Ge Strikes New Deal With Uair

[lowecur]

USAIR will get immediate access to $140M bridge loan, delivery of 31 leased 70-90 a/c(probable mix of 170's/190's) from GECAS in the next 3 yrs in exchange for a convertible note between $125M- $216M (dependant if they lease more 70-90 a/c) upon successful emergence from Chapt 11. UAIR must return 15 733's and 10 319's to GECAS as part of the deal. It will also save them around $80M from existing expenses. This should tide them over until decision can be made on the contracts. For all you non-believers, a real proven endorsement as to their future.


http://biz.yahoo.com/prnews/041126/nyf010_1.html

 

[reepicheep]

What I noticed is that they're eliminating 25 mainline aircraft in exchange for 31 Sj's. These will almost surely be 90-seaters to MDA that will probably pay around $60 for the left seat. Good bye to 350 or so mainline jobs. And, so much for the much-ballyhood "maintain 281 mainline aircraft" plan that ALPA has been crowing about.

 

[LearLove]

From www.usairways.com

US AIRWAYS, GECAS, AND GEES REACH AGREEMENT ON
AIRCRAFT FLEET AND FINANCING PACKAGE

Airline Would Gain Short-Term Liquidity, Aircraft Debt Service and Lease Savings,Regional Jet Leasing, and Preserve Vast Majority of Existing Fleet

ARLINGTON, Va., Nov. 26, 2004 [font=Arial,Helvetica,Geneva,Swiss,SunSans-Regular][/font][font=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]-- [/font][font=Arial,Helvetica,Geneva,Swiss,SunSans-Regular]US Airways Group Inc., GE Capital Aviation Services (GECAS), and GE Engine Services (GEES) have reached a comprehensive agreement on aircraft leasing and financing, and engine services, which will provide the airline with short-term liquidity, reduce debt, lower aircraft ownership costs, enhanced engine maintenance services and leases for new regional jets, while preserving the vast majority of US Airways’ mainline fleet owned by GECAS.[/font]

If approved by the U.S. Bankruptcy Court and all conditions are met, the transaction will provide US Airways with $140 million in interim liquidity through a new bridge facility and the deferral of aircraft debt and lease payments coming due over the next six months. In total, US Airways expects the agreement to provide over $80 million in annual cash savings and aircraft ownership and engine maintenance costs. In addition, GECAS will lease up to 31 new 70 and 90-seat regional jet aircraft to US Airways over the next three years, and US Airways would return 25 of its 281 mainline aircraft over the same time period. The agreement calls for the return of 10 Airbus 319s in 2005, and 15 Boeing 737-300s in 2006 and 2007.

In exchange for these significant commitments by GECAS and GEES, upon successful emergence from Chapter 11, US Airways would issue to GECAS a 15-year convertible note for between $125 and $216 million, depending on future lease options selected by US Airways.

The agreement was filed with the U.S. Bankruptcy Court of the Eastern District of Virginia today and requires court approval by Dec. 17, 2004. In addition to court approval, the agreement requires that by Jan. 14, 2005, the company achieve a series of cost reductions and restructuring milestones, and it must complete its judicial restructuring and exit Chapter 11 by June 30, 2005.

“The fact that GECAS remains committed to working with us is an enormous boost for our restructuring efforts and the implementation of our Transformation Plan,” said Bruce R. Lakefield, US Airways president and chief executive officer. “We still have a lot of work to do, beginning with the completion of labor negotiations with those remaining unions that still do not have cost-savings agreements in place.

“In the short term, we can return the 10 Airbus aircraft in 2005 on a schedule that will not impact our customers and will be consistent with our plans to increase aircraft utilization and point-to-point flying next year. The gradual return of 15 older 737-300s over the next three years, coupled with the regional jet financing agreement, will allow us to return to a path of moderate regional jet growth, enabling us to effectively serve smaller routes or develop new markets,” said Lakefield.

