ATSB tips it's hand on UAIR

[lowecur]

Well it looks like the ol gunfighter will live to fight another day as I predicted. The ATSB has said the deal to extend the use of it's funds is just a matter of working out the details. They also need to come up with $100M in annual savings to satisfy the loan covenants for GE by weeks end. Look for GE to let them slide just as they did FLYi today. This airline is light years ahead of UAL in the transformation process. UAL just may end up the odd man out.

It's been a long hard fight, but those workers that want to build a new financial base for UAIR, will be rewarded as the airline will prosper in the not too distant future. Looks like those extra gates for SWA at PHL will be tough to come by.



US Air Seen Close to Deal for Financing

Monday January 10, 7:28 pm ET
By John Crawley


WASHINGTON (Reuters) - With big labor savings assured, bankrupt US Airways (OTC BB:UAIRQ.OB - News) is expected to secure new access to its only source of ready cash, an official with the government agency backing the airline's financing said on Monday.

The money is crucial for the airline to operate as it tries to restructure during its second trip through bankruptcy in two years. US Airways hopes to emerge from Chapter 11 protection by June 30.

Mark Dayton, executive director of the Air Transportation Stabilization Board, said in an interview the two sides continue to negotiate terms of an extension. "I don't think there's a question about getting to an agreement," Dayton said.

The current extension expires on Jan. 15. The framework for a deal must be in place before the airline's board meets on Wednesday. The company is scheduled to present its new financing plan to a bankruptcy judge on Thursday.

US Airways officials would not comment on terms the stabilization board might impose.

"We continue to have productive discussions with the (board) and we have kept them informed of the progress that we have made," said Chris Chiames, senior vice president of corporate affairs.

Still to be worked out, Dayton said, is the minimum cash requirement and the length of a new extension. The last extension was for three months and the next one could be at least that long.

Dayton said the stabilization board is looking at helping US Airways get through the winter, when revenues are typically at their lowest point.

The current extension approved in October by bankruptcy Judge Stephen Mitchell in Alexandria, Virginia, requires US Airways to have at least $550 million in cash at the end of this week.

The airline been meeting all its cash benchmarks since October, Dayton said.

The airline still owes more than $700 million of $1 billion in loans that were 90 percent backed by the government when issued in 2003 during US Airways' first trip through bankruptcy.

Any assets US Airways might be able to sell to raise money are tied up as collateral for the government loan guarantee, which is why the stabilization board has so much sway over the airline's immediate future.

The board was created after the 2001 hijack attacks, to back loans so struggling airlines could recover from the industry's worst-ever downturn.

Separately, US Airways is also looking to find $100 million in cash or new cost savings by week's end to satisfy terms of a financing deal with General Electric to defer aircraft lease payments and other debt.

The deal is considered crucial for the carrier's survival. GE (NYSE:GE - News) holds most of the aircraft leases at US Airways and is the carrier's largest creditor.

A GE spokesman could not be reached immediately for comment on whether the company would be willing to extend the time frame for US Airways to realize new liquidity.

US Airways is able to seriously pursue both the GE deal and an extension of its cash after winning concession agreements from key unions and securing permission from Judge Mitchell last week to throw out machinists' contracts to save money.

 

[Yahtzee]

Well it looks like the ol gunfighter will live to fight another day as I predicted.

Meanwhile 30 June 05 and the GE mandated exit from Chapter 11 looms...tick tock.

Q: Lowecur, where was Bruce Lakefield on New Year's day when the rest of the non-union employees were pitching in?

A: At his home in Florida. Besides the fact this company has more problems than a math book, the number one reason USAir will roll snake eyes soon as nothing to do with SWA, employees calling in sick, or a high cost structure: it's the complete and utter void of leadership by example.

Never ask your team to do anything you aren't willing to do yourself. Commander Lakefield should have learned this in the Navy but then maybe he must missed the day or two they discussed leadership at the Naval Academy.

P.S. My prediction: GE stock dips tomorrow like in did in Dec when they announced the decision to infuse cash.

 

[lowecur]

Meanwhile 30 June 05 and the GE mandated exit from Chapter 11 looms...tick tock. Do you think just maybe they have exit financing lined up? I think so.

Q: Lowecur, where was Bruce Lakefield on New Year's day when the rest of the non-union employees were pitching in?

