USAirways - How much time? Estimates?

[blahshmah]

I guess Boeingman answered it already, Lakefield is there to salvage what he can for the Retirement system of Alabama. Is that what you mean BM?

 

[Boeingman]

What does this mean for the Retirment Systems of Alabama if they do go Ch. 7?

I hope a quick demise is avoided but politics (election year as someone mentioned) may be the only hope at this point.

Nothing. Their position will be protected with an assets sell off if it hasn't been already been included within the restricted cash or loan covenants

An election year will have no bearing on this company. UAL may be a different story since the ATSB loan is still pending.

The end will come when it is announced on CNN getting up at 0 dark 30 some morning in the not to distant future.

 

[FlyComAirJets]

75 days, 15 hours, 8 minutes

The USAirways as we know it will soon be extinct. On a more positive note, substantial portions of the company most likey will be intact as they are gobbled up in the feeding frenzy by other airlines.

When even the fleas are fleeing the rats abandoning the sinking ship, you know time is short.

Take no joy in this, this is a sad time.

 

[Boeingman]

I guess Boeingman answered it already, Lakefield is there to salvage what he can for the Retirement system of Alabama. Is that what you mean BM?

Partly. I think their position is covered already. But he will no doubt be a puppet for Bronner taking the fall for the collapse.

Godspeed to all of U's employees. Another company destroyed by inept and greedy management while the thousands of employees and their families are left in the cold to suffer, some for the rest of their lives.

Disgusting situation.

 

[B1900DFO]

All this talk about everybody pitching in to save the airline and then Seigal walks away with 4.5 million from the airlines' coffers. If he really gave a rat's as# about the company he would be happy with his 600+K salary. The hypocrisy of some of these top executives is mind boggling. I can't believe that Boyd and Randy Neil and the rest of these labor-hating analysts haven't even raised their eyebrows at another executive walking out the Us Airways' door with a trailer full of cash.

 

[Boeingman]

Re: 75 days, 15 hours, 8 minutes

The USAirways as we know it will soon be extinct. On a more positive note, substantial portions of the company most likey will be intact as they are gobbled up in the feeding frenzy by other airlines.

I'm not sure about that only from the prospect that no one whcih their assets fit nicely has any cash and/or wants to hassle with the lingering effect of a bitter merger. Especially in this economic environment.

Besides, why pay a premium for something you'll get for pennies on the dollar in a bankruptcy liquidation sale?

 

[B1900DFO]

As for when U will fail. I wish it would be soon but I'm sure they can drag it out another year or two. Bronner will still get his investment back and get three years or so of free advertising for all his other business ventures.

 

[Boeingman]

As for when U will fail. I wish it would be soon

You wish it would be soon?

Nice. Real nice. Try telling that to one of their employees and see if you keep your teeth.

 

[Andy]

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.

 

[KeroseneSnorter]

You wish it would be soon?

Nice. Real nice. Try telling that to one of their employees and see if you keep your teeth.

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!!!

 

[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.