ATSB grants UAIR ext till 6/30

[lowecur]

It's a done deal. All that remains is the IAM vote. Congrats to everybody at UAIR. Lakefield infers the GECAS deal is sealed.

Press Release



Source: US Airways Group, Inc.
US Airways and ATSB Reach Agreement That Provides Operating Cash Through June 30

Thursday January 13, 7:35 am ET

Agreement Coincides with Plans for Emergence from Chapter 11

CEO Calls Announcement a 'Huge Boost' for Customers, Employees and Vendors


ARLINGTON, Va., Jan. 13 /PRNewswire-FirstCall/ -- US Airways Group, Inc. and the Air Transportation Stabilization Board (ATSB) have reached an agreement that extends the airline's use of cash proceeds from its federally guaranteed loan through June 30, 2005, paving the way for the airline to continue operations while it completes its restructuring and planned emergence from Chapter 11 this summer.

The company has been operating with the use of ATSB cash collateral since its Chapter 11 filing on Sept. 12, 2004. An initial agreement was extended until Jan. 15, 2005, and the new extension will be presented to the U.S. Bankruptcy Court for the eastern district of Virginia for approval at a hearing today.

"This long-term extension is a huge boost for our customers, employees and business partners, as we work to complete our transformation into a low-cost airline," said Bruce R. Lakefield, president and chief executive officer of US Airways. "Our customers should book us with confidence, knowing that we have sufficient cash to operate as well as to implement the many changes that are already under way. For our employees, this extension conveys that their sacrifices are an investment in the company's future, as we demonstrate to the ATSB and others that we are working hard to be a competitive and successful airline. And for our vendors and business partners that have been working with us throughout this restructuring, this agreement is a signal that those efforts are well worth it, as we will remain a player in the industry."

Details of the agreement will be filed with the court. The provisions are consistent with the previous agreement with the ATSB as well as the company's agreement with the General Electric Capital Aviation Services (GECAS), that it maintain minimum weekly cash balances and sufficient liquidity. Achieving these cash requirements is dependent on the company securing the cost savings in the proposals made by the company last week to the International Association of Machinists (IAM), either through ratification of the proposals by IAM members or by implementing the Bankruptcy Court's Jan. 6, 2005, decision that rejected the IAM labor contracts. Ratification for the three separate IAM workgroups is to conclude on Jan. 21, 2005.

"We have worked very closely with the ATSB to provide them with solid information and assurances about the progress we have made in our restructuring. Securing the GECAS agreement on aircraft financing and labor cost reductions were significant milestones," said Lakefield. "Those achievements, in combination with the ATSB's collateral holdings and the management team's laser focus on keeping this restructuring on track, provide the platform for the nearly six-month extension that is an important confidence builder so that customers can book us as they normally would -- especially during the spring, which is traditionally our most profitable season.

"While we still have much work to do, I think our most difficult period is behind us and my sense is that our employees are united in working with us to complete the restructuring," said Lakefield. "This extension essentially builds us the necessary runway for a take-off this summer. In the meantime, we will continue to work closely with the ATSB so that they remain informed and supportive of our efforts."

 

[Bill Nelson]

that is great news! I love to see our hard earned tax money thrown away. They could have at least donated it to tsunami victims or 911 victims. If we are going to give the money away, give it to somebody with a future. Unfortuntely, US Air will be able to burn through most of our tax cash before the fold up shop in June.

Good news is that US Air mgt. has enough time to ask for more concessions. (that is if any of them are still around. they are taking their bonuses and moving on to airlines with a future)

 

[lowecur]

that is great news! I love to see our hard earned tax money thrown away.

Weren't you convicted of tax evasion?

 

[tk855]

The bankruptcy court has to approve this agreement today (thurs). I really hope the judge sees this for what it is worth and does the right thing. This is starting to get frickin ridiculous. Even the dumbest cowboy knows when it is time to ride the horse out to the pasture for the last time!!


tk

 

[Guitar Guy]

I feel sympathy for the employees of USAir who fear for their jobs and income, such that it may be. But I think the ATSB and the bankrputcy judge are missing how much damage the protracted bankruptcies of USAir and United are doing to the airline industry as a whole. I find it sadly ironic that the ATSB was set up to help the airlines in the wake of 9/11 is now propping up companies that are dragging down the rest of the industry.

I really do wish well for the employees at USAir and United but I think it's time to let the market dictate its own future without outside interference.

 

[bafanguy]

... let the market dictate its own future without outside interference.

GG,

Isn't that what's called "deregulation" ? I seem to remember something about "deregulation", but 1978 was so long ago....

 

[321 busdriver]

Hey GG, As a USAir guy with 19 years, a family, a ridiculously low income, not to mention no pension...just exactly how are we dragging down the entire industry? As a citation driver, I'm sure we've really impacted your lifestyle in particular. While it is true that poor management, infighting, and misguided union mentalities have all played a roll, the same type of thinking would have had you pouring dirt on CAL and AWA. As the divorce and potential suicide rates trickle upwards, try to show some feeling and respect towards our airline and pilots in particular who have sacrificed so much. As for 9/11 and the ATSB, no one airline was as impacted as USAir with the restrictions placed on us at DCA and LGA.