A: At his home in Florida. Besides the fact this company has more problems than a math book, the number one reason USAir will roll snake eyes soon as nothing to do with SWA, employees calling in sick, or a high cost structure: it's the complete and utter void of leadership by example. In other words ol Bruce should have at least showed up to work that day. I agree.

Never ask your team to do anything you aren't willing to do yourself. Sorry, I just don't buy that mantra. There have been plenty of successful CEO's and mgrs that have had great success in this business without getting their hands dirty. I don't think you'll see Gary Kelly tossing bags like David Neeleman, but does that mean he's not a great leader? Commander Lakefield should have learned this in the Navy but then maybe he must missed the day or two they discussed leadership at the Naval Academy.

P.S. My prediction: GE stock dips tomorrow like in did in Dec when they announced the decision to infuse cash.

Well that's probably a pretty good bet.

 

[Space Wrangler]

yahtzee......


nice dawg........woof, woof, woof!!!!!!!!!

 

[Wiskey Driver]

Ok let see if I understand this correctly, they need $550 million by the end of the week. Ok GECap will gamble on that and loan the funds and they also need a $100million in cost savings. This is where it gets a little cloudy for me, just where does the 100mill in cost savings come from??? If the employees are asked for one more dime I would be amazed. They may as well work for free for good. Sometimes you have to let go and let God!!!!


WD.

 

[Yahtzee]

Never ask your team to do anything you aren't willing to do yourself. Sorry, I just don't buy that mantra. There have been plenty of successful CEO's and mgrs that have had great success in this business without getting their hands dirty. I don't think you'll see Gary Kelly tossing bags like David Neeleman, but does that mean he's not a great leader?

Two points to burst your flawed argument:

First, SWA isn't hemmerging like USAir and SWA isn't in dire need of real leader since we have a great one. Furthermore, GK's talents are spent effectively so he doesn't need to rally the troops' synergy. Real leaders do the right things. Pretenders do things right. And now just where does that leave Lakefield? Ouch...not in either category.

Second and more importantly, just how many of those successful CEO's and managers were at companies bleeding from every crevasse, near implosion, liquidation and pulled out of the nosedive by standing on the sidelines. Can you name even one? And please don't even think about thinking about typing "Lee Iacocca" Here's a glimpsh of his leadership:

It didn’t take long for Lee to figure out that Chrysler was in a state of emergency. There was a serious lack of communication, and there was no team work. Each department seemed to be working in a vacuum. He had to make some drastic decisions. He was forced to fire many of the executives.He also bargained with the union for cuts in salary and benefits. He tried to set up a partnership between Chrysler and Volkswagen, but Volkswagen realized how deep in debt Chrysler was and the deal fell through. Lee was not able to pull everything together and make it work. He had to go to the government to get Government backed loans. He reduced his salary to $1.00 per year to show that everyone at the company must be willing to sacrifice if their company was to survive. This again gives you an idea of his management style. He was able to understand the worker as well as the executives, and somehow pull them together. By 1983 Lee had Chrysler back on their feet, and on July 13, 1983 Chrysler paid back all their government loans. Lee made a public statement, “We at Chrysler borrow money the old fashioned way. We pay it back.”

Have you ever heard of the term MBWA? Well it works. Ask the Delta pilots how many times Leo strolled through Hartsfield’s concourses when they were losing billions…and I believe the current debt is now a staggering $20 B…with only $2B cash on hand…but that’s a different thread.

Sorry you may not “buy it”, then again, I'm guessing you've never worked anywhere that needed leadership so badly your life and livelihood depended on it. Ask any solider, sailor, airman or marine how much respect a leader gets when they truly lead by example. I've worked for folks that have lead by example and those who have served there own interest. When you're in the former position, there isn't a better way to earn the respect of your troops.

Last Christmas, my former C-17 squadron commander chose to fly over the holidays (into Iraq and Afghanistan) instead of staying at home and forcing another pilot from our squadron to take his spot and miss the holidays. That’s what you’re not buying…by the way he was an 0-6 select at the time and didn’t need to do this since he already had the respect of his troops…no he chose to do it. How do I know? I was with him on that trip and will never forget his example.

You’ll probably never understand, but here's a makeup chance for you in case you missed it. In the movie "Glory" there is a scene where the black soldiers are upset when they learn they are getting less $$ to serve in the Union Army than the white men and let their disapproval show. Matthew Broderick, as Col Robert Shaw, is confronted with a near mutiney as the black soliders begin to rip up their checks and show their anger. Shaw has to make a decision and does. Rent the movie to discover his actions, as my typing doesn't do the scene justice. Whether real or Hollywood, this is the type of leadership USAir so badly needs.

