So, does this portend UAL's decision?

[CLE145CA]

Associated Press
US Airways Proposes Air Wisconsin Link-Up
Wednesday February 23, 4:36 pm ET US Airways May Add 70 Regional Jets to Its Fleet Through Proposed Link-Up With Air Wisconsin

WASHINGTON (AP) -- US Airways Group Inc. could add up to 70 regional jets to its fleet through its proposed link-up with Air Wisconsin Airlines, which has also agreed to loan US Airways $125 million. According to papers filed with the U.S. Bankruptcy Court in Alexandria, Va., US Airways has reached a service agreement under which Air Wisconsin would fly 50-seat Bombardier CRJ-200 regional jets in the US Airways system "at prices equal to or lower than those paid to other regional jet affiliates."

Ninety-seat jets also could be added to the flight schedule, the agreement said.


The country's seventh-largest airline has said during its stay in bankruptcy protection that adding more regional jets would be a key part of its turnaround strategy as it transforms into a low-cost carrier focused on the East Coast and Caribbean.

The Arlington, Va.-based company struck deals with regional jet manufacturers Bombardier Inc. and Embraer in January for six aircraft.

US Airways representatives declined to comment on the proposed contract or loan agreement beyond a press release issued Friday.

The actual number of jets Appleton, Wis.-based Air Wisconsin would provide under the deal would be subject to Air Wisconsin's other commitments, as it isn't obligated to fly for US Airways.

In 2004, Air Wisconsin's 87-jet fleet generated about $700 million in revenue flying for UAL Corp.'s United Express, the company said.

Air Wisconsin officials weren't immediately available for comment.

A hearing on the matter is scheduled for Monday.

Air Wisconsin also has agreed to provide a $125 million debtor-in-possession loan to US Airways, providing about half of the funding the company said it needs to exit Chapter 11.

Under the loan terms, US Airways can repay the loan with equity in the reorganized company on the day it emerges from bankruptcy.

According to loan documents, Air Wisconsin would have a stake ranging from at least 19.2 percent to as much as 26.3 percent in the reorganized US Airways with minimum equity of $225 million.

As security on the loan, Air Wisconsin will get liens on most of the company's assets, and those liens will rank junior only to the liens of lenders led by the federal Air Transportation Stabilization Board, the motion said.

A positive aspect of the deal for US Airways is that the company can continue shopping around for other financing and regional jet service deals, the motion said. US Airways has managed to cut costs by more than $1 billion a year -- mainly through renegotiating labor agreements -- since filing for Chapter 11 in September 2004

 

[DiverDriver]

Ok, commenting on the bold type. How is it that we are told we are the highest paid United Express pilots and our flying is up for bid with the other carriers but we can fly for US Air for cheaper than the other express carriers already flying for US Air? Those other carriers include Mesa and Chatauqua and we are told we are costing more than them for United.

Something don't add up with that new maff.

 

[MW44]

Now this might sound crazy but maybe management hasn't been 100% honest.....

 

[DiverDriver]

Now this might sound crazy but maybe management hasn't been 100% honest.....

What!!!????

 

[Broke in CVG]

I think that this is Air Wiskey's Hail Marry... they must already know that they lost the United gig. Therefore, if they do nothing their entire company is worthless. They can fly for US Air for breakeven or a loss and hope to recoup that loss in their equity investment with US Air. US Air can go under in which case once again Air Wiskey is worthless, but at least the $125m that they sank into US Air is secured by US Air assets.

Let's assume that the United deal is done. That pretty much leaves them with no choices other than shut down and walk away. You have to admit, this was pretty creative deal making in that it keeps both ships afloat (at least for a little while).

 

[DiverDriver]

Let's assume that the United deal is done. That pretty much leaves them with no choices other than shut down and walk away. You have to admit, this was pretty creative deal making in that it keeps both ships afloat (at least for a little while).

Are you assuming for the sake of arguement or you are assuming because you believe it's true?

 

[WhiteCloud]

I think that this is Air Wiskey's Hail Marry... they must already know that they lost the United gig. Therefore, if they do nothing their entire company is worthless. They can fly for US Air for breakeven or a loss and hope to recoup that loss in their equity investment with US Air. US Air can go under in which case once again Air Wiskey is worthless, but at least the $125m that they sank into US Air is secured by US Air assets.

Let's assume that the United deal is done. That pretty much leaves them with no choices other than shut down and walk away. You have to admit, this was pretty creative deal making in that it keeps both ships afloat (at least for a little while).

That's a pretty narrow vision of the options AWAC has available. 70 CRJ's with a full staff flight crewmembers ready (and happy) to fly somewhere else other than UAL is a pretty good product to offer. I'm not privvy to what AWAC management knows or doesn't know about the UAL deal.....what I do know is that now AWAC is in the process of creating other options for itself. Given UAL's proclivity for jerking their regional "partners" around I think that's a very good thing to do.

 

[ShyFlyGuy]

Very smooth move on Whisky's behalf. There was no way they were going to win the United bid again, but with one deal, the're going to distribute their weight, as Broke said, "keeping both ships afloat. Very slick move. And that's an oppinion.

