USAirways - How much time? Estimates?

[Boeingman]

I would expect UAIR to, at the very least, survive the summer. We'll have to see how next winter's cash flow is. UAIR's cash flow should be looking better as advance summer bookings pick up.

Lakefield is the former CEO of intl operations for Lehman Bros. He's a Wall Street money man. Perhaps he's been brought in to get UAIR's finances in order. As for his lack of airline experience, I don't think that's a huge factor in a CEO's success. UAL's Goodwin was a career man with more than 30 yrs at UAL; he was able to almost singlehandedly destroy the company.

I think that if they decide to sell off UAIR in pieces, they will want to wait until UAL emerges from Chap 11, since this could add an additional bidder for their assets (increasing the final sales price).

Boeingman, where'd you get the $200 mil unrestricted cash balance from? I was digging through UAIR's 2003 annual 10k report and it states:
"As of December 31, 2003, the Company's Cash, Cash equivalents and Short-term investments totaled $1.29 billion compared to $634 million as of December 31, 2002 ..."
I didn't find a spot where it broke it down by restricted vs unrestricted cash, but it later states the unrestricted cash requirements for the ATSB loan:

"Effective March 12, 2004, US Airways entered into an amendment to the ATSB Loan which provides for a partial prepayment of the loan and modifications of financial covenants (covenant relief) for the measurement periods beginning June 30, 2004 through December 31, 2005. Existing ratios used in financial covenants have been adjusted and reset to accommodate the Company's forecast for 2004 and 2005. In exchange for this covenant relief, US Airways will make an immediate voluntary prepayment of $250 million, which will reduce, pro rata, all future scheduled principal payments of the ATSB Loan (rather than shortening the remaining life of the loan). RSA, as one of the lenders under the ATSB Loan, will receive a pro rata portion of the prepayment amount based on the percentage of the original aggregate amount of the ATSB Loan that RSA funded. The disinterested members of the Board of Directors approved the voluntary prepayment, including RSA's receipt of its pro rata portion of the prepayment amount.

The amendment also provides for US Airways to retain, at its election, up to 25% of the net cash proceeds from any asset sale up to a total of $125 million to the extent that, among other things, definitive documentation for such asset sales is completed by February 28, 2005. In addition, US Airways may now accept a third party secured note as permitted consideration for certain asset sales (including the US Airways Shuttle and wholly owned regional airline assets) as long as certain conditions are met. Such conditions include that such note's amortization schedule shall be no more favorable than the ATSB Loan, proceeds from such note are used to prepay the ATSB Loan, the credit strength of the ATSB Loan would not be affected adversely as measured by certain ratings tests, and such note be pledged as collateral for the ATSB Loan. Finally, in consideration for the ATSB lenders amending the provision related to the going concern paragraph in the independent auditor's report for the Company's audited financial statements for the year December 31, 2003, US Airways agreed to change the month end minimum unrestricted cash covenant to exceed the lesser of the outstanding ATSB Loan balance or $700 million and to commit that no intra-month end of day unrestricted cash balance would fall below the lesser of the outstanding ATSB Loan balance or $575 million."

I know it's a lot of gobblygook (my eyes are bleeding and, as usual, my mind has gone numb from reading the report). Here's a link:
http://biz.yahoo.com/e/040312/uair10-k.html

I'm reading this as UAIR's 'escape clause' to liquidate the company in an orderly manner (by 31 Dec 05) IF it appears that the company will not be viable.

In all, I think it's a little early to put UAIR on death watch. Let's see how the summer shapes up for them.

Andy:

The $1.3 Billion from year end, less their $250 million cash payment for debt renegotiation less the $700 million restricted left them with about $350 from a lookback to Jan. 1.

Taking that figure less losses incurred to date is where I'm coming up with that figure. Very rough I know but I think I'm in the ball park.


I have a good friend in my old squadron who flies for them and is telling me basically the same info.

He thinks the game is over.

 

[Andy]

Don't let him bother you BM. Take a look at his profile. He has maybe just over a year in the business. He is young and full of himself and has no clue about his profession. Although I bet he thinks that 1900 really burns the sky up!!!

This industry is very strange. When UAIR started their hiring spree in the late 90s, I was hoping to get on that train; it looked like a fast ride up the seniority elevator. My number two was Northwest (I wish that I had gone to the interview but I had already started training at UAL; they have a lot of retirements coming up). Number three was Delta; their interview offer came after being hired at UAL also.
I ended up at UAL during the heady days of C2K, when they were THE company to work for. I was told that I won the lottery.
I don't know how things will end up; at this point I've latched my career to UAL (furloughed, 43 years old, 1500 from recall). You just never how it's going to turn out until the day you retire. Even then, you don't know if your pension will be intact.

It's a cyclical industry; strap in and enjoy the ride. Worrying these things will just give you an ulcer.

 

[Boeingman]

Don't let him bother you BM. Take a look at his profile. He has maybe just over a year in the business. He is young and full of himself and has no clue about his profession. Although I bet he thinks that 1900 really burns the sky up!!!