I feel sympathy for the employees of USAir who fear for their jobs and income, such that it may be. But I think the ATSB and the bankrputcy judge are missing how much damage the protracted bankruptcies of USAir and United are doing to the airline industry as a whole. I find it sadly ironic that the ATSB was set up to help the airlines in the wake of 9/11 is now propping up companies that are dragging down the rest of the industry.

I really do wish well for the employees at USAir and United but I think it's time to let the market dictate its own future without outside interference.

 

[Guitar Guy]

GG,

Isn't that what's called "deregulation" ? I seem to remember something about "deregulation", but 1978 was so long ago....

I was pretty young in 1978. I think you need to ask Alfred E. Kahn about deregulation.

 

[fam62c]

This has gotten way out of hand!

What was the point of deregulation in the first place if the government is going to subsidize failing carriers and keep everyone in business? The whole industry is going to fall apart if the most inefficient and poorly managed airlines are protected to the point where they simply can't fail. The solvent carriers are being punished and the weakest carriers are being rewarded.............there's a formula for a healthy industry.

 

[Rez O. Lewshun]

I was pretty young in 1978. I think you need to ask Alfred E. Kahn about deregulation.

Rather Lorenzo and Bakes

 

[merikeyegro]

U is dragging down the industry like this:

- BK court allows certain bills NOT to be paid to allow more operating cash
- U uses lower operating costs to cut fares and try to gain market share (and lose more bags, coincidentally)
- Other airlines have to follow suit, cutting their revenues
- Now, you have multiple airlines losing money - U already was but is helped by BK laws, others that might otherwise do well can't because of the downward fare pressure
- As a side note, BK court keeps allowing U to cut wages, furthering the carnage. It is now harder for these people to make rent/mortgage, bills, and car payments. They spend less in the local and destination economies. Not to mention the piss-poor intangibles that come with it - morale, depression, etc.

For a group of supposed Republicans on this board, there sure are a lot of people arguing FOR gov't support/subsidization of business. For God's sake, even Canada and Europe have all but stopped propping up their airlines and even have privatized ATC. Why are we arguing for socialism? Reagan is rolling over in his grave. Heck, I'm getting pissed...and I'm not a Republican.

Truth is that gov't control/influence of BUSINESS is never a good idea. Wages and standard of living will ALWAYS decrease if this happens. Just look around and tell me which of you is better off today than you were 4 years ago. I know there is more to it than U/UAL/ATA going BK, but they and their cohorts at the ATSB (which should be dissolved, should it not?) are certainly making it worse. Heck, each of you at U might even find something better to do with your time if your company and the gov't would just turn off the lights. You're in too deep a hole to climb out without my tax dollars. Sorry, it's the blunt truth.

 

[100LL... Again!]

Let it die. The taxpayers should not have to front this already dead airline.

 

[Guitar Guy]

Hey GG, As a USAir guy with 19 years, a family, a ridiculously low income, not to mention no pension...just exactly how are we dragging down the entire industry? As a citation driver, I'm sure we've really impacted your lifestyle in particular. While it is true that poor management, infighting, and misguided union mentalities have all played a roll, the same type of thinking would have had you pouring dirt on CAL and AWA. As the divorce and potential suicide rates trickle upwards, try to show some feeling and respect towards our airline and pilots in particular who have sacrificed so much. As for 9/11 and the ATSB, no one airline was as impacted as USAir with the restrictions placed on us at DCA and LGA.

I think you've partially misunderstood me. I really do feel for the people at your company. And as for the suicide rate, I've lost a family member to that, so I do understand suicide unfortunately very well.

By the way, I was very involved in the 121 world. I worked for a major for over 5 years in a technical capacity. Prior to that, I was an engineer for Boeing. After those experiences, I flew for a regional.

CAL and AWA, in particular, have reacted to the changing conditions of the 121 world. I think what the airline market place needs is a level playing field where all carriers can compete and ticket prices can come to a level that makes business sense. Having the government subsidize carriers, either directly through the ATSB or through BK court proceedings, isn't fair to those companies without such advantages.

Trust me, 321 busdriver, I do feel for the situation of you and your co-workers. I include you people in my prayers and will continue to do so. If USAir goes out of business, I truly do hope that you can find a new job.

 

[LearLove]

Guitar Guy,

"CAL and AWA, in particular, have reacted to the changing conditions of the 121 world. I think what the airline market place needs is a level playing field where all carriers can compete and ticket prices can come to a level that makes business sense. Having the government subsidize carriers, either directly through the ATSB or through BK court proceedings, isn't fair to those companies without such advantages."

That is what the govt. is allowing U to do. While it looks like their floating U for another 6 months to us its letting us "reinvent" ourselves as a LCC to compete in the post 9-11 airline industry.

Many around here seem to think that if one of the legacy carriers goes away that things will get better. We'll I don't think so. I think that would be a temporary fix. I think that if U or UAL went away it may help for awhile until SWA and the other LCC's set thier sitghts on the the next victim. Then in a few years that carrier would be in trouble and so forth.

