bankruptcy court to ensure that the taxpayers' interests are protected," the board said in a statement released Sunday. Besides pledging to work with the carrier in bankruptcy court, the ATSB said it "understands the circumstances surrounding today's filing."
· "It's important to realize the creditors really hold the cards," said William Warlick, an airline analyst with Fitch Ratings.
I appears to me the ATSB is running the show and US Airways has the timing of cuts already set in their business plan and plan of reorganization (POR), either consensual or via imposition. It is expected this week the company is going to provide both the IAM and CWA with the 5-point plan: America West wages adjusted for seniority, JetBlue work rules, LTD plan changes, and retirement plan changes. This process was completed on September 10 for ALPA and the AFA.
It appears the company has everything “T†crossed and every “I†dotted and without court approval of a S.1113(e) and then a S.1113 motion the business enterprise will fail. Thus, the company may have just neutered the RC4 and the other unions.
If Judge Mitchell approves the S.1113(e) motion, which does not require negotiation, MEC, or membership approal, US Airways would have financial relief imposed on ALPA and the other unions. Then the unions would have 60 days to negotiate new deals with the airline before the judge could permanently impose the airline's proposed contract terms. The third Omnibus hearing is scheduled for December 16, when the company’s new 5-point employee contracts could permanently be put in place. I believe it’s also important to note that US Airways said as part of the Company’s timetable to emerge from Chapter 11 reorganization, the airline intends to ile its disclosure statement POR by the end of this year. Therefore, early next year the company would hold its 341 meeting, creditors vote on the POR and disclosure statement, and then could emerge from bankruptcy in February.
There is no question there are challenges, but this time US Airways may finally have a plan to compete.
Regards,
USA320Pilot