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UAL Seeks Injunction Against Atlantic Co

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Beechnut

Ndugu's Foster Dad
Joined
Nov 27, 2001
Posts
714
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]
 
Last edited:
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.
 
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).
 
Tug Driver said:

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.:cool: :cool:
 
Mesa or Chit-talk would love to take ACA's place. Watch out.
 
General Lee said:
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?
 
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.
 
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.
 
spinup said:
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.
 
OOramperpilot,

Yes, I do fly, and it is usually a 4 day or a 3 day trip. The cap at Delta is 75 hours for a line, so I usually have 14-16 days off a month, and I love to get on this board and see what everybody is talking about. Other than that, yes--I do have a life, including a wife. I work out each day and I ride bikes also. I know it seems like I am on here all of the time, but I enjoy staying informed and injecting my opinions.

Bye Bye---General Lee:cool: :rolleyes: ;)
 
Spinup,
ACA is DEFINITELY playing hardball with United. Whether or not United could get enough aircraft (I believe we are flying about 30 J-41's and 90 CRJ's) from Chautauqua and MESA to cover both Dulles and Ohare without a break in service is doubtful. The silver bullet is that we own the gates at Dulles and if United discontinued us, I don't know if there is enough gate space for them to set up another regional. By extension, we would be sitting there with those 120 aircraft and who wants in place and established feed into the Northeast corridor. Continental... USAir... AirTran would be interesting... maybe even the rumored Virgin Atlantic LCC... or maybe going it alone.... The facts are that ACA spent 1 million to buy back the ACJet operating certificate and several more million on a reservation system... I don't know where we are headed but it is not down on our knees in front of United.
 
aca ops

ACA operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. The company has a fleet of 142 aircraft—including 112 regional jets—and offers over 825 daily departures, serving 84 destinations.

and i think about 4,800 total employees...



:)
 
ACA Update on Negotiations With United A

Dulles, VA, (May 23, 2003) - Atlantic Coast Airlines, the Dulles, VA-based United Express regional carrier (ACA) (NASDAQ/NM: ACAI) today announced the following with regard to its United Express program.

Post-Bankruptcy United Express Agreement

As previously disclosed, United Airlines, Inc. (United) has commenced a process to benchmark and restructure its United Express program. United has asked ACA and other regional carriers to submit proposed costs and other information, with the goal of negotiating new agreements with regional airline operators for its United Express operations. ACA and United have had a number of discussions regarding possible terms for a revised United Express agreement, and have exchanged proposals concerning a new contract that would supercede ACA’s existing United Express agreement. ACA cannot predict the timing or outcome of any decision by United as to its future United Express operations.

Tentative Agreement With ACA Pilots

In an effort to make its costs more competitive in the current environment, ACA has previously announced a cost reduction program that includes salary and bonus plan reductions for management and salaried employees as well as other cost reduction initiatives. As a major step in further lowering its costs, Atlantic Coast Airlines has reached a tentative agreement on a revised contract with the Air Line Pilots Association (ALPA) which still requires membership ratification. This new agreement would go into effect only if and when ACA and United enter into a revised United Express agreement and that agreement is affirmed by the bankruptcy court as part of the process described above.


The tentative agreement includes concessions in pay rates and work rule improvements—all designed to help ACA create an even more competitive cost structure. If the tentative agreement is ratified and becomes effective, the cost savings would be passed on to ACA’s partners through its fee-for-service agreements. ACA’s pilots are expected to vote on the agreement in early-to-mid June.

2003 Cost Recovery Rates

ACA has previously reported that it is seeking a rate adjustment with United for 2003 consistent with ACA’s interpretation of its existing United Express agreement. The rate adjustments would, among other things, offset a reduction in the scheduled utilization of its aircraft and reflect changes in other costs as provided for in the existing United Express agreement. ACA provided United with a notice that it believes that United is not in compliance with the terms of its United Express agreement as a result of delays in establishing rates for 2003. On May 21, 2003, United filed court motions seeking to prevent ACA from exercising any right to terminate the contract and to provide United with a further opportunity to cure should United be found to have breached the existing United Express agreement.



ACA believes that United’s action was unnecessary since the Company has not sought to terminate its United Express agreement over this matter at this time. ACA’s actions are intended to preserve and pursue its rights under the existing United Express agreement as it seeks a rate adjustment for 2003 consistent with its interpretation of that agreement. ACA intends to pursue this issue with the bankruptcy court for resolution in the absence of an agreement with United on 2003 rates. ACA is continuing to operate its agreed-upon schedule with United and United is continuing to pay ACA for this service based on 2002 rates.