 

[chperplt]

The agreement was filed with the U.S. Bankruptcy Court of the Eastern District of Virginia today and requires court approval by Dec. 17, 2004. In addition to court approval, the agreement requires that by Jan. 14, 2005, the company achieve a series of cost reductions and restructuring milestones, and it must complete its judicial restructuring and exit Chapter 11 by June 30, 2005

Is this likely??

 

[Yahtzee]

USAIR will get immediate access to $140M bridge loan, delivery of 31 leased 70-90 a/c(probable mix of 170's/190's) from GECAS in the next 3 yrs in exchange for a convertible note between $125M- $216M (dependant if they lease more 70-90 a/c) upon successful emergence from Chapt 11. UAIR must return 15 733's and 10 319's to GECAS as part of the deal. It will also save them around $80M from existing expenses. This should tide them over until decision can be made on the contracts. For all you non-believers, a real proven endorsement as to their future.http://biz.yahoo.com/prnews/041126/nyf010_1.html

Lowecur,

I have to ask you a few simple questions. I hope you don't mind answering them.

Do you own USAirways stock? If yes, what is your avg price per share? If not, why not?

Yahtz

 

[328dude]

Embrear dosen't want to play ball with US Airways, hence no EMB's for now. Bombardier dosen't have a problem with these terms and some more 701's will return to PSA in a month or so.

Probably be an announcement this week about it.

 

[lowecur]

Lowecur,

I have to ask you a few simple questions. I hope you don't mind answering them.

Do you own USAirways stock? If yes, what is your avg price per share? If not, why not?

Yahtz

No. You never buy a stock that is in Chapt 11. The chances are it will be retired, and rendered worthless. I own very few airline stocks. I do own a few thousand shares of AAI that I bought in the low single digits a while back. Jetblue for instance is still very expensive, but I will buy some probably in the first or second quarter if it gets cut in half on the up and coming losses they will take.

 

[lowecur]

Embrear dosen't want to play ball with US Airways, hence no EMB's for now. Bombardier dosen't have a problem with these terms and some more 701's will return to PSA in a month or so.

Probably be an announcement this week about it.

The 701's will probably be the 70 pax planes that GECAS just agreed to lease to UAIR as part of their new agreement.

 

[Yahtzee]

Lowecur,


Thanks for the response.

 

[Yahtzee]

Lowecur,

Here's what I really meant to say....

Thanks for the response and the stock advice. I wasn't looking for the latter given my background (a degree in finance and several years experience as a cost analyst who crunched numbers for a living.)

In your original post on this thread, I noticed an interesting choice of words...

For all you non-believers, a real proven endorsement as to their future.

I inferred you are a believer in US Airways with such a statement and thought you might have bought shares of US Airways a while back and were simply hoping, waiting. That is why I asked if you owned US Airways stock.

As for why I asked "Why or why not", I was merely trying to determine your sincerity of "believing". You imply you believe in US Airways, but you neither work there nor have an investment in the company. So does that make you a "true believer" or a "make believer”?

I'm not trying to mean-spirited, but rather understand what your interest in US Airways is other than your "Shares of ERJ".

Are you are hoping US Airways stays in business simply to "support" your EMB stock? If so that is sad.

Unfortunately for the employees and their families, this battle has been lost and there is nothing a bankruptcy judge or the employees can do to save this company. This is sad, but to imply you are a "believer" when you have no dog in the fight other than your stake in ERJ is pathetic.

Those lease payments are coming due, and the bankruptcy court will not give immunity for long.

US Airway's costs are too high and they do not have en effective plan to compete in this business. If they exit 11, it will be a result of snake-eyes not a miracle….Jan most likely.

Yahtz

 

[lowecur]

Yahtzee:

Yes, my main reason for wishing UAIR well was their investment in the E-series. Will UAIR's failure or success make or break the ERJ stock?....No! Do I feel bad for the past and present employees?....Yes! Do I think the airline will eventually make it and thrive?....Yes.

That all said, I still like to make my analcyst prognotications. I'm a bit of a contrarian, and if I see a mgt pattern forming that I like, I will offer my thoughts. In a perfect world everyone would survive and flourish. Unfortunately, that will never by the case, so I can only hope those that are less fortunate are blessed in the future.