Where Are We...


May 18, 2003
Dear Fellow Employee:

During previous economic downturns airlines reduced capacity across-the-board to match supply with demand. As capacity was pulled down airlines increased their load factor and pricing power returned. During this down economic cycle the same thing occurred with US Airways the most aggressive in pulling down service, however, this time LCC’s are expanding with a superior business model keeping capacity to high for legacy carrier’s.

In fairness to US Airways’ senior management, who would have predicted JetBlue ordering EMB-100s proposing low pay scales, AirTran’s huge B737/B717 order, Southwest’s entrance into Philadelphia, or even Southwest considering buying the EMB-100?

The dramatic LCC growth plan will likely further depress domestic yields, which will effect US Airways more than other network airlines due to the company's route network. The structure of US Airways route network is the primary route of the company’s cost problem, but that is something that cannot be easily changed.

US Airways near-term problem is the requirement to maintain a minimum unrestricted cash balance of about $1billion until June 30 and then specific EBITDAR requirements throughout the loan guarantee period.

US Airways will have challenges with this government requirement and at this point there is no use complaining about the past and our collective mistakes. God knows there is enough blame everywhere within the company and there is no benefit to pointing fingers because there is nothing we can do about the past.

To meet these requirements US Airways has three options: quickly obtain consensual agreements between management and labor to permit the transformation plan to go forward, or conduct an asset sale to raise liquidity, or more than likely an combination of these two options.

One challenge US Airways’ board will face is that when the buyer knows the seller is distressed, the market value of the asset is low. Another words, why pay full market value when you know the asset could become available on the open market in a Chapter 7 bankruptcy liquidation? Moreover, US Airways does not have a lot off assets that other carriers desire. In my opinion, if asset sales occur, the likely assets to be sold would be PSA, Piedmont/Allegheny, the Shuttle, and the LaGuardia terminal.

Let’s examine why these could be sold and the likely buyer.

 PSA – The D-328 and CRJ operator is profitable, but this asset could be sold and not significantly effect the core business. US Airways’ benefit would be to raise cash, reduce aircraft acquisition debt going forward, and keep the feed within the US Airways network, providing future revenue. The likely candidate to obtain this asset – Mesa Air Group.

 Piedmont/Allegheny – It is less likely the combined companies would be sold because the debt load will be less, but the same parameters listed above for PSA exist. Furthermore, if all “wholly owned†airlines are spun-off this would eliminate a mainline merger problem, especially with United (UAL AFA Air Wisconsin scope grievance victory) going forward.

 Shuttle – If the Shuttle is sold, I expect it would be sold to a company that US Airways could code share with. Candidates include companies like Mesa, Chautauqua, and TSA, with the likely candidate to obtain this asset – Mesa that has publicly expressed interest in obtaining the asset.

 LaGuardia terminal – If US Airways elects to sell this facility, Continental Airlines has the first right of refusal. However, it makes sense that Delta and Continental may be interested in this asset to consolidate their facilities. Delta could move their Shuttle from the MAT, Continental could move from the main terminal, and Comair could use gates, which would give the three business partners LaGuardia’s best facility. This move would also permit the three airlines to obtain more connecting traffic, further depressing US Airways’ and or Mesa’s Shuttle traffic.

Provided US Airways can meet its financial challenges, there is extremely strong reason to believe that US Airways will be involved in a corporate transaction. I believe most observer’s understand who will be the Arlington-based company’s marriage partner, but the final form of any deal depends on a number of factors, some not in the control of either airline. First, US Airways and its partner both must prove to the financial community that they can survive and compete, otherwise the airlines would not be able to attract capital. Other interested parties that will have a voice in any deal will be the ATSB, DOJ/DOT, creditors committee, and bankruptcy court.

Right now it’s to early to tell who will be the surviving business entity or the final form, but it’s clear the end result will be a merger. Why? That’s the only way to remove dramatic cost cuts necessary to average down unit costs with economies of scale to compete with the LCC’s long-term. In my opinion we will either see an Air France-KLM type of deal or a true merger, but the end result will be a merger.

From the US Airways employee perspective, the only question is who will fly and support the company’s aircraft. US Airways employees or another airlines furloughed employees?

