US walks from 67 planes

USFlyer

Veteran
Aug 19, 2002
2,084
292
I too am interested in what this number really means. Does anyone remember what aircraft they were able to walk away from the first week of filing? Chip, any specifics?
 

ITRADE

Veteran
Aug 19, 2002
2,860
0
DCA/IAD US2
www.geocities.com
[P]Thanks for the updated info.[/P]
[P]Here's a peek of US's leased fleet component. This is from US's 8-K shortly before the 9/11 Unpleasantness:[/P]
[P]Leased (active) planes:[BR][BR]B-767-200 - 4[/P]
[P]B-757-200 - 11[/P]
[P]B-737-400 - 35[/P]
[P]B-737-300 - 74[/P]
[P]B-737-200 - 3[/P]
[P]F-100 - 4[/P]
[P]MD-80 - 4[/P]
[P]I won't list the A320 as they're certainly keepers.[/P]
[P]Of the parked MD-80s, 12 were leased; there were also at least a couple leased DC-9s.[/P]
[P] [/P]
 

rob2507

Newbie
Aug 21, 2002
5
0
The story has been updated...
http://biz.yahoo.com/rf/020905/airlines_us...ys_judge_1.html

The airline had argued that the aircraft, a mix of Fokker 100s, MD-80s, Boeing 737s and Boeing 757s, no longer fit into its business plan.

Among those originally objecting were German state-owned bank Kreditanstalt fuer Wiederaufbau, with 17 planes involved, John Han**** Life Insurance Co. (two planes), Dutch bank ABN AMRO (two planes) and Credit Suisse First Boston (one aircraft).

All but 10 of the 67 aircraft are already mothballed. Under the deal reached Thursday, US Airways will pay some storage and insurance costs for a short period.
 
C

chipmunn

Guest
The information in the CBS.MW & Reuters story is accurate and reflects the recent November pilot bid released last night, the new schedule, and the fleet plan to operate 279 aircraft with 259 active.

On August 11 the court provided an order for US to return 57 aircraft that included the 40 F-100s with the 17 remaining aircraft Dash-8s, DC-9s, MD-80s, & B737-200s.

US plans to return 32 additional aircraft to the lessor of which 3 are B-757s and 29 B-737-300s. The court has approved the return of ten of these aircraft; thus the total permitted for return has grown to 67.

Dependent upon future lessor negotiations, the remaining 22 aircraft scheduled for removal plus additional mainline aircraft can be returned through the bankruptcy process. US is attempting to re-negotiate aircraft lease payments to market rates. If the company can reduce its lease interest rate from about 11 to 5.5 percent, the B-737 monthly lease expense could drop from $250,000 to $270,000 per month to about $120,000 per month.

From a mainline fleet plan perspective, I found it interesting the court approved the transfer of only 10 of the 32 additional jets targeted for transfer. Why not all-32 aircraft? Also noteworthy, the company and ALPA have been conducting a joint pilot staffing review and a new pilot manning bid for December will be published in two weeks. This is unusual with the November bid result released yesterday.

I suspect if the lease company's renegotiate with US the lease payments on the 22 remaining target aircraft, we could see these jets returned to service and pilot staffing for the increased mainline flying adjusted in two weeks.

Chip
 

ITRADE

Veteran
Aug 19, 2002
2,860
0
DCA/IAD US2
www.geocities.com
[A href=http://biz.yahoo.com/rc/020905/airlines_usairways_judge_1.html]http://biz.yahoo.com/rc/020905/airlines_usairways_judge_1.html[/A][/URL][BR][BR]Are these old planes? Stored F-100s? 757s?
 

Lakeguy67

Advanced
Aug 31, 2002
123
0
www.usaviation.com
Probably the stored airplanes in the desert and the 31 airplanes they are going to park, they have all ready parked two 737s, 352 and 415, two 757s getting ready to park, 615 and 616.
 
C

chipmunn

Guest
Itrade, your comment is accurate. The $250,000 to $270,000 B-737 monthly lease payments were negotiated in the 80's by both Piedmont Airlines & USAir. The rates were not excessive at the time and were market rate based on rates established by the FOMC during this timeframe.

One of the primary drivers to seek a formal reorganization was the ability to walk away from aircraft leases for aircraft not in the inventory on day 1 and active aircraft after 60-days.

As previously reported in a Chip's Corner, German banking firm KFW and the State of Alabama Retirement Fund where unwilling to provide a voluntary lease payment restructuring. By filing for Chapter 11, US has used the bankruptcy code to remove excess aircraft, eliminate over $600 million in long-term debt, and lower its unit costs.

This plan is critical to become competitive, is required to obtain the loan guarantee (lessor concessions), and is an advantage for US over the competition, which does not seek formal protection. I also understand there are used B-767s, B-737s, and A-320s available and one US option is to return high lease expense aircraft from the lessor and replace the current aircraft with used equipment at favorable lease payments.

Meanwhile, the company continues to work on the fleet plan and is evaluating how to rationalize the fleet. One option is to return the A-330s through the 60-day bankruptcy code section and replace these aircraft with B-767-300ERs available from Asiana, BA whose equipment is parked in the dessert, or the former TWA jets being returned by AMR.

Quit fran**y, it appears UA is mimicking the US reorganization and may elect to file for the ability to restructure aircraft leases inside of court protection as well as eliminate ***bersome union governance issues.

Chip
 

ITRADE

Veteran
Aug 19, 2002
2,860
0
DCA/IAD US2
www.geocities.com
I agree that the plan to return high-lease aircraft and replace them with desert-dwellers is a novel idea. Fran**y, all this stuff would not be possible outside bankruptcy. I'd also imagine that US has gotten lucky with the right judge.

