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USAir Files for Chapter 11

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generaltso

Marcy Projects
Joined
Jan 12, 2002
Posts
653
ALEXANDRIA, Va. (AP) - US Airways, hard hit by the drop off in travel after the Sept. 11 terrorist attacks, filed for Chapter 11 bankruptcy protection Sunday, the company said.

The airline, which has mentioned bankruptcy as possibility after it lost $2.1 billion during 2001, said all of its flights are expected to continue. The Arlington, Va.-based airline said it received $500 million in financing to keep operating while it reorganizes.

"Ultimately, this effort is about our customers, employees and the communities we serve, as we seek to fix the airline's finances and return to profitability," said US Airways president and chief executive David Siegel. "US Airways will continue to operate while we complete our financial restructuring, and our customers should be confident that we will continue service to the more than 200 communities in our network."

link
 
Obviously it sucks for the additional furloughs, but those additional furloughs were going to happen regardless. Maybe now they can get back to the business of reorganizing and becoming what ever it is they want to become.

In reality, all this is going to do is allow the company to continue to be in default on their leases, and continue with the status quo. They weren't paying their bills before the filing.. now they can legally not pay their bills.

Here is a link to the report on the US Air web site

http://www.usairways.com/about/press/nw_02_0811.htm
 
I actually think this is a good thing. With the mainline dads and moms and the F/A's signing up for the concession TA, they are now protected from any further reductions if USAir was to file bankrupcy. Now that they did, they can deal with the lessee's that have been unwilling to work with U and the restructuring plan.
 
Anyone have any stats or history lessons on companys success rates in emerging from Chp 11?
 
Hopefully their stay in ch-11 is short . The rest of us dont need to be competing with an airline that does not have to pay its bills.
 
328 Dude

328Dude,

You are correct, but dont forget that the pilots agreement contains a minimum fleet-size in bankruptcy... 245 airplanes.

There are 311 today. 66 airplanes can now be removed from the fleet. US Airways staffs roughly 13 pilots/plane.

858 pilots can be furloughed now for a total of 1,928 pilots on furlough from US Airways.

Careers are being destroyed here. How can the industry absorb all of these pilots?
 
Re: 328 Dude

FurloughedAgain said:
328Dude,

You are correct, but dont forget that the pilots agreement contains a minimum fleet-size in bankruptcy... 245 airplanes.

There are 311 today. 66 airplanes can now be removed from the fleet. US Airways staffs roughly 13 pilots/plane.

858 pilots can be furloughed now for a total of 1,928 pilots on furlough from US Airways.

Careers are being destroyed here. How can the industry absorb all of these pilots?

God I hope there is no more downsizing at U. I have a lot of furloughted friends and I don't think the biz can absorb anymore pilots.

Good luck to all of the U guys out there
 
I hope this doesn't start a downward spiral of poor credit, high lease costs (a la TWA), low fares, more losses, etc. Also, if the employees take deep concessions, that will put severe downward pressure on other companies unions in order to "compete" with a carrier essentially being advantaged by bankruptsy leeway. I sure don't know the end affects of all this, but it seems that in order have any chance of eventual recovery for U, management is going to have to have a better plan than turning it into an RJ feeder for UAL . . . . . AND the economy is going to have to get expotentially better very quickly. Another very harsh fundamental question is . . . is US Air's capacity needed in the industry or would the industry as a whole be better off parsing out U's business to the existing solvent carriers?

Please don't shoot . . . . it's an academic question.
 
USAir

Hate to hear it.

As Yogi Berra puts it, it's deja vu all over again from ten years ago. E.g., Pan Am, Eastern. It might be worthwhile to reread Hard Landing by Petzinger to get an idea how the story will end.

I wonder how many millions Stephen Wolf took with him.

I hope no further jobs are lost.
 

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