What Does The Future Hold For The W/o's?

[Air conditioned]

This may have already been covered in another forum, but I can't seem to find it.

I was talking recently with several good friends at Piedmont. (both pilots and ground crew)
What is in the works for them? They have been told that they will survive, but I wanted to see what sort of information or thoughts anyone had on this.
Are they okay for now? I hadn't heard much about the W/O's lately.

 

[FM2436]

Interesting thing is the W/O's are airlines operating within an airline. I've asked in previous posting couldn't US Airways mainline be liquidated and transfer some of mainline assets (Airbus aircraft) to the new Piedmont and resurrect Piedmont into the new US Airways?

 

[Prince of PAWOBs]

Seems unlikely that would happen, especially when mainline is flying aircraft that they appropriated from their w/o's (767's).

 

[BoeingBoy]

Prince,

The 767's (and many of the 737's) came from the original PI, not the W/O'd that has been renamed PI (formerly Henson).

Jim

 

[FM2436]

Prince,

The 767's (and many of the 737's) came from the original PI, not the W/O'd that has been renamed PI (formerly Henson).

Jim

Oh, I realize that. But couldn't a new US Airways offer pilot jobs to yesterday's laid-off old US Airways pilots. A next day take it or leave it job offer?

I may be wrong but it seems like there are alot of "current in type" ex-airline pilots who may jump at the opportunity to have a job at a new US Airways.

 

[B.N.]

FM2436,
Not an expert on the subject, but I think pilots that accepted a job "stolen" from mainline USAir pilots, would be SCABS, at least in my book.

BN

 

[FM2436]

FM2436,
Not an expert on the subject, but I think pilots that accepted a job "stolen" from mainline USAir pilots, would be SCABS, at least in my book.

BN

I realize that too. But in today's airline industry, I'd bet you'd see many pilots cross that line and take that job offer. Airline pilot are clearly highly skilled, federally licensed, and professional jobs. But how are those jobs skilled transfered to a non-pilot job in today's common work force. There are certainly non airline jobs available in the common job market that pay higher than a $70,000 salary. But are the skills of a 15,000 hour+ 737 pilot marketable to that common job paying a $70,000 salary.

I believe the majority of airline pilots want to be airline pilots. I believe many knew at a very young age that they wanted to be airline pilots. To do any thing else would make them miserable.

 

[Light Years]

I've said this a few times, but look at Swissair/Crossair and the new Swiss Air Lines. Crossair was the regional subsidiary. When Swissair went under, they simply transferred those aircraft (A340, A330, A320, MD11 etc) onto the crossair certificate, and viola, Swiss Air Lines.

Who's to say they wont spin off the MAA division onto the seperate former AL certificate (dont they have the original MidAtlantic/Potomac/DCAir one too or is it expired?). Chapter 11 part two, chapter 7 for the mainline, put the A320 and A330 families at MAA, and you've got your right-sized, low cost US Airways with experienced and likely less troublesome employees (after all, they accepted MAA) picking up where they left off. There would also be the benefit that these are the junior employees who'd be willing to work under an LCC style contract. Sure they'd offer the mainline people jobs as new hires, knowing few will go. As for "scabbing" in such a situation, the junior folks would surely tell the senior folk that hey, you sold us out and created MAA just for us- not our fault its the survivor. Unfortunatly most of the labor groups have fallen for the old "seniors sell out the juniors" trick... well, in the end management wants the juniors, not the seniors.

Unpleasant? Definately. Far-fectched? Maybe, or maybe not... it has happened before. The powers that be know thier airline history and know every little trick in the book... I sure hope the employees do.

 

[jimntx]

Who's to say they wont spin off the MAA division onto the seperate former AL certificate (dont they have the original MidAtlantic/Potomac/DCAir one too or is it expired?). Chapter 11 part two, chapter 7 for the mainline, put the A320 and A330 families at MAA, and you've got your right-sized, low cost US Airways with experienced and likely less troublesome employees (after all, they accepted MAA) picking up where they left off.

Not disagreeing with the gist of your thought, just a small point...

In a Chapter 7 filing, U would not get final say on how the assets of the mainline are disposed of. More than likely, the creditors would be able to seize or be awarded physical assets--such as, a/c--to dispose of as they see fit to satisfy the debt owed to them.

Also, it would be interesting to know what would actually happen to the WOs in a Chapter 7 proceeding. Because they are assets of the company being liquidated, I'm not sure that they would have freedom to act as separate corporations. It's a different situation for WOs than with subsidiary companies that are simply "majority-owned" by the parent company.

In Chapter 7, what the company (or its creditors in a forced liquidation) is saying is, "This company is no longer a going concern. It needs to be shut down and its assets distributed to the creditors as fairly as possible and to the extent possible. Because all the creditors want to be first in line to be paid, you, Mr. Bankruptcy Court Judge, are going to have to determine in what manner and what order the assets are distributed."

