UAL Seeks Injunction Against Atlantic Co

[Beechnut]

UAL Seeks Injunction Against ACA

Dow Jones Business News
UAL Seeks Injunction Against Atlantic Coast On Contract
Thursday May 22, 6:58 pm ET
By Erik Ahlberg, Of DOW JONES NEWSWIRES


CHICAGO (Dow Jones)--UAL Corp. (UAL), parent of United Airlines, this week asked a bankruptcy-court judge to prevent Atlantic Coast Air from walking out on a contract to provide regional airline service.



Atlantic Coast, which handles small-hop regional flights for United under the United Express brand, in April told the airline it was in default on the contract because it wasn't negotiating new rates in "good faith." The contract was set to expire on Saturday.

UAL spokesman Jeff Green said the company believes it hasn't defaulted on its contractual obligations. Representatives for Atlantic Coast weren't immediately available for comment.

In court documents, UAL said if the contract were to be terminated, it would cause "substantial disruption" to the company's brand, operations, revenue and profits. It would also have a "detrimental effect" on the millions of passengers who fly on United Express, UAL said.

UAL, of Chicago, filed for federal bankruptcy protection in December.

UAL on Wednesday filed an emergency motion with the U.S. Bankruptcy Court for the Northern District of Illinois seeking a temporary restraining order to prevent Atlantic Coast from unilaterally terminating the contract on Saturday.

A hearing before Judge Eugene R. Wedoff on the matter that had been scheduled for Thursday morning was continued to May 29.

Atlantic Coast, of Dulles, Va., wants to end the contract because, given the uncertainty surrounding United's future, it doesn't have the financial flexibility to plan new aircraft purchases. Atlantic Coast is also a regional airline partner with Delta Air Lines Corp. .

In court documents, UAL said it has been working with Atlantic Coast for months in an attempt to agree on rates for 2003. The airline has been unable to "extract the information it needed" to verify Atlantic Coast's proposed new rate structure and said Atlantic Coast has changed the terms of its original proposal, according to the filing.

The sides had face-to-face meetings about the new deal on May 14 and talked by phone on May 19.

-By Erik Ahlberg, Dow Jones Newswires; 312-750-4141; [email protected]

 

[Tug Driver]

IMPORTANT ANNOUNCEMENT FOR ALL ACA EMPLOYEES

United Court Case Will Have NO Impact on ACA Operation

ACA Will Continue Operating Normally As Discussions Continue



ACA’s senior management team is continuing to work on resolving our long-term relationship with United, with the goal of moving ahead toward a future of continued growth for our employees—even while both sides are ironing out key issues in the bankruptcy court.



Today, news reports are indicating that there is a possibility that ACA might be planning to exit the United Express program, and that ACA has not been a part of the ongoing bid process that will decide the future of that program. Both of these assertions are incorrect. Here are the facts of the situation:



· ACA is still working to get resolution on our cost recovery rates for 2003. We are still being paid at 2002 rates, which need to be updated to account for our lower aircraft utilization this year, among other factors.



· In order to get United focused on the timeliness of the 2003 rate issue, a default notice was sent to UAL, urging them to resolve this issue. This annual process is usually handled much earlier in the calendar year, but it has dragged on beyond what would be considered a reasonable period, especially given our reduction in utilization.



· ACA is not moving in the direction of withdrawing from the United Express program at this time.



· United felt that ACA’s notice provided ACA with rights that could include the right to terminate, and wanted to be sure that this action would not be taken. It therefore filed a motion asking the court to prevent ACA from leaving the United Express program. ACA explained to United that it believes this move was unnecessary since we have no intention of beginning the withdrawal process.



· As for the long-term future of the United Express program, ACA is very much involved in the bidding process being conducted by United and its consultants, and has submitted a proposal which we believe is very competitive. ACA did not follow the original timetable suggested by United for a May 1st bid, but took the necessary time to create a more complete proposal that would best serve both companies. United agreed to this extension, and is now reviewing the proposal.



Additional information about the ongoing discussions between ACA and United will be made available to all employees as soon as it is appropriate to do so. If you have any questions about the present situation at any time, please talk directly to your supervisor, department head or the ACA Communications department.

 

[KingAirKiddo]

Hmm...that's interesting. Talk about a dysfunctional relationship. Oh, well. Hopefully it will all get resolved soon. I sure would like to get back to flying the line soon (sigh).

 

[WhiteCloud]

ACA’s senior management team is continuing to work on resolving our long-term relationship with United, with the goal of moving ahead toward a future of continued growth for our employees—even while both sides are ironing out key issues in the bankruptcy court.
· United felt that ACA’s notice provided ACA with rights that could include the right to terminate, and wanted to be sure that this action would not be taken. It therefore filed a motion asking the court to prevent ACA from leaving the United Express program.

From the info in this post it looks like the ACA negotiators are doing a pretty good job of not taking crap from UAL. Instead of ACA worrying if UAL will keep them they've got UAL getting injunctions to keep ACA from walking out. I like seeing the little guys stick it to the big guys.

 

[General Lee]

Mesa or Chit-talk would love to take ACA's place. Watch out.

 

[OOramperpilot]

The flying General.

General,

This is purely tounge in cheek, but with as much as you post around here, do you every fly?

 

[WhiteCloud]

Mesa or Chit-talk would love to take ACA's place. Watch out.

Sure they would. But can they set up operations in a timely manner ? Would ACA would continue to fly the routes in the meantime? Takes a lot of money and time to set up flight operations. Could Mesa or Chautauqua do it and make it work?

 

[9rj9]

United would go chap 7

United would fail if ACA drops their contract, no one could put that many planes on routes quick enough. ACA knows this and will not accept Mesa pay. ACA also owns their gates in Washington, like to see Chit-taky or mesellouta find gate space.

 

[spinup]

9rj9,

Where's Great Lakes now??? Thought they could go it alone too. Seems UAL covered that quick enough. If memory serves, GLA pulled a sick out back in the day, and in very short order lost UAL flying. Tran States / UFS was more than happy to oblige and quickly pick up GLA's lost flying. Service interruption was minimal. Hope the DAL contract is enough for ACA to stay afloat if UAL falls thru for them.

 

[WhiteCloud]

9rj9,

Where's Great Lakes now??? Thought they could go it alone too. Seems UAL covered that quick enough. If memory serves, GLA pulled a sick out back in the day, and in very short order lost UAL flying. Tran States / UFS was more than happy to oblige and quickly pick up GLA's lost flying. Service interruption was minimal. Hope the DAL contract is enough for ACA to stay afloat if UAL falls thru for them.

9rj9 makes some good points. ACA already has the planes and the pilots and the gates going today. It would take a massive amount of time for a company like Trans States to pick it up. Back when I was with TSA they had around 600 pilots and ACA today has 1500 and a corresponding number of planes and gates ready to fly today. Great Lakes is/was a relatively small operation and easy (apparently) to replace. ACA is a much bigger animal to deal with.