RJ's and the WO's

[canadflyau]

From what I understand, ALG signed the TA that U wanted on the 11th hour before they filed for BK. But on Aug 24th after the lawyers went over it with a fine toothed comb, they (UGroup) rejected the TA they asked ALG pilots for. I heard the problem was the succesorship language. ALG succesorship language said if they were bought, sold, merged with anyone other than PDT, PSA, MDA, or U then the original contract would be intact in full. Any thoughts on this wierd turn of events....

Also, any court that would allow U to start purchasing SJ's before paying creditors would be a farse and would be going against standard practice at this point in the game. I think the Reuters article sited is the most accurate account, don't expect to see SJ's until the final stages of BK. my .02

 

[Beavis]

PDT's negotiated RJ rates as follows...

Under 50 seats -- PSA rates minus 3%. This is because we have a defined benefit/retirement program that PSA does not have, and wanted to keep that.

50 seat--

FO 1 - $20.00
5 - $31.37

CA 1 - $48.00
5 - $56.81

Mainline is also hosing PDT, reneging our TA agreement, which does agree to jets for jerks. Who knows now??? we were waiting for the vote, and now this breaks! We can only imagine why they would be adamant about us giving up our successorship clause. We already gave up our furlough protection. It looks like a sale to Mesa may be eminent.

 

[Sam Adams]

Rj s & Flow Though

By the time the W/O s get jets I'll be 50(Only in late 20s now) by the time I would flow though to mainline. I'll be 365 years old and dead six times over.

 

[d328pilot]

Well Sam, you might be right. But lets think about it for a second. We will be getting jets. It is only a matter of time. Believe me or dont believe me....your choice. If you look at it objectively, it makes sense. About the flow through. Every new hire will now have to come from a W.O. Lets look at the average mainline pilot. The guys about to be furloughed were hired as late as 1988. Assume that they were 30 at the time they were hired. That would leave them with only about 16 years left before retirement. Over the next 10 years there are going to be a lot of mainline retirements. They will have to find pilots to fly the airplanes and they have to come from the WOs. I think mainline shrinking is only going to be temporary. After the rjs come, mainline will expand again. It will take many years to happen but I think it will happen. I think it is hard for a lot of us to forget the oppressive former CEO (wolf). We have a new guy in charge and I have been impressed with what he has done so far. Read Bethune's (sp?) book about how he reorganized and saved Continental. It will look very familiar to what is happening at U now.

 

[dondk]

I think the WO's getting jets is a good thing, hopefully it will be sooner than later.

As a former WO guy the numbers here sound disturbing (amongst other things (pay)).

Anyway, U will have about 1300 on the street in a few months, the 3 WO's have combined about 1300 pilots.. That is 2600 pilots (being generous) that want to get to mainline.

Now U has eliminated about 100 jets recently. Even in a good situation of 4 SJ's a month (assuming 1 jet per month to each of the 4 WO's) it will take 2 years to get back those 100 jets, and how much longer before the lowest guy in the senority could even look at a flowthrough to mainline.

That is not even touching the fact that the staffing on the SJ's are less than the staffing on the 737, 757, DC-9, F-100, 767 that U got rid of.

I agree for the younger guys it looks great for a career at U, but at a price of years to flow through.

 

[dav8or]

50 and below will go to the wholly owned as long as financing can be found. Jets will only go to contract carriers if financing cannot be found. And as always, only to the participating J4J carriers.

CHQ did not sign the J4J but the main reason we won't get anymore U jets is that WE can't get the financing for them. With U in backruptcy no one wants to lend money until things look better. Our last 140 for AA was held up for a week because of the news there.

 

[d328pilot]

Incorrect. There are numerous investors willing to lend U money. Texas Pacific being one of them. In return they will get 3 or 4 seats on the board. I cant remember exactly how many. When Texas Pacific saved continental some years ago, They reported a 10 fold increase on their investment. They will probably get the same with U. I have herd many news reports that say the future for U is good. In fact, I have yet to hear one report where the expert said he thought U would not survive. (Hopefully economic experts are better than their aviation experts) They have a solid recovery plan and if I knew that I would get a huge return on my investment, I would give them some too. Oh, and if i had millions of dollars laying around.

On another note: The upgrade class at PSA scheduled for this month was to have 4 in it. It has been expanded to 6 and the Oct class will have 8 upgrades in it. good sign

 

[hellas]

The main reason we are not getting jets for U is only because we did not sign up for J4J and if you believe that CHQ has trouble financing then I know at least 1 CHQ employee who will sign any contract that is put before them..... Dont beleive BB's hype. J4J is a dangerous and contemptious that does nothing but crap all over seniority numbers, it was our first stand to Chq mgmnt that we deserve and demand the quality of life and pay to airline scale.
dav8or, I just dont want the regional community to think that we are having financing trouble when we are getting 22 for Delta with an option for 30 more, in the next 13 months. Managements posturing doesnt mean I have to start looking for my ankles..