You're right.

What do you want to bet mommy and daddy paid for his way into the job?

 

[Andy]

Andy:

The $1.3 Billion from year end, less their $250 million cash payment for debt renegotiation less the $700 million restricted left them with about $350 from a lookback to Jan. 1.

Taking that figure less losses incurred to date is where I'm coming up with that figure. Very rough I know but I think I'm in the ball park.


I have a good friend in my old squadron who flies for them and is telling me basically the same info.

He thinks the game is over.

Thanks for crunching the numbers for me; that's NOT good. That means that they don't meet ATSB requirements. And these fuel prices don't help.

Have they been having fire sales on their tickets yet? That's always a bad sign.

 

[Boeingman]

Thanks for crunching the numbers for me; that's NOT good. That means that they don't meet ATSB requirements. And these fuel prices don't help.

Have they been having fire sales on their tickets yet? That's always a bad sign.

Not sure, but my friend says their advance bookings are way down. That is also not good.

 

[B1900DFO]

Boeingman,

I AM one of their wo employees. My comment was meant to illustrate how miserable life has become at US Airways group and it was half in jest. However, I've talked to many employees at both the WO's and Mainline who feel the same way and they all still had their teeth intact for the most part. I think many hope that a failure at Airways will make room for more hiring at airlines that treat their employees with gratitude and respect like SWA, JBLue, etc., etc.

 

[KingAirKiddo]

I'll be praying for all of you USAir types (really). Hopefully a new management will be able to turn things around in a hurry.

The first commercial flight I ever took was a USAir Boeing 737-400 from PHX-PIT in 1990 when I was 12 years old. This single flight made a huge impact on the course of my life--I determined right then and there that I would become an airline pilot and haven't wavered since.

Take care.

KAK

 

[B1900DFO]

Just to clarify a few things. I don't fly a 1900 but I'm sure it does burn the sky up (Whatever the heck that means). Seven years in the industry instead of one, wasn't paid for by mommy and daddy. I Chose a screen name that would be fairly anonymous. As for cynical and bitter, that is me in a nutshell, trying to work on that. I apologize if I offended any other Us Airways employees, it was more venting frustration than anything else. You know things are bad when you look forward to the day your employer goes under.

 

[SUPREME NTM]

Good luck to all the USair employees.

this sucks...

Later.

 

[Boeingman]

Boeingman,

I AM one of their employees. My comment was meant to illustrate how miserable life has become at US Airways group and it was half in jest. However, I've talked to many employees at both the WO's and Mainline who feel the same way and they all still had their teeth intact for the most part. I think many hope that a failure at Airways will make room for more hiring at airlines that treat their employees with gratitude and respect like SWA, JBLue, etc., etc.

Actually, I think it's even worse to wish for your own companies demise. Granted things are bad over there but who is holding a gun to your head to stay? As bad as the situation is, that company is the financial lifeblood for many people. You shouldn't be so callous as to your thoughts. Or should I say selfish?

Like Nimitz said, It will also make room for cut rate pilot whoring companies to fill the void. There won't be a Nirvana with U's demise.


Speaking of gratitude and respect. When the chips are down we'll see how much is sent from management from those companies. Look at SWA negotiations with their FA's. If you think management has the best interests of any employee at any airline you're more niave than I thought.

You want gratitude? Buy a dog.

 

[B1900DFO]

Boeingman,

Of course SWA is a corporation like the rest of them and the almighty dollar has the final say but alteast they pay lip-service to employee morale. At Us Airways it is downright war between management and labor. Why do you think pollock and company keep calling for a change in corporate culture?

As for holding a gun to my head of course I can quit but instead of quitting I choose to come on this board and bitcch a bit. I'm certainly not the only one who goes a little over the top with bitch#ng on this board but I would rather do it here and get it out of my system than in the cockpit on a four day like many others chose to. That drives me nuts. I'll tone it down here a bit though so I don't offend you. I think you take this board a little to seriously or else I don't take it serious enough. I'm not looking forward to people loosing their livelihood I was just illustrating how bad morale is over there that even some employees are completely fed up. Just message board venting.

As for callous, I seem to remember some pretty hateful comments coming from you towards those guys over at Ual. Many references to the "prima-donna brain surgeons" and how many were "salivating over ual's demise." But that's different right???

 

[On Your Six]

I'll bet Richard Branson is licking his CHOPS right about now...

Honestly, with the rising fuel prices not expected to abate any time soon and the increased pressure from SWA, Jetblue, AirTran and Delta/Song (DAL just announced hourly flights from PHL to ATL), it can't be much longer without a huge equity investment and a total strategy change. I'll bet McKinsey could draw up a new strategy for $10 million or so...

Hate to see this situation for the USAirways folks. However, let's hope there are ample opportunities for all when Virgin America and other existing LCCs fill the void...

 

[Boeingman]

Boeingman,

Of course SWA is a corporation like the rest of them and the almighty dollar has the final say but alteast they pay lip-service to employee morale. At Us Airways it is downright war between management and labor. Why do you think pollock and company keep calling for a change in corporate culture?

