Air Wisconsin gets the Boot from UAL

[BLUE BAYOU]

April 7, 2005 United Airlines will drop regional partner Air Wisconsin, which agreed in February to take a stake in bankrupt US Airways, United officials said on Thursday.

Air Wisconsin operates about 500 daily flights for United as an express carrier from Chicago O'Hare, Denver and Washington Dulles airports. With 70 50-seat regional jets and 14 other aircraft, it flew more than seven million passengers for United in 2004, generating about USD$700 million in revenue.

United, operating under bankruptcy court protection since late 2002, has reached agreements with two regional airlines to take over at least some of the routes flown by Air Wisconsin. Other carriers may be added, said United spokeswoman Jean Medina.

Air Wisconsin, the nation's largest privately held regional airline, is based in Appleton, Wisconsin.

United has been trying to save money on routes flown by regional carriers. It said in court papers it could not reach a new pricing agreement with Air Wisconsin, and opted to phase out its express partnership rather than accept a proposed contract at "above market rates."

Officials at Air Wisconsin could not be reached for comment.

If a federal bankruptcy judge in Chicago approves the transition proposal at a hearing scheduled for April 22, a year-long phase-out of Air Wisconsin flights for United will begin this spring.

Air Wisconsin will provide some ground services for United after its flying contract ends.

The decision to drop Air Wisconsin also follows the decision this week of a court-appointed mediator that Air Wisconsin's USD$125 million financing and equity deal with US Airways posed no conflict with Air Wisconsin's current relationship with United.

United had sought to review the full agreement between US Airways and Air Wisconsin's investment arm, Eastshore Aviation, to see if money United had paid its regional partner was being used to help finance rival US Airways.

While only partial details have been available, Medina said United was satisfied with the mediator's decision.

United said Skywest Airlines and GoJet Airlines, a subsidiary of St. Louis-based Trans States Holdings, will take over some of the Air Wisconsin routes. SkyWest already flies for United Express. The switch will allow United to shrink its fleet size.

Air Wisconsin also has rights, as an express partner, to fly up to 70 regional jets for US Airways, if it emerges from bankruptcy. US Airways hopes to do that by August 31.

US Airways said the decision by United to drop Air Wisconsin would not affect its agreement with the regional airline. "We welcome the opportunity to strengthen our business partnership," US Airways said in a statement.

(Reuters)

 

[On Your Six]

April 7, 2005 United Airlines will drop regional partner Air Wisconsin, which agreed in February to take a stake in bankrupt US Airways, United officials said on Thursday.

Air Wisconsin operates about 500 daily flights for United as an express carrier from Chicago O'Hare, Denver and Washington Dulles airports. With 70 50-seat regional jets and 14 other aircraft, it flew more than seven million passengers for United in 2004, generating about USD$700 million in revenue.

United, operating under bankruptcy court protection since late 2002, has reached agreements with two regional airlines to take over at least some of the routes flown by Air Wisconsin. Other carriers may be added, said United spokeswoman Jean Medina.

Air Wisconsin, the nation's largest privately held regional airline, is based in Appleton, Wisconsin.

United has been trying to save money on routes flown by regional carriers. It said in court papers it could not reach a new pricing agreement with Air Wisconsin, and opted to phase out its express partnership rather than accept a proposed contract at "above market rates."

Officials at Air Wisconsin could not be reached for comment.

If a federal bankruptcy judge in Chicago approves the transition proposal at a hearing scheduled for April 22, a year-long phase-out of Air Wisconsin flights for United will begin this spring.

Air Wisconsin will provide some ground services for United after its flying contract ends.

The decision to drop Air Wisconsin also follows the decision this week of a court-appointed mediator that Air Wisconsin's USD$125 million financing and equity deal with US Airways posed no conflict with Air Wisconsin's current relationship with United.

United had sought to review the full agreement between US Airways and Air Wisconsin's investment arm, Eastshore Aviation, to see if money United had paid its regional partner was being used to help finance rival US Airways.

While only partial details have been available, Medina said United was satisfied with the mediator's decision.