Therefore, when considering whether or not to support management’s transformation plan consider the following two points:

 Would it be better to enter a merger with 339 mainline aircraft, with 60 more A321’s, A320s, and A319s or 279 aircraft?

 If the potential changes are too much, then it's better to look for another job while you still have an income, medical insurance, dental insurance, travel privileges, and in the case of the pilots monthly DC Plan benefits.

The ALPA MEC will address this issue at a special meeting on Monday and Tuesday and according to US Airways spokesman David Castevetler in comments made to the Pittsburgh Post-Gazette on Friday, "We walked away from that meeting (January 15) recognizing we do share the same goals" and that "these goals are the survival of the company. We now wait to hear back from [the pilots] as to what the next step will be."

Therefore, when would now be a good time for all employee groups to meet with management to discuss the transformation plan, the requirement to stabilize finances, and then prepare for the upcoming corporate combination, with consolidation inevitable?


Ernie's brother was not the loss of your pension and being lied to not enough?

There is no meeting with Dave who blatantly lied to ALL US Airways Employees and broken every union's collective bargaining agreement, until Dave and his executives leave, there is not one reason to sit down with someone who is dishonest and does not respect the employees of this company who have given more then anyother group involved with this company.

After two trips to the concession stand it is closed.
  • Thread Starter
  • Thread starter
  • #3

You are in the minority. If you are that angry than I suggest you use this time to find another job. The current business plan is not working and the LCC's will eat US Airways' lunch if immediate changes are not made.

You are in the silent majority and this company will be involved in a corporate transaction. The only question is who will fly and support the 279 (possibly 339) aircraft fleet?

If you are that miserable, which it appears from your numerous posts, I respectfully suggest you use the next few months to look for another job while you still have an income, medical insurance, dental insurance, and travel privileges.



By the way...does it make you feel good to call people names? Interestingly, my children understand respect, but it appears you do not understand that basic human trait.

But you have to be kidding, go around and ask the employees, they are tired of Dave, tired of lies and tired of having their work stolen from them.

Take of the rose colored glasses and get a dose of reality and ask Mechanics, Utility, Fleet Service, Customer Service and F/As around the system and you will get the same opinion.

You can fall for another one of Dave's attempts to dangle the carrot in front of you, but his tenure at this company has been nothing but to decieve the employees, if you can't see that then you must be blind.

Call Names?

Lets go over Dave's lies:

1. Vote for concessions and you won't lose your pension.

2. Vote for this contract to protect your scope (ie Airbus Work).

3. September of 2002, this is what we need to make this company succesful.

4. December of 2002, we need more concessions to make this company work.

5. All of the laidoff US Airways Employees can have a job at MidAtlantic.

6. Two weeks after ALPA's concessions attempts to place 76 seaters at MESA.

If you want to deal with known liar, risk your future on it not 27,000 employees who do not trust one word Dave or any of his executives tell the employees.
:up: you are right 700 they the union and the company promised me
mid atlantic and as i see they never want me back I have too many years
they want 6.75 hr ramp ticket counter and operation agents or better yet
contract all ramps and flight operations. a320 try raising a family on that.
i have to say i honestly feel our options are quickly running out.
in this business climate also i might add the "merger" thing is a term from the "good old days"....it just doesn't make much sense with our business climate now.too much risk...too much cost.....
if IAM drops another nuke in Daves lap,i think this alone could put the bonkers on any type of "marriage" with that famous airline headquartered in ORD.
if it would come to a merger....we have AMFA representing UAL mech's and IAM
representing U...well if IAM prevails in court and UAL/U have to vote to choose a union...with all the outsourcing at UAL and all the mech's put on the street,and IAM keeping their work... in all probabilities they'd be inclined to go with the inhouse work ......this little pearl in it self will blow the keel out of any "marriage" as quick as you could blink. :blink:
Posted on Jan 17 2004, 09:59 PM

In fairness to US Airways’ senior management, who would have predicted JetBlue ordering EMB-100s proposing low pay scales, AirTran’s huge B737/B717 order, Southwest’s entrance into Philadelphia, or even Southwest considering buying the EMB-100?

How about anyone who knew competition exists in this industry. Or anyone who might think that US Airways bretrayal of its employee groups might cause an internal weakness.

