US Air?

[Justino]

So what will happen if US Air tanks? Would some of the regionals dissolve or be disbanned amongst some other regional or mainline carriers?

Do you think it will tank? People have been saying it will for years. Any US Air regional guys/gals whats you're take?

Thank You!!

 

[efiscompmon]

well, right now they are selling MSP-MCO via CLT for $131 RT including taxes and fees--that's under $0.03 per mile.Fairly sure that their costs are higher than that. How long can they keep up?

 

[chperplt]

I was talking with a couple US Air guys in ATL a couple days ago. They say that the airline told the SEC that they would be in default on their government loan by the end of September. They also said that the guy who holds the strings says he'll liquidate the company the minute they go in default.

Who knows what will happen.. I think the turboprop operators will be hard pressed to find another carrier. Who wants to add an all prop carrier when everyone else has jets?

 

[Rogue5]

The beginning of the end?

US Airways to Trim Pittsburgh Service
Thursday August 12, 1:29 pm ET US Airways to Discontinue Nonstop Service From Pittsburgh on 20 Routes



ARLINGTON, Va. (AP) -- Air carrier US Airways Group Inc. said Thursday that it will discontinue nonstop service from Pittsburgh on 20 routes, effective Nov. 7, as part of the airline's restructuring plan.

The company said the cuts will affect US Airway or US Airway Express service to London, Montreal, Ottawa and Frankfurt, Germany, with the rest of the cuts affecting domestic destinations in Virginia, Pennsylvania, Ohio, South Carolina, Vermont, New York, Kentucky, Maine, Tennessee and Michigan.

The airline will continue to provide nonstop service from Pittsburgh to more than 50 other cities, including 28 out of its top 30 markets. However, US Airways said further cuts are possible on the US Airways Express network as affiliate carriers are still finalizing their schedules.

Shares of US Airways Group fell 10 cents, or 3.8 percent, to $2.53 in afternoon trading on the Nasdaq.

 

[I.P. Freley]

I don't think the above is a big surprise

They've been talking about downsizing PIT for months. It's no longer a hub, but a "focus city" (I think that's the term, at least). If that article is a revelation to you, you've not been paying attention to what USAir's been up to as of late.

 

[SRJ]

I thought airways made 35 million the 2nd quarter?

 

[halfmoon]

doesn't matter how much they make, if they default on the next loan payment due the end of september they will liquidate, no second ch11 to reorganize.
This could get really interesting

 

[Rogue5]

Pilots: US Air may enter bankruptcy
Union agrees with banker's assessment that airline may seek protection if it can't land cost cuts.
August 13, 2004: 8:08 AM EDT


NEW YORK (Reuters) - Investment bankers working for US Airways Group Inc.'s pilots union said the No. 7 U.S. airline could seek bankruptcy protection by mid-September if it does not get needed cost cuts, according to a report published Friday.

Bill Pollock, chairman of the Air Line Pilots Association union's group at the Arlington, Va.-based carrier, said in a letter that the union's leadership "does not disagree in principal [sic] with the conclusions" reached by the union's banker, Glanzer & Co., the Wall Street Journal reported.

"The reality of our financial situation speaks for itself," the letter said.


The airline did not immediately return a call seeking comment.

The 26-page report, dated July 14 and released this week to 3,400 ALPA members, according to the newspaper, essentially confirms US Airways' (UAIR: Research, Estimates) own wary outlook for its future.

The report said the carrier's creditors have already put claims on its cash to minimize losses if US Airways collapses, the newspaper said, and that US Airways "might be worth more dead than alive to groups other than the employees" because other airlines might use its assets more profitably.

Last month, US Airways Chief Executive Bruce Lakefield told employees that if the carrier fails to cut costs, it "could just run out of steam sometime next year."

US Airways lowered its cost structure during its eight months in bankruptcy protection in 2002 and 2003. But soaring fuel prices and growing market share among discount carriers have made it difficult for the carrier to succeed.

As part of its drive to cut costs by $1.5 billion, US Airways has said it needs about $800 million of labor concessions.

This includes $295 million from pilots, $263 million from mechanics and fleet service workers, $122 million from reservation agents and passenger service and ticket counter employees, and $116 million from flight attendants.

Pilots have offered to take pay cuts of 12.5 percent and work more hours through 2008. Flight attendants have said they would discuss concessions.

The carrier recently said it would discontinue Pittsburgh as a flight hub. On Thursday it said it would halt nonstop service from that city on 20 routes, but maintain such service to more than 50 markets.

US Airways shares fell 9 cents to $2.54 Thursday. They began the year at $6.22.

 

[ASH]

doesn't matter how much they make, if they default on the next loan payment due the end of september they will liquidate, no second ch11 to reorganize.
This could get really interesting...

Is the writing on the wall folks? Apparently the Execs said their isn't much "steam" left.
How will this effect the industry? What do you think the potential fallout will be, or positives, if any? Hang in there USAir mainline...you guys ROCK!

 

[N8Dogg]

It seems that if USAir is to survive more needs to be addressed than labor concessions. They need to reinvent themselves somehow in order to compete with the LCC's. Maybe they could make a significant reduction in size until the bleeding can be controlled and seek out markets where profits can be made (if any still exist). The express carriers should definately play a larger role in turning things around. In its current condition USAir is a sinking ship with very few life rafts (golden paracutes being the exception). I tip my hat to the USAir mainline guys. Good luck.

 

[satpak77]

How will this effect the industry? What do you think the potential fallout will be, or positives, if any? Hang in there USAir mainline...you guys ROCK!