 

[Broke in CVG]

That's a pretty narrow vision of the options AWAC has available. 70 CRJ's with a full staff flight crewmembers ready (and happy) to fly somewhere else other than UAL is a pretty good product to offer. I'm not privvy to what AWAC management knows or doesn't know about the UAL deal.....what I do know is that now AWAC is in the process of creating other options for itself. Given UAL's proclivity for jerking their regional "partners" around I think that's a very good thing to do.

Welcome to the reality of over capacity, especially in the 50 seat market!
There are no other options! That's what happens when all your eggs are in the same basket. Why do you think CHQ took the loss for the Orlando flying to get the Delta deal.... beacuse it got them in the door for the additional feed. First the dumped America West planes out of Columbus, then longer haul out of Orlando and now the EMB-170s.

1. AWAC isn't exactly competitive in cost. In fact they have THE HIGHEST Unit Costs (Cents per Mile). http://products.bts.gov/press_releases/2004/bts035_04/html/bts035_04.html

2. Where do you think they are going to place 70 CRJs? The only reason Comair is offereing the 10 CRJs to the pilots as part of the E-170 package is because Delta has to take them from GEAC as part of the loan package. Even NWA argreement specified that the additional feeder because of a airline failure had to be 70s. So they aren't going there. CO... don't think so. United... oops, gues not. Airtran... already been there, done that. I am sorry but the only place they are going to be placed is in the dessert.

3. Trans States' new GOJET certificate was for all CRJ700s.

4. Every airplane has it's time and place and the CRJ100/200 time is just about up. With the new low fare environment, it's CASM is just too high. Thus Embraer's new home run... the E-170/175/190/195.

The hard truth of the matter is that if the United deal was gone (and I believe AWAC new it was) that AWAC would have ended up like Chicago Express... for sale $37,000 plus assumption of liabilities. Going the likes of Indy Air isn't feasible... Indy had the cash to begin with and they still might not make it (but that's another story). This US Air deal was indeed the Hail Mary. And it was caught... now we just have to see if they make it to the endzone.

My best wishes do go out to you guys and I hope that it does work out. I like to save the ill will for the Mesa guys.

 

[pilotpayne]

Hey just one question.
Why does everyone assume that the united deal is dead?
Maybe we will get 70 seaters for yonited and send the 50's to U air.
I understand that might be a long shot but I have not heard any news that the united deal is dead. AWAC is a great airline and has always done it's best for united. I think it would cost united way to much to get rid of us but time will tell. We might be losing united or we might have some great growth.

 

[JD2003]

I was under the impression that UniTED owned AirWhiskey. Just an observation, but Air Wisconsin was listed as a subsidiary of UAL Corporation in their bankruptcy filing when I resigned in from UAL in 03.

Please correct me if I am wrong. The way I see it is that UAL is going to have USAir one way or another.

just my .02

 

[MW44]

that's interesting. If ual does still pull the strings at Air Wisconsin then this could be a backdoor way for United to buy a significant portion of Airways without having to sell it to the employees. Does anybody know who in fact owns Air Wisconsin?

 

[Broke in CVG]

Privately owned by Eastshore Aviation, LLC.

The commuter airline -- launched in 1965 with flights between Appleton and Chicago -- was purchased by United in 1992 for $75 million and the assumption of $150 million in debt after a bidding war with American. United sold it a year later to the current six-person ownership group, which includes two former Northwest Airlines executives and three members of New York banking firm Resource Holdings Ltd.

United has NO, I repeat NO equity stake in AWAC.

 

[surplus1]

There was a time when UAL did own AWAC but that was a long time ago. To the best of my knowledge, AWAC is currently a privately held company and UAL does not own any part of it.

Back when UAL acquired the original AWAC it did nothing but destroy the company. Today's AWAC emerged from the ashes of that debacle.

Now it seems that UAL would like to do it again, only this time they don't own the cards. I wish for UAL exactly what it wishes for AWAC.

This deal with U may very well be the hail mary pass that someone mentioned. If it proves successful and results in a touchdown for AWAC I'll applaud. UAL deserves nothing and hopefully it will get what it deserves.

United's other "feeders" will ultimately discover the benefits of dealing with that company. It has never failed to screw whomever it has touched. Hopefully, AWAC can turn the tables in this instance. They're a great outfit and they deserve it.

 

[Skaff]

AWAC is a great airline and has always done it's best for united.

Your pilot group seems to be real cool and your people at the out stations are usually really good, but your chicago grounds crews have problems. At times it is unbelievable. Hope things turn out good for you guys.

 

[Rottweiller]

I was under the impression that UniTED owned AirWhiskey. Just an observation, but Air Wisconsin was listed as a subsidiary of UAL Corporation in their bankruptcy filing when I resigned in from UAL in 03.

................Deleted

 

[vc10]

That's Air Wisconsin Inc. AWAC is Air Wisconsin Airlines Corp, or something similar. Two different corporations. Confusing, for sure, but the "Air Wisconsin" that is a subsidiary of United is no longer related to AWAC.

AWAC was, at one point, a United subsidiary, but that was a long time ago.