Or how about anyone who pays attention to how JetBlue and AirTran do business.

Who could have predicted? How about all of those Ivy League business "professionals" that we pay hundreds of thousand of dollars of wages and bonuses to do just that.

And when would "now" be a good time to feed this ravenous greedy beast more of our substance?

NEVER ! ! !

It's time to start utilizing the army of highly skilled professionals that have been trying to fend off being consumed by you and our competitors both at the same time.

We've been doing our jobs! Now start doing yours!
Should employees be asking "when would now be a good time for all employees to......." (please forgive that syntax), or rather: just how much are people willing to pay their employer to keep their jobs?
TheLarkAscending said:
Should employees be asking "when would now be a good time for all employees to......." (please forgive that syntax), or rather: just how much are people willing to pay their employer to keep their jobs?
next dave road show maybe we can all pass the hat??

You say the current business plan is not working?? Geezus, how long has it been in affect? 6 months? What kind of bussiness plan was it? Why did Judge Mitchell and the ATSB Board approve such a business plan?

All labor groups have the same goals...and that is for our survival along with our company. If managements's intent were not self serving, they would leave our airline and the BOD would recognize that public opinion and perception is vitally important and they would see fit to replace this managment so we could get on with the business at hand.

With regard to the insurgence of the LCC and SW, we were all told in the Summer restructuring that the answer to the invasion and encroachment from the LCC, was Mid Atlantic....

And even if ALPA MEC may have a possible change of attitude and stance for whatever the "inticement" may be, does in no way mean or signal other labor groups to rise to that level ,or change their positions.

You can sit on these boards all day long and repeat how imperative it is for labor groups to come to the table.

We are directed to do so by our members; not mangement.
USA320Pilot said:
In fairness to US Airways’ senior management, who would have predicted JetBlue ordering EMB-100s proposing low pay scales, AirTran’s huge B737/B717 order, Southwest’s entrance into Philadelphia, or even Southwest considering buying the EMB-100?

Any executive worth their salt. You know, they presumably have very smart analysts and strategic planners at their disposal.

FWIW, the only suprise you really listed was LUV to PHL. Everybody and their brother would have thought ABE or perhaps TTN (if the NIMBYs could have been beaten down). The only surprise there was going to PHL--and with US in a post-bankruptcy weakened condition even that might not have suprised a CEO with a slightly smaller ego.

Regarding the crux of "when would be a good time to talk to the executives," I think you will find that only medium to senior members of ALPA are going to even consider it. The remainder of most of the organized labor on the property is either tired of giving back (or, unlike the more senior pilots, cannot afford to literally feed their family on what they are making now) or don't believe in the practice of eating their young or feeding them to the lions to maintain a seat.
A320 and everyone else is going to have to learn to make it on their own. UAIR is dead. It is time for most UAIR employees to "grow up". U have been spoiled. UAIR is no way able to survive in the future. A320 et al, are about to get a dose of their own. Do you have the balls to go at it on your own? I know that the UAIR job I took a leave from was the easiest in the world. I now work hard for my money(self employed...the hardest job you could ever have). But, it is MY responsibility. No incompetent management, gate agents, Captians, etc. It is all on my shoulders. How about U? Are U ready? It is the price of FREEDOM and I love it!!! Stop being a slave to UAIR and the Unions. Do the American thing, strike out on your own. That way, Dave has no power over you. I don't even care to say that I am a UAIR employee on leave. So fire me! FREEDOM!!! Hey Dave, My name is Ed. MY business makes money and I treat my employees with respect. Rant over.... <_<
Hey Ed,

I am grown up, work hard for my money, and am a slave to no one except myself and the standards I set. Unless you can start a business for me and finance it, I suggest you refrain from lumping everyone together and passing judgement. While you're at it, why don't you buy my house, pay off my vehicles and all outstanding debt, find a good school district for my kids, hire my spouse who is currently out of work, and give me spending money?

The point is - you don't know my situation, you have no idea how hard I work, and you're in no position to pass judgement. I have no idea what exactly you did or didn't do with UAIR but I do know one thing - I earn every stinking dollar I make and sometimes that isn't enough. How hard you work is all in how you approach your job and how high you set your standards. Mine have always been above and beyond the call of duty regardless of what job I've had.