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US Airways' Siegel says Delta to use cash to outlast competitors
Dateline: Tuesday February 25, 2003
US Airways Group CEO David Siegel told employees that he believes that Delta Air Lines has broken ranks with the rest of the industry over the issue of government aid because it intends to use its superior balance sheet and liquidity to outlast network rivals.
In a recorded message, Siegel said that with the exception of Delta, the industry is "fairly unified" in terms of what it intends to ask of the government in the face of an impending war with Iraq that is impacting revenues severely. He continued, "I believe Delta is taking a different approach here, not trying to address their core problems through restructuring but rather play a waiting game with a superior liquidity position in hopes that we fail and that solves their problems."
The rest of the industry, however, is prepared to tell the government it is in "crisis," Siegel said. "We cannot afford to take on any new unfunded security mandates or antiterrorism insurance requirements."
Airlines will continue to press Secretary of Transportation Norman Mineta to maintain war risk insurance coverage, he added. And the industry is continuing to examine all fees and taxes collected and paid for by airlines and passengers to determine what relief might be available as it faces a liquidity crunch "like it has never seen before."
Additionally, the industry hopes Secretary of Energy Spencer Abraham will draw upon the Strategic Petroleum Reserve, according to Siegel, to help avoid interruption of the jet fuel supply and mitigate fuel prices. US airlines also want the Transportation Security Administration to perform all passenger and property screening and pay all associated costs, he said.
Dateline: Tuesday February 25, 2003
US Airways Group CEO David Siegel told employees that he believes that Delta Air Lines has broken ranks with the rest of the industry over the issue of government aid because it intends to use its superior balance sheet and liquidity to outlast network rivals.
In a recorded message, Siegel said that with the exception of Delta, the industry is "fairly unified" in terms of what it intends to ask of the government in the face of an impending war with Iraq that is impacting revenues severely. He continued, "I believe Delta is taking a different approach here, not trying to address their core problems through restructuring but rather play a waiting game with a superior liquidity position in hopes that we fail and that solves their problems."
The rest of the industry, however, is prepared to tell the government it is in "crisis," Siegel said. "We cannot afford to take on any new unfunded security mandates or antiterrorism insurance requirements."
Airlines will continue to press Secretary of Transportation Norman Mineta to maintain war risk insurance coverage, he added. And the industry is continuing to examine all fees and taxes collected and paid for by airlines and passengers to determine what relief might be available as it faces a liquidity crunch "like it has never seen before."
Additionally, the industry hopes Secretary of Energy Spencer Abraham will draw upon the Strategic Petroleum Reserve, according to Siegel, to help avoid interruption of the jet fuel supply and mitigate fuel prices. US airlines also want the Transportation Security Administration to perform all passenger and property screening and pay all associated costs, he said.