USAir Files for Chapter 11

[generaltso]

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

 

[generaltso]

This ain't good

 

[chperplt]

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

 

[328dude]

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.

 

[KingAirer]

Anyone have any stats or history lessons on companys success rates in emerging from Chp 11?

 

[dogg]

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.

 

[FurloughedAgain]

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?

 

[captjim]

Re: 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?

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

 

[Draginass]

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.

 

[bobbysamd]

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.

 

[328dude]

DraginAss, and others. I value your question and it's a good one. Maybe it would be better, but realistically I don't think it could be done. First, USAir is small in regards to UAL and others, we only serve 200 cities last time I looked and we are mainly a east coast carrier. A little over 60 percent of the U.S. population lives east of the Mississippi. This primarily makes up all of USAIRs revenue. For an airline to start picking up 200 or even a hundred cities, I don't think just one airline has the resources to jump in and take over like you suggest. (Ex. equipment, personel, assets, ability to reserve funding for such an on taking) Someone was correct about the downsizing of the current USAIR fleet after we emerge from Chap 11th sometime in the first quarter. I hope nobody else gets furloughed from this, but I think it's going to happen. However, I do think that they will have places to fall if USAir restructures like it wants. Ex. Mid-Atlantic.

USAir folks will not recieve any further reductions in benefits or salaries then already agreed to when they signed their current TA on concessions last Thursday. I big selling point when it was thrown out for ratification. Passed with over 79% in favor of. Don't know what will happen with the remainder of the union labor groups now that court procedings are to start tomorrow morning.

Draginass, I hope I made some sense. Haven't been getting much sleep last few nights. Let me know

 

[AV1ATRX]

So my questions is, how can the industry absorb more pilots? I have to admit, as little as I know about the airlines, I am not suprised at this news. I know nobody really knows what's going to happen, but people like me fairly low on the ladder are wondering what we should do. I've seen such a wide range of opinions on a time frame for recovery, and that kind of knowledge has a big impact on flight schools, etc.

I'm also fairly young, so I'm not familiar with the furloughs of the past. Have there ever been this many before? Relatively speaking, of course. Don't get me wrong, I'm optimistic, but I also have bills to pay and am wondering if I'll ever get back into 135, which is where I was when I lost my job.

Thanks in advance for all the insight. I'm not giving up, just trying to formulate contigency plans.

Rachel

 

[flyby]

pilot absorption

The question is, how many will it have to absorb? People still want to go from point A to B. Somebody has to fly them. You hear a lot of times from companies how bad demand is for their products when in reality other factors are contributing to their woes. Could be a poor business model or competitors taking away 'their' flying. If U is losing business to other competitors then it would follow that business could grow at those carriers... increasing the demand for pilots. Overall though it might net out even.

We all need the same thing, for people to fly instead of drive, for people to go visit granny or their girlfriends or go watch a race or a football game in person. As long as the economy is slow airlines are going to have tough times. When it picks up (or at least the perception changes) the black ink will flow.

 

[RichardFitzwell]

...but realistically I don't think it could be done. First, USAir is small in regards to UAL and others, we only serve 200 cities last time I looked and we are mainly a east coast carrier. A little over 60 percent of the U.S. population lives east of the Mississippi. This primarily makes up all of USAIRs revenue. For an airline to start picking up 200 or even a hundred cities, I don't think just one airline has the resources to jump in and take over like you suggest. (Ex. equipment, personel, assets, ability to reserve funding for such an on taking) Someone was correct about the downsizing of the current USAIR fleet after we emerge from Chap 11th sometime in the first quarter. I hope nobody else gets furloughed from this, but I think it's going to happen. However, I do think that they will have places to fall if USAir restructures like it wants. Ex. Mid-Atlantic...

I honestly think USAir's routes could be absorbed by other carriers. According to Duane Worth, there are currently over 6,000 pilots on furlough. Airlines like DAL, UAL, AMR, NWA, and CAL have approximately 5 to 10 percent of their fleet under utilized or parked entirely.

It may take some time but all the cities currently serviced by USAir could be served by other airlines.

 

[chperplt]

Could be, would be... It doesn't matter.. US Airways isn't going anywhere.

Why is going CH 11 such a disaster for the airline? It might be a disaster for more pilots, but not for the airline.

Now they get to rake in the money and not pay their debt for quite a while.. Money in the bank!

Once they finalize their plan, and emerge from the BK, they get an influx of money from the Texas group and the Boston bank, plus the 900 million in loan guarantees from the government. US Airways may emerge a slightly smaller airline, but they, nor their routes are going anywhere.