If Lakefield, Siegel, or any of the past managers (note I did not use “leader”) would do something so small, these employees, and investors might have a chance. Without leadership Lowecur, all hopes are lost.

And finally, as far as their financing goes if it is lined up... Trust me they're gonna need it.

Yahtz

 

[BeCareful!]

Yahtzee -

I agree that US Airways would be much better off with real leadership. There is something, however, that you might not be taking into account here; it's a game called "Good Cop, Bad Cop."

If you look at the vast, painful restructuring that has taken place here, in its entirety, you'll realize that one, two, maybe three "bad cops" would be needed to pull off such a feat. Dave Seagul, IMO, had worn out his welcome....he was used up because the employees wouldn't follow him anymore. Enter Lakefeild: a fresh voice, and with it a fresh new attitude. Ah, but we are tired of hearing his mantra, too. However, the "Transformation Plan" is nearly complete, so I expect they will use Lakefield to his logical exit point, the point where most employee groups are sick of his voice and of his concession demands.

Here's the trick: they are holding off bringing in a new "Knight in Shining Armor" until the tide has turned (if it in fact does, which I predict it will) and we are headed in a neutral or positive direction. That way, they can have a few years of good vibes with the new guy and maybe, just maybe, some profits that they can't help but to report to the world.

 

[lowecur]

Two points to burst your flawed argument:

First, SWA isn't hemmerging like USAir and SWA isn't in dire need of real leader since we have a great one. Furthermore, GK's talents are spent effectively so he doesn't need to rally the troops' synergy. Real leaders do the right things. Pretenders do things right. And now just where does that leave Lakefield? Ouch...not in either category. Well Jetblue isn't exactly hemhorraging, but David finds a way each week to put on his blue collar work shirt. So your philosophy is management doesn't need to get down and dirty unless there is a crisis? I don't buy either philosophy as a reason why a business is successful.

Second and more importantly, just how many of those successful CEO's and managers were at companies bleeding from every crevasse, near implosion, liquidation and pulled out of the nosedive by standing on the sidelines. Can you name even one? And please don't even think about thinking about typing "Lee Iacocca" Here's a glimpsh of his leadership: I think the two Geralds have done a good job without getting their hands dirty. Their respective companies are all making the necessary strides to be in a position to thrive eventually. I don't know his history, but did Gordon Bethune get in there and toss bags? Seems to me he did a very good job with a difficult situation.

If Lakefield, Siegel, or any of the past managers (note I did not use “leader”) would do something so small, these employees, and investors might have a chance. Without leadership Lowecur, all hopes are lost. Sorry, I don't put Lakefield in the same catagory as Siegel. Lakefield is what he is. He doesn't have any experience in running an airline, but he does bring a history of managerial success and integrity. He has great contacts on Wall Street, and these contacts will serve the company well in securing exit financing. Sometimes you learn as you go, and I think he has done an excellent job in implementing the changes at a deliberate speed. Remember, you can't just go into a company like UAIR and toss the blanket and hope the plates and silverware all end up in their proper place. The change must be a slow one by design so that you can properly manage the reduced RASM as you morph from a legacy carrier to an LCC. Eventually, the system will be in place to again grow RASMs.

And finally, as far as their financing goes if it is lined up... Trust me they're gonna need it. Not a problem.

Yahtz

.....

 

[side stick-n]

Do you think just maybe they have exit financing lined up? I think so.

That's gonna be one heck of a signature loan..............

 

[BLUE BAYOU]

If you don't want to rent the movie, Col Shaw rips up his own paycheck in the movie Glory... The scene I liked best was when he was trying to round up uniforms and shoes for his troops and confronted the lowly supply officer... or how he blackmailed a couple of crooked officers for putting his troops into action...

 

[lowecur]

That's gonna be one heck of a signature loan..............

It won't be just a loan my friend. It will be stock issued as they emerge from Chapt 11.

 

[Dizel8]

Worthless stock like the last time around!