Fleet Plan

ACA continues discussions with its partners at Bombardier Aerospace about the future delivery plans for its CRJ regional jet aircraft. ACA’s last jet delivery was completed in early March. Since that time, the Company has not taken delivery of any aircraft under its purchase agreement with Bombardier. The Company and Bombardier have agreed to an interim extension to delay the delivery of aircraft originally scheduled for March, April, and May 2003. The current interim agreement will expire at the end of May.



***
Statements in this press release and by company executives regarding its relationship with United Airlines, Inc. and regarding projections and expectations of future aircraft deliveries, availability of financing, future payments by United, operations, earnings, revenues and costs represent forward-looking information. A number of risks and uncertainties exist which could cause actual results to differ materially from these projected results. Such factors include, among others: the extent to which the company accepts regional jet deliveries under its agreement with Bombardier, and its ability to delay deliveries or to settle arrangements with Bombardier regarding undelivered aircraft; United’s decision to elect either to affirm all of the terms of the company’s United Express Agreement, or to reject the agreement in its entirety, the timing of such decision, any efforts by United to negotiate changes prior to making a decision on whether to affirm or reject the contract, the ability and timing of agreeing upon rates with United, the company’s ability to collect pre-petition obligations from United or to offset pre-petition obligations due to United, the company’s ability to collect post-petition amounts it believes are due from United for rate adjustments and United’s ability to successfully reorganize and emerge from bankruptcy; the continued financial health of Delta Air Lines, Inc.; changes in levels of service agreed to by the company with its code-share partners due to market conditions, and willingness of finance parties to continue to finance aircraft in light of the United situation and of market conditions generally, the ability of these partners to manage their operations and cash flow, and ability and willingness of these partners to continue to deploy the company’s aircraft and to utilize and pay for scheduled service at agreed upon rates; availability and cost of product support for the company's 328JET aircraft; whether the company is able to recover or realize on its claims against Fairchild Dornier in its insolvency proceedings and unexpected costs arising from the insolvency of Fairchild Dornier; general economic and industry conditions; additional acts of war; and risks and uncertainties arising from the events of September 11, the impact of the outbreak of Severe Acute Respiratory Syndrome on travel and from the slow economy which may impact the company, its code-share partners, and aircraft manufacturers in ways that the company is not currently able to predict. These and other factors are more fully disclosed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in ACAI’s Annual Report on Form 10-K for the year ended December 31, 2002. These statements are made as of May 23, 2003 and ACA undertakes no obligation to update any such forward-looking information, whether as a result of new information, future events, changed expectations or otherwise.
 
79 CRJ's
33 FRJ's

are the correct numbers on the regional jets...

not that it matters, but you all know how "anal" we pilots are!
 
As I suspected.

General Lee said:
OOramperpilot,

Yes, I do fly, and it is usually a 4 day or a 3 day trip. The cap at Delta is 75 hours for a line, so I usually have 14-16 days off a month, and I love to get on this board and see what everybody is talking about. Other than that, yes--I do have a life, including a wife. I work out each day and I ride bikes also. I know it seems like I am on here all of the time, but I enjoy staying informed and injecting my opinions.

Bye Bye---General Lee:cool: :rolleyes: ;)

General,

I had pretty much anticipated the gist of your reply, but I just had to throw it out there for some fun. While there is a ton of good info on this board, too much of it seems to get way too serious sometimes. Maybe rightfully so, maybe not occasionally.

Here's hoping the blue is always above brown for you,

OOramperpilot
 
Re: ACA Update on Negotiations With United A

Tug Driver said:
On May 21, 2003, United filed court motions seeking to prevent ACA from exercising any right to terminate the contract and to provide United with a further opportunity to cure should United be found to have breached the existing United Express agreement.



ACA believes that United’s action was unnecessary since the Company has not sought to terminate its United Express agreement over this matter at this time.


This is hardball at it's finest......."at this time".....I love it!
 
Mesa and Chit may be attempting to grow at a break neck pace but eventually their infrastructure to maintain and operate those aircraft will become dysfunctional due to the rapid growth.

You may be able to hire and train pilots at a rate of 40/month but to grow the fleet, maintenance dept, ramp operations etc. will never be able to keep pace.
 

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