Sub-note: - United has asked ACA, Skywest and Air Wisconsin to make concessions on the "fee for departure" schedule. As an added incentive, United also announced talks with Mesa and Chautauqua asking them to bid on current carrier's lines. The new carriers have noted that the United work would be perfect for their non-union subsidiaries (Freedom and Republic).
From Washington Post, January 16th edition
Atlantic Coast Seeks Answers From United
By Keith L. Alexander
CHICAGO, Jan. 15 -- Atlantic Coast Airlines Holdings Inc., the Dulles-based regional carrier that relies on United Airlines for most of its business, asked a U.S. Bankruptcy Court judge today to force United to declare by Feb. 28 whether it plans to continue using Atlantic Coast.
United could reject or maintain its current affiliation contract with Atlantic Coast, but under bankruptcy law United does not have to make a decision for months into its 18-month planned reorganization. Atlantic Coast, however, asked Judge Eugene R. Wedoff to force United to make a decision sooner. Wedoff said he will rule on the petition at a Feb. 6 hearing if the airlines do not reach an agreement by then.
United's intentions for Atlantic Coast may show how big a role regional jet operations will play in Chicago-based United's reorganization strategy.
Atlantic Coast is United's largest regional partner and operates 33 regional jets under the United Express banner. Atlantic Coast, which has 46 additional jets on order that would become part of the regional operation, currently operates 600 daily flights for the world's second-largest airline.
Atlantic Coast attorney Robert M. Fishman said the airline's executives were in limbo and were fearful of being stuck with more planes than they need if United reduces its Express operation. Fishman said he hoped United would inform Atlantic Coast before Feb. 6.
"Atlantic Coast is caught between a rock and hard place," Fishman said. "Either they keep assuming United is going to keep doing business with them or start making business decisions in a world where United is no longer part of their operations. But they have to know something soon."
Fishman said that if United decides it no longer wants Atlantic Coast operating its regional flights, the small airline might not have not enough passengers to fill the additional seats.
United's other two regional operations, Air Wisconsin Airlines Corp. and SkyWest Airlines Inc., have not joined Atlantic Coast's petition. But Fishman said the other two were "considering" filing a similar petition.
Frederic F. "Jake" Brace, United's chief financial officer, said the airline was in discussions with Atlantic Coast and trying to "work out an appropriate relationship."
Late last month, United acknowledged that it was in talks with its three regional partners over cutting its payments by $70 million to $80 million a year to help reduce costs while in bankruptcy.
Atlantic Coast spokesman Rick DeLisi said yesterday that those discussions were continuing.
Also yesterday, Judge Wedoff said he would rule at the Feb. 6 hearing on whether State Street & Trust Co., trustee for the airline's employee stock-ownership plan, could sell its remaining shares. On Monday, United's parent company, UAL Corp., said it would allow State Street -- which has expressed fears that the stock may become worthless -- to sell about 13 million of the plan's remaining 32.5 million shares. UAL executives had argued that if State Street was allowed to sell more, the change could result in an ownership shift that might affect up to $1.4 billion in future tax benefits.
From Washington Post, January 16th edition
Atlantic Coast Seeks Answers From United
By Keith L. Alexander
CHICAGO, Jan. 15 -- Atlantic Coast Airlines Holdings Inc., the Dulles-based regional carrier that relies on United Airlines for most of its business, asked a U.S. Bankruptcy Court judge today to force United to declare by Feb. 28 whether it plans to continue using Atlantic Coast.
United could reject or maintain its current affiliation contract with Atlantic Coast, but under bankruptcy law United does not have to make a decision for months into its 18-month planned reorganization. Atlantic Coast, however, asked Judge Eugene R. Wedoff to force United to make a decision sooner. Wedoff said he will rule on the petition at a Feb. 6 hearing if the airlines do not reach an agreement by then.
United's intentions for Atlantic Coast may show how big a role regional jet operations will play in Chicago-based United's reorganization strategy.
Atlantic Coast is United's largest regional partner and operates 33 regional jets under the United Express banner. Atlantic Coast, which has 46 additional jets on order that would become part of the regional operation, currently operates 600 daily flights for the world's second-largest airline.
Atlantic Coast attorney Robert M. Fishman said the airline's executives were in limbo and were fearful of being stuck with more planes than they need if United reduces its Express operation. Fishman said he hoped United would inform Atlantic Coast before Feb. 6.
"Atlantic Coast is caught between a rock and hard place," Fishman said. "Either they keep assuming United is going to keep doing business with them or start making business decisions in a world where United is no longer part of their operations. But they have to know something soon."
Fishman said that if United decides it no longer wants Atlantic Coast operating its regional flights, the small airline might not have not enough passengers to fill the additional seats.
United's other two regional operations, Air Wisconsin Airlines Corp. and SkyWest Airlines Inc., have not joined Atlantic Coast's petition. But Fishman said the other two were "considering" filing a similar petition.
Frederic F. "Jake" Brace, United's chief financial officer, said the airline was in discussions with Atlantic Coast and trying to "work out an appropriate relationship."
Late last month, United acknowledged that it was in talks with its three regional partners over cutting its payments by $70 million to $80 million a year to help reduce costs while in bankruptcy.
Atlantic Coast spokesman Rick DeLisi said yesterday that those discussions were continuing.
Also yesterday, Judge Wedoff said he would rule at the Feb. 6 hearing on whether State Street & Trust Co., trustee for the airline's employee stock-ownership plan, could sell its remaining shares. On Monday, United's parent company, UAL Corp., said it would allow State Street -- which has expressed fears that the stock may become worthless -- to sell about 13 million of the plan's remaining 32.5 million shares. UAL executives had argued that if State Street was allowed to sell more, the change could result in an ownership shift that might affect up to $1.4 billion in future tax benefits.