United said Skywest Airlines and GoJet Airlines, a subsidiary of St. Louis-based Trans States Holdings, will take over some of the Air Wisconsin routes. SkyWest already flies for United Express. The switch will allow United to shrink its fleet size.

Air Wisconsin also has rights, as an express partner, to fly up to 70 regional jets for US Airways, if it emerges from bankruptcy. US Airways hopes to do that by August 31.

US Airways said the decision by United to drop Air Wisconsin would not affect its agreement with the regional airline. "We welcome the opportunity to strengthen our business partnership," US Airways said in a statement.

(Reuters)

Wow - after so many years of partnership... How many employees will be impacted out of ORD? What's the next step for basing pilots/FAs - will there be relocations to USAirways hubs? Is there a phase-out of 146s planned?

Good luck to all involved!

 

[Wiskey Driver]

That is really a shame!!! AWAC has always been loyal to UAL only to be treated in this manner. I spent the better part of three yrs with AWAC and can tell you from personal experience this hit the Denver people the hardest. That is a fine group of ladies and gentleman over there and I hope that the impact is minimal if at all.

I wish you all the best.

WD.

 

[jrod]

Wow - after so many years of partnership... How many employees will be impacted out of ORD? What's the next step for basing pilots/FAs - will there be relocations to USAirways hubs? Is there a phase-out of 146s planned?

Good luck to all involved!

It appears that ORD will close completely, although that has not been announced yet. No word yet on US Air hubs, but rumors seem to indicate that we have been interviewing F/A's in PIT and CLT.

146's will be phased out. down to 5 by nov and all gone by apr 06.

 

[crashpad]

What really went on with this whole USAir deal? It's no coincidence that UAL made it's announcement shortly after, and certainly the execs for both companies knew about this in advance.

My fear is that USAir and the 3 amigos (AirWisco owners) have devised a plan to turn Air Wisconsin into bargaining chip against liquidation, with the unfortunate cheddar pilots sacrificed to buy a little more time. USAIR will use legal loopholes to spend the $125 million (which is chicken-scratch to them) and make AirWisco sit on the sidelines while they burn the cash.

We'll probably have the answer if the ZW pilots get walking papers next week.

 

[labbats]

Anyone else find it funny that United would drop Air Wisconsin for two non-union carriers?

Air Wisconsin, I wish you the best.

 

[FlyBoeingJets]

Anyone else find it funny that United would drop Air Wisconsin for two non-union carriers?

Air Wisconsin, I wish you the best.

That is the trend in the industry. JetBlue is also non-union and loving it. JetBlue's new 190 cost structure has the regionals and majors scared.

CH 11 is the union busting tool that threatens liquidation. GECAS is the savior that is working feverishly to keep hundreds of planes on lease. Ironically, it may allow the legacies/regionals to stick around and compete against JetBlue. The jury is out on that but I think JetBlue will have viable competitors in 100 seat markets. Or, GECAS may attempt to orchestrate a slow and steady downsizing of the weakest until they go under. My theory is GECAS is planning for either outcome. They'll make money no matter what.

First and foremost, I am not pleased with these hard ball management techniques. Don't even mention airline management ineptitude and greed.

But in this revenue environment something has to give. Whatever the cause--excess capacity, poor economy, LCC critical mass--costs can't stay at current levels. Not with the momentum of lower cost carriers. They have never had this much power. High debt loads will demand a lower CASM to overcome interest payments.

For UAL it is now essential to have the lowest wages. GECAS will like it and offer them exit financing that is critical for survival. Tilton is also searching for foreign investment and pushing for foreign ownership rule changes.

I am not fooled by UAL's public statements. They report huge losses then state how successful Ted service is. They are downsizing domestic service, but expanding Ted. Ted may never be a money maker, but it will be "successful" if it, and UAL's regional feed, are partly financed from big profits on international routes.

American will have to deal with this. Delta is now.

 

[80drvr]

American will have to deal with this. Delta is now.

