ATSB grants UAIR ext till 6/30

[LearLove]

CBS MarketWatch: 7 minute radio talk, good info.....

http://www.marketwatch.com/tvradio/playerfull.asp?siteid=yhoo&dist=yhooBB&guid=%7B9C725160%2D10F6%2D483E%2D8BFE%2D5821F27A61B6%7D

 

[dlredline]

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 touched on a couple of key items many have problems with here. First, "the former management would still be floundering", confirming the weakness that already existed at USAirways pre-9/11. The terrorist attacks, along with the LGA/DCA shutdowns merely accelerated the decline they already were in. Second, that the ATSB was created to "help ( not save) those airlines most effected by 9/11". Many would agree, following the first bankrupcty. But a second filing, within 2 years of the first, simply doesn't pass the smell test of "stabilizing" a carrier effected by 9/11, a full 3 1/2 years and multiple management teams later.

If there was a plan of action (absent solely obtaining labor concessions) on just how USAirways intended to transform themselves, you'd see a lot more sympathy for the carrier (notice I said "carrier", 'cause our true sympathies continue to lie with each and every pilot/employee effected). Lakefield saying he wants to be a SWA/JetBlue hybrid doesn't automatically make it so. Even if IAM concedes their latest contract offer, USAirways CASM's are still north of .10/sm, not near competitive enough by their own CEO's (and former CFO's) stated standards. And with a planned "exit" of BK publically announced in June, that's only 5 months from now. What is the plan going forward? Just how does Lakefield intend to plug all those revenue holes (fleet mix and utilization; LCC incursions in PHL, PIT, CLT, FLL; not to mention reparation of employee morale). And exactly where is the DIP/exit financing suppose to come from, and at what additional cost to their already fragile bottom line, and will the credit market even respond in time for the June save?

There are simply too many questions regarding the survivability of this carrier to warrant the millions at risk in taxpayer $$. I said it previously, but I would gladly support a viable plan if one was presented publically and enthusiastically supported by the credit markets and employee groups. Unfortunately, that has yet to happen.

I do wish you the best, 321. After reading your posts, somehow I think you'll land on your feet fine irregardless of what happens.

Red

 

[oldxfr8dog]

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.

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.

s.

What exactly is different about the "post 9-11 airline industry"? Some increased security costs, but isn't that across the board for all carriers?

Sounds like you think the legacies have been "victimized". I think if you look back, more start-ups have been crushed by the legacy carriers, than vice versa.
Who determines the winners and losers? The Legacies? The LCCs? The Government?
The CUSTOMER, plain and simple. Give them a choice and THEY decide.
When you artificially prop up the noncompetitive companies again and again it isn't fair to the ones that are playing by the rules of the free market.
Not looking for a fight, I have been furloughed from 121 carriers three times in my career. Keep your chin up, though; Something better always came from it.

 

[oldxfr8dog]

<I'm all for a level playing field but let's make it level (ie deferred lease payments for JB airbusses).>

No, it's even better than THAT! They're FREE! So's the GAS!

I can't believe you are using that internet myth to defend your argument...

But, let's say it WAS true. It would be a negociated deal between two businesses. U would be free to compete for those same contracts, no? And from a much stronger position than a start-up without airplanes or even a name. How is that not level?

 

[FlyFastLiveSlow]

While I sympathize with the employees of USAir, why should the tax revenues from profitable companies be used to subsidize their competition? And why should MY tax money be used to subsidize a company that competes with mine? Enough is enough. This is nothing more than corporate welfare.

 

[skykid]

FlyFastLiveSlow,

What program is subsidizing U right now? Are you talking about the ATSB loan GUARANTEE, or the cash that every airline got?

 

[AirBoard]

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.

AMEN!!!!!!!!!! I feel like I'm living in Soviet Union circa 1960.

 

[Bill Nelson]

How much money did SWA get after 911?

 

[skykid]

Willy, that's a good question, and I don't know, but every airline from American to Vanguard got CASH, twice. Just like the USSR, huh Airboard? The ATSB loan GUARANTEE to U contains $00.00 taxpayer money, and my guess is the ATSB would get their interest covered with a default. Anyone who knows better should back it up with facts.

 

[lostplnetairman]

The ATSB guaranteed loan was backed by cash. All the other assets, planes, gates, slots, etc were pledged to other creditors. They were not allowed to spend the cash. That has been the reason for the need for the ATSB to grant extensions and allow them to spend down the cash. They are spending down the collateral for the loan. When there is nothing left, and if US Airways can't pay, the taxpayers are on the hook.


HR Diva

 

[Dizel8]

Actually, I believe they have to ask the ATSB to spend the ATSB loaned money.

As for this one:"The ATSB loan GUARANTEE to U contains $00.00 taxpayer money". Who do you think the ATSB is? They are a federal entity and as all such, the bills are paid by the taxpayer. If U were to default, shut down or otherwise be unable to pay the loan back, the taxpayer would indeed be footing the bill.

 

[skykid]

D8, I know exactly who the ATSB is. Their guarantee is covered with collateral in the form of assets that include a minimum cash on hand at U. You say the taxpayer indeed would be footing the bill, but I don't think you know that. Go ahead and post the insider details of the latest ATSB-U agreement if you have them.

 

[((7))]

ATSB-U agreement Loan details = Sucking US Taxpayer dollars. Burning US taxpayer dollars. Pissing away US Taxpayer dollars. I prepose that the next "details" of the ATSB-U agreement contain a subchapter which specifies that all Ignorant U reinvention followers be excluded from mandatory helmet laws. If they happen to strike their cranium upon a hard object it's very evident that no harm will be detectable to the "believers" hard head.

What is the REINVENTION plan? A new ATSB loan to cover the first ATSB loan?