As to specifics, does anybody know how many B-767s are currently parked? Bill Harms' website lists about 2 dozen 767s not in service.

There appear to be 4 767-300s from BA that are parked - however they all have Rolls Engines. Ansett has about 8 CF6 powered 767-200s parked. However, most of them are quite old (nearly 20 years). I think AA is planning upon ditching its TW 767-300s - but they're PW engined.

If US could swing a deal for Asiana's 13 767-300s, that'd be terrific as their birds are new, their engines are common with US's 767s, and they would reduce capacity to match some markets. Of course, part of the argument for the US A-330s is the cargo capacity. I thin the 763 cargo capacity is the same as that of the 762.
 
C

chipmunn

Guest
Itrade, a couple of weeks ago when Dave Siegel was on our jumpseat, I don't remember if it was the fist or second time, Dave discussed the A-330/B-767 issue. He was intimately aware of the Asiana aircraft and their configuration, although he said they were still working on rationalizing the widebody fleet.

Also noteworthy, Dave discussed and appeared to have specific knowledge of available A-320 & B-737 parked aircraft that are available at favorable lease rates.

Although there is short-term employee pain with the fleet cuts, the corporation has a one-time opportunity to dramatically lower its aircraft capital expenditures through the bankruptcy process. The window of opportunity exists after the 60th day of bankruptcy; therefore, we should know the rationalization specifics somewhere between October 9 and when the Plan of Reorganization (POR) is submitted to the court, with the POR target date reiterated to the judge today of no later than December 31.

Chip
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
It sure would be nice if these leasing companies and other entities would scrap a good portion of these aircraft that are collecting tumbleweeds in the desert. While I realize there are financial implications for doing so, when the economy turns around, there is going to be an incentive-laden buyer's market for Joe Blow Startup Airline to put some of these desert dogs to work against the very airlines that returned them. I'm sure the airlines and aircraft manufacturers would love to turn many of these into razor blades to force any new upstarts to buy/lease new jets instead of old ones.
 

JS

Veteran
Aug 24, 2002
2,004
1
DFW
Visit site
[blockquote]
----------------
Originally posted by UAL777flyer:

It sure would be nice if these leasing companies and other entities would scrap a good portion of these aircraft that are collecting tumbleweeds in the desert.

----------------[/blockquote]

I doubt the lessor would want to do that. Would you burn your own house down because your tenant isn't paying the rent?

U could continue to pay the lease and then chop up the planes, but that also seems pretty stupid.

Airlines destroying their own planes to fend off future competition is disturbing to me, from the standpoint of a de-regulated airline industry.

It's like collusion -- it makes perfect sense for the incumbent airlines but is clearly not in the best interests of passengers and new entrant carriers.
 

AOG-N-IT

Veteran
Aug 19, 2002
1,132
1
www.usaviation.com
[blockquote]
----------------
On 9/5/2002 3:22:12 PM ITRADE wrote:

I agree that the plan to return high-lease aircraft and replace them with desert-dwellers is a novel idea. Fran**y, all this stuff would not be possible outside bankruptcy. I'd also imagine that US has gotten lucky with the right judge.


As to specifics, does anybody know how many B-767s are currently parked? Bill Harms' website lists about 2 dozen 767s not in service.


There appear to be 4 767-300s from BA that are parked - however they all have Rolls Engines. Ansett has about 8 CF6 powered 767-200s parked. However, most of them are quite old (nearly 20 years). I think AA is planning upon ditching its TW 767-300s - but they're PW engined.


If US could swing a deal for Asiana's 13 767-300s, that'd be terrific as their birds are new, their engines are common with US's 767s, and they would reduce capacity to match some markets. Of course, part of the argument for the US A-330s is the cargo capacity. I thin the 763 cargo capacity is the same as that of the 762.
----------------
[/blockquote]
I can only hope that a deal can be swung to obtain the Asiana B767's. This would be a logistical dream....instead of the current nightmare the A330-300...and It's Pratt and Whitney 4168's are causing us. When Dave mentioned this possibility at the CLT Roadshow...My ears and a couple of others that deal with this garbage . perked up like a bunch of German Shepards. People never take into account the support issues. This is all too often lost in glow of the Initial Purchase/Lease price. What they fail to consider is commonality in parts, tooling and training. Aircraft are not self-sustaining items. Having the only A330's in America is a tough act ...and the engines are no better. I was so excited about even the prospect of waving the A330's good-bye....I sent Dave and E-mail listing why (beyond lease rates) that this is precisely the direction we should be taking. I realize that will be giving up some cargo capacity...but we will be increasing our ability to fly tremendously. I realize all too well that passengers and crews seem to like the new toy....but if a more reliable and easier to support Acft is available?....and the logistics are in line with our current abilities? We would be foolish to continue with the boon-doggle of the Wolf-Era. The A330-300 was a purely ill-concieved move. This reminds me of a joke I heard on a Car Enthusiasts radio talk show. The question was...Is a Pugeot a good choice?....Awnser...only if you live in France..and that's still debateable. The A330 fits into an alike situation...only thing is, you can't support them in France either.
 

ITRADE

Veteran
Aug 19, 2002
2,860
0
DCA/IAD US2
www.geocities.com
It would seem to be a logical swap. IIRC, Asiana has A-330s on order and that would simply create another fleet type. Asiana get the A-330s - holding fleet types constant - and US gets 763s - effectively reducing a fleet type.