I was under the impression that UniTED owned AirWhiskey. Just an observation, but Air Wisconsin was listed as a subsidiary of UAL Corporation in their bankruptcy filing when I resigned in from UAL in 03.

Please correct me if I am wrong. The way I see it is that UAL is going to have USAir one way or another.

just my .02

 

[J32driver]

Exactly what vc10 said. Air Wisconsin Airlines is nothing but an empty folder in a filing cabinet at UAL world HQ. Now... Air Wisconsin Airlines Corp. is the United Express feeder.

Neat shell game huh?

 

[flyboy9967]

From what I heard from a little birdie is that we(AWAC)pulled our new bid from united and went with our original bid, which ual had already said wasnt going to work. Anyone else hear that?

 

[WhiteCloud]

Welcome to the reality of over capacity, especially in the 50 seat market!
There are no other options! That's what happens when all your eggs are in the same basket.

I'm with you on the "all the eggs in one basket" statement.......that's proved to not be a good thing especially when UAL is the basket. However, when the planes pulled out of ATL they had somewhere else to go immediately. Even though it was a UAL deal they still were/are not sitting idle for the time being.

I wouldn't be so sure about the "no other options" statement though. AWAC's owners seem to be pretty savvy at staying afloat in hard times. This USAirways deal very well could be something that buys time until the long term plan (whatever that may be that you and I are unaware of) is made viable.

 

[Furloughed80]

United Deal?

Why is everybody assuming that the United deal is done? If we were truly out of the game, why do they keep asking us to re-bid? United is looking for larger aircraft to operate the express system. Does anyone know how much it would cost United to get rid of us? I think things are far from over with United.

 

[saabdude]

It's not quite over

I've heard that United makes approximately 200 Million bucks a year on the United/US Airways codeshare agreement. It wasn't that long ago that United was desperately trying to buy-out US Airways back when American was buying out TWA. Maybe this is a way that United is trying to get in the backdoor of US Airways.

AWAC is privately owned by 6 people. The three amigos and the three silent partners. United could very well have their foot in the door of AWAC and nobody is going to know it.

It may be a hail-mary pass but the fat ladies haven't sang. (because they all are working the flights as F/A for AWAC) lol

 

[Kenny]

I think Furloughed80 has the right take on this. I'm not a big fan of Yonited management and I think this whole bidding thing is a sign that we should once and for all get out from under their shadow. But there's a few things to keep in mind .

Firstly we have this amount of cash sitting in an escrow account that goes to them when we get an affirmed contract. $80 million is what I keep hearing. I don't think they'd be stupid enough to pass up the chance to get their grubby little paws on that.

Secondly it cost them upwards of $120 million to transition from ACA. Again I don't believe they're stupid enough to pay that when they're trying to emerge from CH11 by the fall.

Thirdly if we're so out of the running and it's already known that we're not going to keep the flying, why is the training dept currently putting together a training program for the CRJ700/900?

This is just my take take on it, but I wouldn't count us of the running just yet

 

[WhiteCloud]

Thirdly if we're so out of the running and it's already known that we're not going to keep the flying, why is the training dept currently putting together a training program for the CRJ700/900?
This is just my take take on it, but I wouldn't count us of the running just yet

It all seems to me that it's about AWAC covering it's bases here. UAL doesn't respect a company that sits around hoping and waiting for them to affirm a contract anyway. AWAC needs to have plans in action to survive with and also without UAL since UAL can't seem to make up their [expletive]ing minds about what they want to do. Personally I'm keeping my fingers crossed that AWAC comes up with a better plan that doesn't involve UAL.

 

[VABB]

AWAC is going to purchase US Airways, merge Independence into it and then buy United. The new company is going to be called US Unipendence and Kit Darby is going to be the head of PR and recruitment, as well as a line pilot.

The new airline will be headquartered somewhere near Green Bay.

 

[WhiteCloud]

AWAC is going to purchase US Airways, merge Independence into it and then buy United. The new company is going to be called US Unipendence and Kit Darby is going to be the head of PR and recruitment, as well as a line pilot.

The new airline will be headquartered somewhere near Green Bay.

And we can staple the UAL and USAirways seniority lists to the bottom of the AWAC and Independence lists. Brush the dust off your Flight Engineer manual Kit.

 

[J32driver]

And we can staple the UAL and USAirways seniority lists to the bottom of the AWAC and Independence lists. Brush the dust off your Flight Engineer manual Kit.

The only way I'm agreeing to this, is if UAL's management is demoted and made responsible for nothing more than a single lav cart.

 

[WhiteCloud]

The only way I'm agreeing to this, is if UAL's management is demoted and made responsible for nothing more than a single lav cart.

Since UAL is one big lav cart I think they are highly qualified for the position.

 

[JD2003]

Trouble is...when they do empty their lavs they seem to like spilling it all over everyone else.

 

[ILLINI]

AWAC's latest bid to United was for all 50 seaters, no 70 or 90's. Whether this latest bid was identical to the the first one we submitted, I couldn't tell you.

I wouldn't put to much into the fact that the training department has started putting together training material for the CRJ700 and 900. It takes a while to get a training program put together and approved. It makes sence to get started on a program early just in case.