 

[Yahtzee]

So your philosophy is management doesn't need to get down and dirty unless there is a crisis? Have you ever heard the phrase “Can’t see the forest for the trees”? It certainly seems to apply in your case. Leadership by example has nothing to do with getting down and dirty, tossing bags or turning wrenches. It is about earning the trust and respect of your employees, and not asking them to make sacrifices you wouldn’t make on an equivalent or even greater basis. If you ask your employees to work on a day off after a major management failure, yes management failure, then yes it means Lakefield should show up. Lakefield showing up to toss bags would have been symbolic if anything. The point I’m trying to make is he and his predecessors don’t have the trust or respect of his people. That’s what leading by example gets you. Lowecur, do you trust and believe in Lakefield? If not, do you expect the employees at USAir to believe in him? If you do, why aren’t you investing in them? Oh you're waiting for that new stock to be issued after 6/30.

I think the two Geralds have done a good job without getting their hands dirty. Their respective companies are all making the necessary strides to be in a position to thrive eventually.

Again…you are missing the forest for the trees. And please take a look at the debt that each of these companies have charged up in the past three years…it’s like having a neighbor with 20K in savings and 200K in credit card debt. I’m not saying they won’t, but it’s going be a long, long time before either Delta or American thrives. Are you buying AA and DAL too?

I don't know his history, but did Gordon Bethune get in there and toss bags? Seems to me he did a very good job with a difficult situation. And yes, GB turned CAL around but it wasn’t by sitting on the sidelines. Remember that point I made about leaders doing the right things. GC did the right things. “Worst to First” is a great story. At least GG understands MBWA and he is tying to earn the trust of his employees, but the damage done from Leo’s “A contract is a contract” attitude and the battle that followed will haunt DAL for decades.

Sorry, I don't put Lakefield in the same category as Siegel. Lakefield is what he is. He has great contacts on Wall Street, and these contacts will serve the company well in securing exit financing.

Q: Why on earth would anyone on Wall Street be willing to bet money on this company?

A: The people who make decisions to inject $$ into USAir don’t lose their own money if and when USAir tanks after all it’s not “their money” they are injecting but rather the shareholders…but they just might lose their job for making poor decisions.

Yahtz

P.S. GE was and is still down.

 

[BeCareful!]

P.S. GE was and is still down.
<<<<<<<<<<<<<<<<<<<<<<<<


Yeah, the whole GE portfolio depends on its GECAS unit and what it does with its capital investments.

rriiiiiight........

 

[dlredline]

. . . The people who make decisions to inject $$ into USAir don’t lose their own money if and when USAir tanks after all it’s not “their money” they are injecting but rather the shareholders…but they just might lose their job for making poor decisions.

Yahtz
. . .

A slight correction here: The people currently "injecting" $$ into USAirways technically ain't shareholders, but taxpayers! The ATSB is allowing a company losing $1.3 million per day (over $700 million in 2004 alone) to draw funds from a government backed loan approval to fund their continued operation. That backing comes from Joe-taxpayer, so we should all keep this in perspective when we cut our check to Uncle Sam on April 15th.

Red

 

[SWA/FO]

What is an 0-6?

 

[lowecur]

Have you ever heard the phrase “Can’t see the forest for the trees”? It certainly seems to apply in your case. Why because I don't buy into your reasoning. My you sure do know how to turn a phrase. Leadership by example has nothing to do with getting down and dirty, tossing bags or turning wrenches. It is about earning the trust and respect of your employees, and not asking them to make sacrifices you wouldn’t make on an equivalent or even greater basis. If you ask your employees to work on a day off after a major management failure, yes management failure, then yes it means Lakefield should show up. Lakefield showing up to toss bags would have been symbolic if anything. I agree he should have showed up. Would it have changed your opinion about him? Would it suddenly have given you reason to believe the employees are behind him? I don't think so! You are of the belief as many are on this board that this company should pay for it's past mgt mistakes by folding. The point I’m trying to make is he and his predecessors don’t have the trust or respect of his people. That’s what leading by example gets you. Lowecur, do you trust and believe in Lakefield? Yes, I do. If not, do you expect the employees at USAir to believe in him? If you do, why aren’t you investing in them? Oh you're waiting for that new stock to be issued after 6/30. Exactly


Again…you are missing the forest for the trees. There's that phrase again. And please take a look at the debt that each of these companies have charged up in the past three years…it’s like having a neighbor with 20K in savings and 200K in credit card debt. I’m not saying they won’t, but it’s going be a long, long time before either Delta or American thrives. Are you buying AA and DAL too? It's like turning a battleship around, it takes a long time.