And you don't think it could ever happen to them? If someone told you the above 20 years ago about USAir they would of said you were smoking crack.

Mangement employee relations are only as good as the bottom line. Today's dream job could end up being a disaster by the time you retire. Assuming of course you're lucky enough to retire from the same airline.

or holding a gun to my head of course I can quit but instead of quitting I choose to come on this board and bitcch a bit. I'm certainly not the only one who goes a little over the top with bitch#ng on this board but I would rather do it here and get it out of my system than in the cockpit on a four day like many others chose to. That drives me nuts. I'll tone it down here a bit though so I don't offend you. I think you take this board a little to seriously or else I don't take it serious enough. I'm not looking forward to people loosing their livelihood I was just illustrating how bad morale is over there that even some employees are completely fed up. Just message board venting.

Over there? I thought you said "you were an employee"? I don't take this seriously and I am not offended. You're the one making an ass out of yourself.

As for callous, I seem to remember some pretty hateful comments coming from you towards those guys over at Ual. Many references to the "prima-donna brain surgeons" and how many were "salivating over ual's demise." But that's different right???

Yes I did. And I was very carefull (and you have pointed out) to include the term Brain Surgeons for a very select group over there. For the rest I feel for them and have said such time and again. I'm sure this went over your head but is that a good enough clarification for you?

And yes we have many people drooling over UAL's demise. It is a true statement. There are numerous ex FAL pilots here and anyone from the old Denver base has horror stories of the treatment by UAL employees towards CAL employees in Denver.

 

[rjcap]

Mr. Lakefield’s job is to take the airline apart. How long will that take? Who knows?

Bullseye !!

Lakefield is an investment banker. He is there to get ready to sell of the pieces to Branson and anybody else who's in the bidding. Maybe even J.O. ???

 

[B1900DFO]

Boeingman,

I agree that employee management relations can turn on a dime, you are right with that one. As for my past comments they were insensitive and made in frustration, I apologize. However I seem to remeber you saying that the arrogance at ual was typical of their brain surgeon mentality and you did not qualify that to a small group, but maybe my memory is wrong. Whatever. I'm out.

 

[grog_sit_reserv]

I will also bet that everyone's favorite snake Johnny Orenstien at Mesa has plans to fly bigger equipment at employee costs that would make Jet Blue raise their eyes.


Some Mesa sources say he's already applying the 737-300's onto the Freedom certificate which has for some odd reason been kept alive.

I'm beginning to think its all been a plan also, the April resignation bonus is pretty suspicious.

This industry is making me paranoid.

 

[blahshmah]

Not only the resignation bonus... how about that 1 hour video-appeal to U employees that was made available to EVERYONE. I'm starting to think it was merely put out for 3 reasons:

1. If Ch. 7 happens, management can point to it and blame the employees.

2. Siegal can point to it with respect to good employee communication when he gets his next airline executive job.

3. CYA for Siegel for any legal action.

Any other conspiracy theories out there about the video??

 

[Propsync]

I would think before the end of the year. Anyway, my question to all of you is- If the PDT-ALG lists/companies combine, do you think JO at Mesa will put a bid in, or could he wait for a better deal in Chp. 7? I suppose now that PSA is taking CRJ's, you could put them in as well. Just curious.

Sync

 

[MW44]

That could actually be a big step up for us WO guys at Pdt/alg if JO bought us. However if US Airways survives I guess we are all guaranteed jobs at mainline. Too bad it doesn't look like it's going to work out becuase there are going to be a lot of retirements at Airways in the next 10 years.

 

[Splert]

MESA isn’t going to buy anything. JO needed to float paper in order to make a down payment on the newest RJs. US Airways needs cash not stock or other promises to pay later.

Splert...Out!

 

[On Your Six]

Sorry to say it, but I think it's time for USAirway's to turn off the lights. Not a popular viewpoint I am sure. Clearly, more cost cuts will be sought - an endless wave of cost cuts... Haven't the employees already endured enough? How much more pain should be felt (plus the anxiety of more cuts around every corner). Next thing you know, the industry bar for wages will drop EVEN FURTHER and everyone's standards will plummet....

I believe that all of the LCCs (including the new ones - Independence Air and Virgin America) will fill in the VOID and hopefully offer jobs to the experienced employees out there. I bet that AirTran and Jet Blue would step up hiring if USAirways tanked to fill in the void - plus, Virgin America would probably accelerate startup plans and maybe even buy pieces of the old USAirways (like the Shuttle).

It's time to start over with some fresh perspectives... Good luck to all involved!

 

[Sioux115]

Mesa 737

I have heard a lot of speculation about the only way Airways can continue to operate would be at 1/3 its current size. Leaving a lot of flying open on the east coast that good ol' Johnny O intends to pick up with his new Freedom 737 adventure out of PIT and clean house.

 

[Azul]

To all USAIR employee's:

My prayers to all. Especially those with families. Hopefully things will work out. Everything said on this board is pure speculation, know one really knows what will happen, thats the only thing we know for sure.