 

[DDpaysoff]

Thanks for protecting the industry and the profession. WTF?

 

[skykid]

ATSB-U agreement Loan details = Sucking US Taxpayer dollars. Burning US taxpayer dollars. Pissing away US Taxpayer dollars. I prepose that the next "details" of the ATSB-U agreement contain a subchapter which specifies that all Ignorant U reinvention followers be excluded from mandatory helmet laws. If they happen to strike their cranium upon a hard object it's very evident that no harm will be detectable to the "believers" hard head.

What is the REINVENTION plan? A new ATSB loan to cover the first ATSB loan?

The ATSB never loaned U anything. They do oversee loan GUARANTEES, which they were extremely stingy with, and contain stringent terms to back up their guarantee. U and the ATSB just renegotiated their deal. Several folks on this board want to pretend the deal states that U doesn't have to worry about paying the lenders back. If you have that information, please post it. Here's what I have seen:

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.

I don't know if the ATSB will see that the lenders get all the money back that was guaranteed - neither do you. I don't know if U will survive, but it would be inconceivable for me to wish ill on them for what I think will be my own personal gain, which is the root of most of this talk, and you know it. I don't begrudge U the loan GUARANTEE, and I think it is a little hypocritical to opine about government welfare, when YOUR 121 operation received cash money from this same government organization. Just a different perspective.

 

[dlredline]

. . . The ATSB never loaned U anything. They do oversee loan GUARANTEES . . .

This is accurate in that the ATSB has no "funds" to loan, only the banks have that. However, the Board allows the banks to "loan" USAirways millions with the backing (read "guarantee") of taxpayer funds should USAirways default on the bank's "loans". The lenders would recoup any outlay based upon the Board's guarantee, so it's a no lose for them should U liquidate. A Chapter 7 fiiling would then place the ATSB, with the collateral of aircraft and parts, in the same line as the rest of the creditors committee (GECAS, Chase, Airbus, Boeing, ALPA, et al) for distribution of assets to fund their liability, all at the discretion of the overseeing judge and under applicable bankruptcy statutes ("ATSB Guarantee", Section 6.01). This does make the taxpayers, in essence, creditors in a long line seeking repayment in what would likely be pennies-on-the-dollar repayment. And the language of the ATSB guarantee itself says that "the Guarantee constitutes a guarantee of payment and not collection" (Section 2.02). If you'd like to read the entire document, here is the link:

http://www.treas.gov/offices/domestic-finance/atsb/guaragree.pdf

Where I also have trouble is with the requirement under the original Guarantee application (http://www.treas.gov/offices/domestic-finance/atsb/atsbapplication.pdf) where it requires (Section 4. B., i.-iv.) a complete accounting of their business plan and exit strategy and funding, which USAirways still does not have (plan or financing) since they are still in search of $250 million exit funding. Also read Section 4. G. that specifically ties the application (and eventual lending of $$) to the effects of 9/11. It's hard to believe USAirways' continued problems (which existed to a great degree prior to 9/11) still result from an event 3 1/2 years ago, particularly after filing bankruptcy for a second time in two years with it's 3rd seperate management team.

I, too, find it inconceivable to "wish ill will" on any individual at USAirways. I truly wish the best for all effected by this drama. But setting emotion aside, and looking strictly at the risk placed upon our tax dollars for backing a guarantee to an airline losing $1.3 million per day ($700 million in 2004) with no exit financing ($250 million required) and no exit plan, I think it's prudent to have concerns.

Red

 

[321 busdriver]

Hey skykid, I'm glad you cleard that up, because I was going to. thanks.

Willy, that's a good question, and I don't know, but every airline from American to Vanguard got CASH, twice. Just like the USSR, huh Airboard? The ATSB loan GUARANTEE to U contains $00.00 taxpayer money, and my guess is the ATSB would get their interest covered with a default. Anyone who knows better should back it up with facts.

 

[skykid]

dlredline,

Wow, an arguement with some logic and supporting material! The whole reason I jumped into this thread is I was tired of reading the misinformation. I don't think they will ever have an exit plan that work either, and I base that on my opinion that their route structure is severly flawed. I hope I'm wrong. Obviously neither you nor I know how much the ATSB would be left holding the bag for in a possible liquidation. Judging by the way the ATSB has acted with their guarantee authority, I'd bet they are in a good position.

 

[dlredline]

dlredline,

Wow, an arguement with some logic and supporting material! The whole reason I jumped into this thread is I was tired of reading the misinformation. I don't think they will ever have an exit plan that work either, and I base that on my opinion that their route structure is severly flawed. I hope I'm wrong. Obviously neither you nor know how much the ATSB would be left holding the bag for in a possible liquidation. Judging by the way the ATSB has acted with their guarantee authority, I'd bet they are in a good position.

Skykid,

Thanks, just trying to devoid emotion from the argument of the risks associated with the ATSB's decisions regarding USAirways. One thing to keep in mind: The cost savings provisions of the original "extension" still remain. In other words, should the IAM vote down the latest company offer Jan. 22nd (and there's considerable debate on other boards which way this will go), USAirways would likely be found in default of these provisions and the June 30th extension approved by Judge Mitchell and this latest relief would likely be revisited. A ratification by the IAM would certainly help their prospects getting to the June 30th date, but again, they still need to find $250 million exit financing somewhere (not a given), and they still need a plan to address all their operational concerns going forward. And they have less than 5 months to complete this.

Red

 

[goastar]

waste

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

Think of it as welfare, the money will be thrown away on some useless gov't program anyway. At least these people are working hard for it and not just taking a handout. I say give them more and take some away from the people who leech off society and do nothing for it!! Keep it up USAIR.