Have you already forgotten about American's restructuring? I wish I could ;o)

 

[FlyBoeingJets]

Have you already forgotten about American's restructuring? I wish I could ;o)

No, but I may be underestimating the return to profitability. You guys did a really good job of saving the company. Maybe it was enough. All you need now is a new 100 seat aircraft payrate that works. Do you have that yet?

 

[80drvr]

No, but I may be underestimating the return to profitability. You guys did a really good job of saving the company. Maybe it was enough. All you need now is a new 100 seat aircraft payrate that works. Do you have that yet?

Yes, we have a 100 seat pay rate. If you're asking about an E-190/195 pay rate, it's kind of tough to negotiate a pay rate on equipment that the company states they have no interest in. Even if AA ordered them today, it would be 2-3 years before we would see a delivery. Given that, it would be foolhardy, IMO, to negotiate a payrate amidst the current industry climate and the few unacceptable wage comparisons such as Jet Blue that currently exist.

 

[FlyBoeingJets]

American has the best shot at making it work. At least the analysts think so.

 

[Machdog1]

And ACA is the bad guy for leaving United, yeah right!!!!

Sorry whiskey good luck!!

 

[superrav]

why didnt they just invest in United....

 

[AA717driver]

Yeah, ARW has been loyal to UAL--despite being whipped like a dog. The worst thing that happened to ARW was the day they signed their code share way back in the 80's.

Sorry guys.TC

ARW F-27 11/87-12/88

 

[cheezflyer]

Invest In WHAT!!!!!!

why didnt they just invest in United....

Our investment was never asked of employees. Our company(AWAC) saw the writing on the wall. And found a quickfix,Nt really the best but a way to keep the employees working. I am going to SWA in a few days but feel no one especially mainline guys @AA orUAL or anywhere should bad mouth what happened. If you are that insecure about your jobs tell your Parent company to quit giving out the flying to the lowest bidder. They are the ones killing the industry, not the RJ drivers. We only do what our company asks of us, and was FAR/CONTRACT legal. The rst is up to your company GIVING the flying, they are the ones taking food from your babies mouths,not the RJ driver making $30!!!!

 

[WhiteCloud]

why didnt they just invest in United....

Because it would be a bad investment. United is going out of business.

 

[AA717driver]

Cheeze flyer--I can badmouth this deal as long as I want to. ARW was a great place to work prior to the UAL codeshare. You were probably in grade school when that happened. ARW had the first "regional jets". They were called BAC-111's.

Learn your regional history. Tony K. can vouch for this. He was there for all of it.TC

 

[YellowLab]

When are all the pilots going to stop blaming each other, United pilots have no more control of the decision then the Air Wisc pilots do. I seem to remember walking the informational picket line for AWAC (as a United Pilot) back in 01. So AWAC pilots shouldn't blame UAL pilots for the decision. I don't blame the AWAC pilots when they wouldn't hire me after I was furloughed. It's time to look forward not back.

 

[crashpad]

When are all the pilots going to stop blaming each other, United pilots have no more control of the decision then the Air Wisc pilots do.

I think the animosity rests in the efforts to provide quality, efficient and affordable service by AN ALPA CARRIER were completely disregarded by UAL for Walmart quality carriers...All without a peep from the mighty UAL ALPA brethren. Remember those guys? They ask for your ALPA card when you jumpseat, check the 'black book' to ensure no scabs board, and preach how we need to take care of eachother.

Pilots? Management? You all look alike to me.

 

[WhiteCloud]

I think the animosity rests in the efforts to provide quality, efficient and affordable service by AN ALPA CARRIER were completely disregarded by UAL for Walmart quality carriers...All without a peep from the mighty UAL ALPA brethren. Remember those guys? They ask for your ALPA card when you jumpseat, check the 'black book' to ensure no scabs board, and preach how we need to take care of eachother.

Pilots? Management? You all look alike to me.

That pretty much sums up my feelings towards UAL pilots and ALPA as a group. They sit idly by (again....as a group)while union flying is replaced by non union flying on their own property. We all know that there are many individual pilots at UAL that feel the same way and that individual pilots have no power to act on their own. So.....I have no hard feeling towards any individual but....as a group they can all [verb] my [body part].