US Airways makes a profit

[lowecur]

Congrats to the UAIR family. CASM has been reduced to 9.4, but this excludes the high cost of fuel. They face the problem of delivery of the 170's past 9/30/04 if they don't reduce their payroll costs further.

All in all, this will make it more difficult for the airline to secure the add'l labor costs they are seeking. It will be interesting to see what GECAS does with the 170's on 9/30/04, and if Lakefield will put the shuttle or gates up for sale. My guess is GECAS will continue to release the 170's to UAIR, and the airline will be forced to wait until the end of the 3rd Q before going back to the unions.

http://biz.yahoo.com/prnews/040727/dctu023_1.html

 

[Lequip]

Yeah, but that includes a $214 Million handout by the TSA. Without the TSA charity donation, US Air would have lost nearly 200 Million. Wait till next quarter and the quartly report will be back to the garbage you are used to, hundreds of millions in losses per quarter. The doors will close soon for good.

 

[MedFlyer]

Yeah, but that includes a $214 Million handout by the TSA. Without the TSA charity donation, US Air would have lost nearly 200 Million. Wait till next quarter and the quartly report will be back to the garbage you are used to, hundreds of millions in losses per quarter. The doors will close soon for good.

The TSA handout was last year not this year.

 

[Lequip]

Your correct, it was last year. My bad. Nonetheless, the ship is still sinking.

 

[lowecur]

The TSA handout was last year not this year. Good point, Medflyer. QUOTE].....

 

[Dizel8]

Two rounds of concessions and a trip through Ch.11, yet their CASM is still 9.4 cents per mile, excluding fuel. Including fuel, which really has to be included even if it is at $25 a barrel, would still put them amongst the highest cost.

 

[lowecur]

Two rounds of concessions and a trip through Ch.11, yet their CASM is still 9.4 cents per mile, excluding fuel. Including fuel, which really has to be included even if it is at $25 a barrel, would still put them amongst the highest cost. Like AWA, UAIR may have found salvation in the "Go Fares." Simplicity and fare reductions helped AWA tremendously. It's too early to determine how all this will play out, but the lease reductions at PIT have helped along with the introduction of the 170. As these a/c are deployed, you should see an exponential benefit to the bottom line.

.....

 

[Dizel8]

It is just an airplane! While it may be more efficient, it really does not help, if the underlying structure is ineffecient. AWA, as an airline, is a much simpler structure and was mismanaged horribly, something they changed, but U seem, so far, unable to do so.

Untill now, the only thing that U has done, is taking money from the employees, the inherent ineffeciency is still in place. At some point, as we have seen, the employees says enough is enough, the IAM certainly seem to have taken that stance.

I think, in most employees eyes, management at U has lost all credibility and the esprit the corps is gone. Two rounds of concessions, under threats and duress, now they want another. How much more can they get, when is enough enough?

Now, I know you will say, that they can only get paid, what the market will bear and that certainly is true, but then, I feel the hole at U is soo deep, that this is not market forces at work, but the incredible debt load the company carries. The debt has to paid and if the company is unable to pay it through income, it must comes from decreasing expenses, the only expense they cut is compensation.

 

[lowecur]

It is just an airplane! Ouch! While it may be more efficient, it really does not help, if the underlying structure is ineffecient. True. AWA, as an airline, is a much simpler structure and was mismanaged horribly, something they changed, but U seem, so far, unable to do so. Give them time.

Untill now, the only thing that U has done, is taking money from the employees, the inherent ineffeciency is still in place. Lakefield is not Siegel. He is making an effort to change the inherent structure at U. They are reducing PIT to a non hub. They are adding more pt to pt. They have incorporated the Go Fares at PHL and the markets served from there to compete with WN and Independence Air. They sold 4 a/c this quarter, and will continue to sell more as the 170 comes on line. At some point, as we have seen, the employees says enough is enough, the IAM certainly seem to have taken that stance. I think if you look at the pay rates for UAIR pilots, you will find they are still very well compensated. They have offered a reduction in pay recently with an adjustment in work rules. This will help, but more may be needed, including the FA's. The IAM will continue to hold out and will not offer anything.

I think, in most employees eyes, management at U has lost all credibility and the esprit the corps is gone. Two rounds of concessions, under threats and duress, now they want another. How much more can they get, when is enough enough? Well I think this Q may give the employees a lift. It shows them that they can compete, and there is a light at the end of the tunnel. They also must understand that with the continued expansion of Independence Air, that their route structure will face growing price pressure's from the LCC's.

Now, I know you will say, that they can only get paid, what the market will bear and that certainly is true, but then, I feel the hole at U is soo deep, that this is not market forces at work, but the incredible debt load the company carries. The debt has to paid and if the company is unable to pay it through income, it must comes from decreasing expenses, the only expense they cut is compensation. That will play a part, but Lakefield is doing a good job at changing the company for the better. I think the 3rd Q, will show that UAIR still has work to do, and unfortunately employee payroll will continue to play a roll in their success or failure.

.....

 

[Boeingman]

Not so fast

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BA9B39A87%2D58BE%2D493C%2D940F%2DFC52680B455B%7D

They are selling aircraft and including a tax gain. Also, I doubt they have the ability to hedge any further.

For the "strongest quarter" this is really an abysmal result.

 

[lowecur]

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BA9B39A87%2D58BE%2D493C%2D940F%2DFC52680B455B%7D

They are selling aircraft and including a tax gain. Also, I doubt they have the ability to hedge any further.

For the "strongest quarter" this is really an abysmal result. I think that is the picture that Lakefield wants to paint. But, unfortunately the result may make it more difficult for him to get the relief he needs. I still think they will enter 11 again, but the timing may be pushed back a few quarters. Time will tell.

.....

 

[Publishers]

remember

They are still quite vulnerable to almost anything. Toughest markets, toughest places to be efficient, toughest route system.

This is definitely a situation where regionals have been tremendously helpful in keeping the airline valid.

 

[dondk]

I think if you look at the pay rates for UAIR pilots, you will find they are still very well compensated. They have offered a reduction in pay recently with an adjustment in work rules.

They (U MEC) offered a 12% reduction in pay.. U mgmt wants them to increase to 95 hours block allowable...

So.. what MAJOR, pushed the pilots to 95 block? Most regionals have cap's that are less than that. The argument I heard was the 95 block (10 hours more than they have now) would offset the 12% reduction in pay. So.. work more.. get paid less (per hour) to make the same take home pay. Does not sound to me that they are heading in the "right" direction.

Let's not forget to mention that there is "rumor" of yet another round of furloughs coming to U..

Maybe the "plan" is to have a fleet of E-170's doing domestic (as EXPRESS and lower rates), mainline (what's left standing) doing across the pond and trans-con.

 

[lowecur]

Let's not forget to mention that there is "rumor" of yet another round of furloughs coming to U..Yes, I think that is highly likely.

Maybe the "plan" is to have a fleet of E-170's doing domestic (as EXPRESS and lower rates), mainline (what's left standing) doing across the pond and trans-con. They are still taking delivery of the CRJ700's till 9/30 at PSA, but will convert 19 CRJ200's to CRJ700 or 900's. This was a rather convuluted statement, as the 900 would need to be approved by PSA ((I think). PSA could eventually be sold to Mesa. I do see the 737's being replaced by the 170's, with eventually the addition of the 190 to MidAtlantic. They will still keep the Airbus', but will look to dump the 757's when they can afford to order more 321's.

.....