 

[CHQPilot]

CHQ is having problems getting financing because of the industry. Will it stop us from getting more jets? Probably not. It is hard to get the money now on the terms we want, so we have to negotiate. We're still taking jets, but I do believe management is doing more dealing than in the past. Sure, BB is full of hype but it has been that way for a long time.

U may be able to have a cash infusion from Texas Pacific, but they're giving up seats on the board and along with that, some control of the money. It is almost a given the money will go to RJs and the reorganization. When U filed Ch.11, all the WOs were included in the filing, so I'm sure the court will have some say how things pan out. How it falls into place, only time will tell.

 

[dav8or]

The main reason we are not getting jets for U is only because we did not sign up for J4J and if you believe that CHQ has trouble financing then I know at least 1 CHQ employee who will sign any contract that is put before them..... Dont beleive BB's hype. J4J is a dangerous and contemptious that does nothing but crap all over seniority numbers, it was our first stand to Chq mgmnt that we deserve and demand the quality of life and pay to airline scale.
dav8or, I just dont want the regional community to think that we are having financing trouble when we are getting 22 for Delta with an option for 30 more, in the next 13 months. Managements posturing doesnt mean I have to start looking for my ankles..

I didn't sign the last TA or J4J's deal and I don't trust BB any further than I can spit. I know all to well that BB is here for BB. Financing has gotten harder, Bedford will find the money if it is in his best intrest. Can you tell the kool aid has worn off.

 

[dakotaHC8]

I hate to burst anyones bubble... but

First off, their first and foremost priority is to spend what capital Group can obtain on obtaining EMB-170/5's for MDA. There is no other reason for the creation of Mid Atlantic other than the competitive advantage and operational restucturing that these large RJ's will enable. Dave S has staed in clear terms the urgency and necessity to get MDA up and running ASAP. He HAS NOT labeled the remaining WO's own aquisition of RJ equipment as time critical and has almost made a point NOT to say what is in store for the the three of us at all...

Dave S was quoted specifically that he wanted 40 a/c on the MDA property by the end of 2003. He was quoted a figure of near 60 aircraft at the "other express" carriers. Do not be so self absorbed to assume that that meant ALG, PDT, or PSA...

To be blunt, economic reality is that US Airways Group can only so much with the capital that is available. MDA will take priority now and into next few years. There is no "investor fairy" that will magically throw billions (yes, that is how much hundreds of RJ's cost) into US Airways for nothing. Years from now when US Airways has proven it's vitality and the economy is stronger there will be enough lenders willing to serve US Airways' needs with a simple lease or loan, but nowadays... Things are more complicated

If you need a more likely senario, an investor may already be planning to purchase/obtain all or part of ALG, PDT ,and PSA in return for providing the capital necessary to equip these carriers with RJ's over the next 5 years. Thus the sudden change in negotiating position of managment over sucessorship (which coincides with their current negotiations to finance a large RJ order).

We'll see, but remember if we get sold, there's no future flow anymore into anywhere

 

[d328pilot]

I agree with you that Mid Atlantic is U's first priority. However, I believe that jets will come to the wholly owneds first. It is almost certain that it will be erj's. If i am not mistake, the ERJ-170 is not certified yet in the US. Seigel has said that Mid Atlantic will fly the 70 seaters and the wholly owneds will get the 50 seats. I cant imagine that Seigel will wait for certification until he will get jets. I am not being self absorbed to think that the wholy owneds will get the jets. That comes straight from Seigel at the PIT roadshow. The only way a contract carrier will get jets is if there is no financing AND they agree to J4J. The "credit fairy" does exist. It is the US government. When U emerges from Ch. 11 (projected to be first quarter of next year), the US government will dump almost 1 billion dollars in loan guarentees to U. Current financing will be provided by Texas Pacific Investments, Credit Suisse, and Bank of America to name a few. U has plenty of capital available. And it is not like they will buy the airplanes. I am sure they will be able to get a nice lease agreement with the company wanting over 400 rjs.

 

[Sam Adams]

400 jets

I think 400 jets is little high, who knows our fate at the WO's I'm hearing we may sold .One things for sure nothing good has happend here in a long time.There is not one thing good about that TA it sucks!Read Dakota's post a couple more times it hits the nail on the head.