If US Air ceases ops and liquidates, this will put ex-UAIR pax onto other airlines. LUV is aware of this and monitoring the situation. LUV is not successful because of dumb luck.....some very smart people at that company

Obvious the pilots will be on the street, adding to the already overflowing supply of applicants at the other airlines

Lets not forget the non-pilot employees also, they will be looking for jobs also. All the Bush jobs talk aside, this is still a tough economy right now.

Regional carriers who carry US Air pax, well what will happen to them? If the US Air pax go away, then what? If they shut down, THOSE pilots are now applicants at other regionals. That pushes back the kid who is a CFI with 900 hours and trying to hit the 1200 mark.

If US Air and United (likely) shut down, and their regional sisters shut down or severely get reduced via re-birth to another identity, we are talking SEVERE EFFECTS to the "airline pilot career" track

we should keep the US Air family and employees in our thoughts and prayers in this troubling time

 

[dondk]

Living in and commuting out of PIT I have seen first hand the decrease in traffic. Don't get me wrong, those flights that do go are full or close to full. They do have a ton of cancellations though, and that has to be hurting by putting those cancelled pax on other carriers. Especially since one of the WO's have 30-40% cancellation rate at present.

Most of what is being said has been said before, starting Sept through the end of the year it will be real interesting at U.. More furlough's for all work groups. My wife (bankrupty att'y) has seen an dramatic increase in U people in the last 6 weeks. It is really sad when the average person in her office had put better than 20 years with U and is now looking for protection.

There are also rumors of other carriers, at least that is what the local Gov't have been saying.. They turned down Air Tran and SWA a few years back, now they are paying the price as neither will increase service or come to PIT. I plan on seeing my taxes go through the roof if U should fail, some one has to pay for the airport.

I do hope U stays around.. for everyone's sake...

 

[blzr]

What will happen to MDA and PSA if it all falls down? Will they sell all the assetts, or will other companies buy a fully functional airline and take on the employees?

 

[PBRstreetgang]

What will happen to MDA and PSA if it all falls down? Will they sell all the assetts, or will other companies buy a fully functional airline and take on the employees?

Nope, they will take the assets then offer you prefferential interviews, with new hire senority, bottom of the list, new hire pay and associated costs. You will be in competition with flight instructors who would give their left nut for the job, and will go through training with out pay causing you to do the same.
PBR

 

[SRJ]

Nope, they will take the assets then offer you prefferential interviews, with new hire senority, bottom of the list, new hire pay and associated costs. You will be in competition with flight instructors who would give their left nut for the job, and will go through training with out pay causing you to do the same.
PBR

Sweet! What a deal

 

[350DRIVER]

They turned down Air Tran and SWA a few years back, now they are paying the price as neither will increase service or come to PIT.

Actually Air Tran just announced this last week that they are increasing daily flight from PIT to both Atlanta and Orlando.

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[lowecur]

doesn't matter how much they make, if they default on the next loan payment due the end of september they will liquidate, no second ch11 to reorganize.
This could get really interesting

This is absolutely not the case. They have more than enough money to make their loan payments. There are three possible scenerios that could force liquidation.

1: They could violate the loan covenants of the ATSB if their cash or percentages dip below a certain level. The ATSB has the option of demanding full payment of all loans immediately, thus effectively shutting down the airline. 2: The Alabama Retirement Fund could force liquidation with the sale of assets. 3: Other creditors or stakeholders could begin a run on the company to secure their money by requesting immediate repayment.

In my view, the most likely scenerio is the ATSB will readjust the covenants prior to the company entering Chapt. 11. The ATSB will force the sale of the Shuttle and other gates and slots as part of the deal prior to the company entering Chapt 11, since UAIR does not have the cash to spare like the last adjustment. The company will enter Chapt 11 for a short term stay - probably less than 90 days. They will ask and receive relief on various contracts, and re emerge by the 1st of the year a smaller and leaner airline.

 

[350DRIVER]

This is absolutely not the case. They have more than enough money to make their loan payments. There are three possible scenerios that could force liquidation.


1: They could violate the loan covenants of the ATSB if their cash or percentages dip below a certain level. The ATSB has the option of demanding full payment of all loans immediately, thus effectively shutting down the airline. 2: The Alabama Retirement Fund could force liquidation with the sale of assets. 3: Other creditors or stakeholders could begin a run on the company to secure their money by requesting immediate repayment.

In my view, the most likely scenerio is the ATSB will readjust the covenants prior to the company entering Chapt. 11. The ATSB will force the sale of the Shuttle and other gates and slots as part of the deal prior to the company entering Chapt 11, since UAIR does not have the cash to spare like the last adjustment. The company will enter Chapt 11 for a short term stay - probably less than 90 days. They will ask and receive relief on various contracts, and re emerge by the 1st of the year a smaller and leaner airline.

I kind of figured the other poster's comments were incorrect and not based on factual knowledge. Most likely what will happen is the ATSB will readjust, then they go back into 11, sale of Shuttle (possibly but don't think this is a given), routes (probably intl.), sale of slots, be there (in 11) for somewhere in the neighborhood of 4 to 5 months and then re-emerge as a much smaller but profitable airline due to a well defined plan that will be Implemented.

I can't see them going away overnight or atleast anytime in the relatively near future, too many people have a stake in the outcome of this. I don't think 1 & 2 are very likely due to many different factors but time shall tell.


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[SRJ]

What about selling the wholly owned groups to free themselves of RJ financing???

 

[Palerider957]

....yeah, that'll work. Sell off the only thing making them money right now.