P.S. Employee claims are not at the end of the line. They are one up from the stockholders who get paid after the creditors' dogs, cats, and children get paid. :huh:

 

[Light Years]

Jim-

All very true. When US was in Chapter 11, it was actually seven subsidiaries of the US Airways Group, including the four airlines it owns (US Airways Inc, Allegheny Airlines, Piedmont Airlines, and PSA Airlines.) As it stands now, MAA is just part of US Airways Inc and is only seperate by labor contracts. Its not really an airline. So it would go in with US.

But what if they spun it off like Continental did with ExpressJet? Are they a totally independent company with CO having a stake or still considered owned?

So its really up to the creditors where everything goes... it'd be interesting to know where they would like them placed...

The above scenario could also happen with an affiliate like Mesa, I suppose. Either way, what MAA is is an alter-ego division operating with the same employees (the junior ones) under new contracts, operating the same routes with slightly smaller jets... If it does get spun off into its own entity it really could easily replace the mainline. I guess I'm paranoid, but why does a "division" have a name, logo, and seperate staff?

 

[Air conditioned]

I guess I'm paranoid, but why does a "division" have a name, logo, and seperate staff?

Excellent point, Light Years. I have wondered that myself. But anything can happen, that's for sure. And around here, anything will.
As far as building up MAA, they will have noone working for them but the furloughees (who are just happy to have a job again), so they won't be complaining much. I'm sure that sounds appealing to CCY. h34r:

I still can't help to wonder what will happen to the wholly owneds...I suppose if the company was going to build them up they would have started to do so by now. All they seem to be doing is downsizing and taking away the DHC-8's. They don't seem to be replacing them with anything. Does the LOA 91 allow for this? :unsure:

 

[Light Years]

If I'm reading correctly, LOA 91 doesnt benefit anyone at US who is junior or W/O... it instead allows to the company to contract out even more, and larger planes.

 

[jimntx]

Jim-

All very true. When US was in Chapter 11, it was actually seven subsidiaries of the US Airways Group, including the four airlines it owns (US Airways Inc, Allegheny Airlines, Piedmont Airlines, and PSA Airlines.) As it stands now, MAA is just part of US Airways Inc and is only seperate by labor contracts. Its not really an airline. So it would go in with US.

But what if they spun it off like Continental did with ExpressJet? Are they a totally independent company with CO having a stake or still considered owned?

So its really up to the creditors where everything goes... it'd be interesting to know where they would like them placed...

The above scenario could also happen with an affiliate like Mesa, I suppose. Either way, what MAA is is an alter-ego division operating with the same employees (the junior ones) under new contracts, operating the same routes with slightly smaller jets... If it does get spun off into its own entity it really could easily replace the mainline. I guess I'm paranoid, but why does a "division" have a name, logo, and seperate staff?

If MAA were spun off or there was an IPO of stock giving outsider stockholders a majority ownership, it would have to be done before U filed for bankruptcy. Once in bankruptcy, no assets can be sold/transferred/disposed of without the court's permission.

What Continental did with ExpressJet was to sell on the open market a large chunk of its stock in Express. Continental retains 29% (I think) of the total stock which is a controlling interest without being a majority interest. ExpressJet has a totally separate BOD, and is publicly traded separate from CO. That is a different situation than with the WOs.

I'm fairly certain that if U went into CH7, none of the WOs or MAA would survive, as such. For the creditors to say, "ok, let's transfer these planes over to MAA or one of the other WOs and let them keep flying," would in effect be investing in a new business rather than getting paid for debts owed by U. I would guess that the creditors would either want physical possession of the owned assets (a/c, office buildings, etc) or a written plan for distribution of proceeds from a bankruptcy auction of those assets.

If you see U start to spin off the WOs or MAA into truly separate companies (that U is only a stockholder in), I would begin to think that bankruptcy is nigh. Of course, at this late stage in the game, the creditors could make a fairly strong case that spinning off the WOs was nothing more than a fraudulent sham to hide assets from the bankruptcy court. The courts tend to frown upon hiding assets and might overturn any such action.

 

[atlantis]

If MAA were spun off or there was an IPO of stock giving outsider stockholders a majority ownership, it would have to be done before U filed for bankruptcy. Once in bankruptcy, no assets can be sold/transferred/disposed of without the court's permission.

If you see U start to spin off the WOs or MAA into truly separate companies (that U is only a stockholder in), I would begin to think that bankruptcy is nigh. Of course, at this late stage in the game, the creditors could make a fairly strong case that spinning off the WOs was nothing more than a fraudulent sham to hide assets from the bankruptcy court. The courts tend to frown upon hiding assets and might overturn any such action.

I was reading this an thinging they are being spun off now but nobody is noticing plus mid alantnic flight attendants are having employee numbers from piedmont airlines giving to them right? so are they being combined or what. ?