Look at history, Pam AM and Eastern going away (not because of LCC but other reasons) helped the industry in the mid to late 90's then we were in trouble again. I think that having a comapny that is adaptable to the changes in the industry is better than going away.

anyway just my opinion. I hope to be here flying out of PHL for 30 more years.

 

[Guitar Guy]

That is what the govt. is allowing U to do. While it looks like their floating U for another 6 months to us its letting us "reinvent" ourselves as a LCC to compete in the post 9-11 airline industry.

If that's what the government is trying to do, then why aren't other carriers being allowed to do that under federal protection? American isn't in bankruptcy protection in order to re-invent themselves and I don't believe Northwest is either.

I'm just curious what U's re-invention plan is. It seems like they are just cutting jobs, salaries, benefits and retirements while hoping to outsource a portion of their maintenance. Is there an actual plan? I'd be interested to learn more about it.

I do wish you and U the best of luck for the future, regardless of what that future is. These are definitely turbulent times.

 

[321 busdriver]

No problem GG, I can almost guarantee that this will be the last time the government will be willing to help and the last of the employee concessions. We will either reinvent ourselves as a lcc or we deserve to go away. I just think that we need the opportunity to adapt...something most of us here have seen coming for a long time. For some reason, our former management felt that if they just ignored all the problems (SWA, catering, cleaners, rude employees, etc.) then those problems would eventually just go away. SWA and JB prove that you can be very successful while having great job satisfaction. You just have to get everyone on the same page. I hope it happens here or else...see ya. I'm all for a level playing field but let's make it level (ie deferred lease payments for JB airbusses). 9/11 and a rudderless ship beat us up but we can't keep using that as an excuse. If we can't turn things around this time, feel free to say " I told you so". Ha,ha!

I think you've partially misunderstood me. I really do feel for the people at your company. And as for the suicide rate, I've lost a family member to that, so I do understand suicide unfortunately very well.

By the way, I was very involved in the 121 world. I worked for a major for over 5 years in a technical capacity. Prior to that, I was an engineer for Boeing. After those experiences, I flew for a regional.

CAL and AWA, in particular, have reacted to the changing conditions of the 121 world. I think what the airline market place needs is a level playing field where all carriers can compete and ticket prices can come to a level that makes business sense. Having the government subsidize carriers, either directly through the ATSB or through BK court proceedings, isn't fair to those companies without such advantages.

Trust me, 321 busdriver, I do feel for the situation of you and your co-workers. I include you people in my prayers and will continue to do so. If USAir goes out of business, I truly do hope that you can find a new job.

 

[dlredline]

. . . try to show some feeling and respect towards our airline and pilots in particular who have sacrificed so much.

I think you'll find everyone here holds the pilots of USAirways with the utmost respect, all the while sympathizing with their plight. The same cannot be said for the airline, or the judge and ATSB that enables this mismanagement.

Red

 

[dlredline]

. . I'm just curious what U's re-invention plan is.

I'm wondering the exact same thing.

 

[321 busdriver]

I think the ATSB is doing what it was originally designed to do... that is, help ( not save) those airlines most effected by 9/11. Without 9/11, the former management would still be floundering around trying to figure out how to make an airline run. That said, with 9/11 and no help from the ATSB...this airline dies. I think we deserve every opportunity to make things happen here. A failed USAir and an additional 3600+ qualified guys on the street is not the answer. If we fail to survive here in the 11th hour, so be it. We at least should get the opportunity to go for it on 4th and 1. ps great game. being a pac-10 guy, the rose bowl is always my favorite game. got to take it out on OU.

I think you'll find everyone here holds the pilots of USAirways with the utmost respect, all the while sympathizing with their plight. The same cannot be said for the airline, or the judge and ATSB that enables this mismanagement.

Red

 

[skykid]

- BK court allows certain bills NOT to be paid to allow more operating cash

Could you list the certain bills that don't have to be paid? Anybody? I'm not trying to be a wise a$$, but I would like to compare that list to the massive legal fees U has to pay while in Ch11 in order to make a more educated analysis of the assumed competitive advantages.

You're in too deep a hole to climb out without my tax dollars.

I think a lot of people are assuming the ATSB is not going to get their money back, one way or the other. As I understand it they have already been repaid $300mil. Since you seem to know how much the ATSB would be stiffed in a possible liquidation, how about sharing that and telling us how you know? I'm curious.

I find it sadly ironic that the ATSB was set up to help the airlines in the wake of 9/11 is now propping up companies that are dragging down the rest of the industry.

Guitar Guy,

Besides U, which companies is the ATSB propping up? Are you refering to the two cash handouts ALL airlines received, regardless of the level of damage caused by 9/11? Thankfully the people on here complaining about government handouts work for airlines that turned the money down. Right?

You say U is dragging down the industry, another way to look at it is they are being forced to align with the new industry standard. For example, neither Southwest, Airtran, JetBlue, or Frontier has the defined pensions U has dumped. You can argue all day about who is dragging who down, it is not constructive and I could care less. If there is any way for the USAir guys to keep their jobs AT USAir, I hope it can be done!