And yes, GB turned CAL around but it wasn’t by sitting on the sidelines. Remember that point I made about leaders doing the right things. GC did the right things. “Worst to First” is a great story. Maybe you could enlighten me as to what he exactly did by not sitting on the sidelines. At least GG understands MBWA and he is tying to earn the trust of his employees, but the damage done from Leo’s “A contract is a contract” attitude and the battle that followed will haunt DAL for decades. But at least you have admitted he is a good mgr, and so is GA. See, you're coming around.



Q: Why on earth would anyone on Wall Street be willing to bet money on this company? Well that's what investment companies do.

A: The people who make decisions to inject $$ into USAir don’t lose their own money if and when USAir tanks after all it’s not “their money” they are injecting but rather the shareholders…but they just might lose their job for making poor decisions. That's correct, this is not a personal loan.

Yahtz

P.S. GE was and is still down.

Okay..

 

[Yahtzee]

P.S. GE was and is still down.
<<<<<<<<<<<<<<<<<<<<<<<<
Yeah, the whole GE portfolio depends on its GECAS unit and what it does with its capital investments.

rriiiiiight........

you forgot the in my post...which is the only way to indicate I meant this without a straight face. And I hope you don't actually believe I thougth GE was down due to the GECAS unit decisions. But to be fair with you, you don't know my background or anything about me. Unlike Lowecur, I was a professional "cost analyst" (not a financial analyst) before starting my flying career, have a finance degree, and own stocks of companies I believe in, including GE for over ten years.

And if you're waiting for your "knight in shining armor" theory to evolve, don't hold your breath. Those things might happen in college footballl when replacing legendary guys like Tom Osborne at Nebraska, but unlike college football, only a handful of the coaching staff and his assistants lose their jobs if the team gets a coach who can't live up to alumni and fan expectations. You better than anyone should know what is happening at USAirways isn't a game, and my heart does go out to you and your family. I don't mean to preach doom and gloom, but it's sad to see guys like Lowecur who preach "salvation is coming" and spread hope, yet have no dog in the fight. I may well be wrong, and Lowecur right. And if I'm wrong, I will admit I was wrong.

Furthermore this is one forecast I hope I do miss, as the it means jobs will be saved and people not put on the street. But as someone who spent years crunching numbers and advising decision makers on contracts valued in excess of 1B, and after serving under true leaders and under false ones and understaning the dynamics of both, I don't see it that way. No I see Chapter 7. The competition is too strong at the moment and USAirways waited too long to fix what at one time might have been smaller problems.

Reissuing stock if they emerge from Chapter 11, is not doing the right things...it's pretending. Who is the heck is going to buy it? Lowecur??? Institutional investors??? I want to see this list and make sure I steer clear these boneheads. The stock will be worthless..if not on opening day, shortly thereafter when the truth begans to manifest. What truth you ask??? The truth the company still has fundamental flaws, including a a total void of leadership, the complete absence of a business model that has a chance to succeed, and finally the confidence in their employees that they can succeed. If you're still flyiing for USAirways, my .02 is to put your eggs in other baskets.

Yahtz

 

[lowecur]

A slight correction here: The people currently "injecting" $$ into USAirways technically ain't shareholders, but taxpayers! A slight correction here: The people currently "injecting" $$ into USAirways are the banks that put up the cash. The ATSB is strictly just underwriting the loan. The only way the taxpayers lose is when the ATSB shuts the company down, liquidates to pay off the debts, and then what's left the taxpayer must pick up. To date, I don't believe The ATSB is allowing a company losing $1.3 million per day (over $700 million in 2004 alone) to draw funds from a government backed loan approval to fund their continued operation. That backing comes from Joe-taxpayer, so we should all keep this in perspective when we cut our check to Uncle Sam on April 15th.

Red

.....Red, I see Syracuse may sign the Defensive Coordinator from Texas as head coach. Good move?

 

[Yahtzee]

A slight correction here: The people currently "injecting" $$ into USAirways technically ain't shareholders, but taxpayers! The ATSB is allowing a company losing $1.3 million per day (over $700 million in 2004 alone) to draw funds from a government backed loan approval to fund their continued operation. That backing comes from Joe-taxpayer, so we should all keep this in perspective when we cut our check to Uncle Sam on April 15th.

Red

Red,

My comment was in response to Lowecur's statement the Lakefield was lining up investors to reissue stock. I'm well aware that the ATSB injected the cash...and in the event of Chapter 7...yes the taxpayers lose in addition to the loss of the USAirways employees.

Yahtz