Lakefield has set the deadline:

http://www.pittsburghlive.com/x/tribune-review/business/s_205575.html

Because of predictions on F/T of this happening, we decided several months ago to burn some US miles. Have the whole family scheduled for Cancun the middle of Oct. with a non-refundable deposit on a house. I knew I was taking a chance, but decided to roll the dice anyway. Sure hope we don't get burned. :(

Bankruptcy does not mean liquidation and demise of the airline. However, I do think burning of miles is warranted. Now, I think UA should be allowed to buy US ( if they can come up with the cash)!

Now, I think UA should be allowed to buy US ( if they can come up with the cash)!


FUHGEDDABOUTIT!!

Moreover, Lakefield is not kidding, those in the Bankruptcy community have been looking at that date for some time now.

How many lives can this cat of an airline expect to have?? US and their employees have got to face some stark reality checks. If they want to survive, it is asset sale time. It is pretty clear that the airline is not able to support things such as:

1. European destinations, ditch em.
2. To that end, ditch all the widebodies
3. Pretty much give up the western US, codeshare with UA
4. SELL the SHUTTLE
5. Ditch "First Class" - it is a joke now, so heave it...the best US could hope to do is have a Biz section like AirTran or do an E+ like UA.

I guess in short I'm saying stick to your old Piedmont routes and pray.

I know it hurts, but would you rather have a mediocre job/salary or just have your workplace liquidated and be hunting for work with 200k+ other aviation industry professionals?

I know many (including myself) are very happy with our short hop flights on WN out of PHL. Not that I would rely upon WN for all my travel, but it fits the bill for <2 hour flights. This will just be another BWI before long. I'm sure WN could fit quite nicely in Terminal B at PHL and continue with ease the expansion we all know is coming.

On the subject of UA/US, it SHOULD have been allowed, but it won't happen now. Heck the only reason UA will be around is because it is one of our 2 "flag carriers" and the very same politicians that vetoed UA/US will SAVE UA. I think they would have been a great fit way back when....btw, why was AA/TW allowed to go forth?? Same thing in my book. Rant over.

Happy flying all.

If US goes back into C11 protection, they could bust the union contracts just like CO did ~15 years ago.

But I still think that the US ship is most certainly sinking. And probably sinking very quickly. I doubt that US will be around after December of 2004.

Now I'm not saying that this is looking real pretty, but just remember how bleak everything has looked for a while and US' head is still above water. Let's not count them out completely just yet.

How many lives can this cat of an airline expect to have?? US and their employees have got to face some stark reality checks. If they want to survive, it is asset sale time. It is pretty clear that the airline is not able to support things such as:

1. European destinations, ditch em.
2. To that end, ditch all the widebodies
3. Pretty much give up the western US, codeshare with UA
4. SELL the SHUTTLE
5. Ditch "First Class" - it is a joke now, so heave it...the best US could hope to do is have a Biz section like AirTran or do an E+ like UA.

I guess in short I'm saying stick to your old Piedmont routes and pray.




I don't have access to all the financial records but it would seem that most European destinations are creating profits while many of the shorter routes are not. I think with the Star alliance membership they should concentrate on Europe but I would agree with gettting rid of unprofitable routes as Continental had to do. I really wish US Airways the best but everyone needs to be realistic about what the future holds. If change doesn't happen soon then this airline will be no more.

:(

If US goes back into C11 protection, they could bust the union contracts just like CO did ~15 years ago.

Not really.

Because of Lorenzo, there are a whole slew of things that have to happen before the Debtor can win a motion to abrogate labor contracts.

And, once that happens, the union in quesiton is free to engage in "self-help" (eg, a strike/work stoppage). That would kill US, since it could never replace pilots or FAs or mechanics quickly enough.

Bankruptcy does not mean liquidation and demise of the airline. However, I do think burning of miles is warranted. Now, I think UA should be allowed to buy US ( if they can come up with the cash)!

UA is in no position what so ever to buy US at this time. They are barely staying afloat as it is. They can't handle more debt.

T

[QUOTE=NJRob]How many lives can this cat of an airline expect to have?? US and their employees have got to face some stark reality checks. If they want to survive, it is asset sale time. It is pretty clear that the airline is not able to support things such as:

1. European destinations, ditch em.


There European routes are their MOST PROFITABLE. Ditching them makes PERFECT SENSE!!

Also all of their transcons flights are oversolds as well. Yes let's take away all of their profitable routes (which are not many) and really sink them super fast. Most of the other routes are losing money except the ones I mentioned above.

US Airways did not fight at BWI they just gave up. This time they are going to fight and they are putting up a very good battle. Their flights have the highest load factors they have ever had in the companies history.

Further more they need the shuttle now as part of their transformation plan.

Many, many times people on these boards have predicted US Airways would be gone 2 years ago, last year, last Christmas and so forth and so on. Guess what they are still here and actually made a slight profit.

Yes things look crappy at the moment however, they have a chance still to make it and it is possible.

Your not going to get your wish with the asset sales. They are keeping all what they have and in their plan they plan on starting to grow again.

I think they can make it. Yes the odds are against them however, it is not impossible.

T
Man I wonder where some of you get your information from.

Shouldn't the title include the word "again?"

1. European destinations, ditch em.
2. To that end, ditch all the widebodies
3. Pretty much give up the western US, codeshare with UA
4. SELL the SHUTTLE
5. Ditch "First Class" - it is a joke now, so heave it...the best US could hope to do is have a Biz section like AirTran or do an E+ like UA.

I guess in short I'm saying stick to your old Piedmont routes and pray.



I'd like to archive this as the absolute worst possible way to save US Airways.

I could not disagree more with these suggestions. :td:

This summer is key US must make money during the summer when everybody travels. If US next quarter is real bad and it goes back into bankruptcy I can see liquidation before the end of the year. As for United buying them that ship has long set sail and the best thing that can happen for United's IAD hub is for US to liquidated. The next quarter's conference call will be the most important call for US.

This summer is key US must make money during the summer when everybody travels. If US next quarter is real bad and it goes back into bankruptcy I can see liquidation before the end of the year. As for United buying them that ship has long set sail and the best thing that can happen for United's IAD hub is for US to liquidated. The next quarter's conference call will be the most important call for US.

That won't happen either. US Airways still has enough money to make it through first quarter of next year.

Some of you people need to start READING their press releases and listening to their conference calls before trying to predict the future.

They have no plans on selling anything now.

United would still be a mess whether US was around or not.

T

The termination of excess employees will continue until morale improves. :o

I'd like to archive this as the absolute worst possible way to save US Airways.

I could not disagree more with these suggestions. :td:


OK GEO I DEFINITELY SECOND THIS. I mean I never want to directly criticize what a fellow FTer posts and I never intend any malice in my comments, but honestly - NJRob I really don't think you have a clue what you're talking about.

And FAN- I totally agree with you.

Europe and Carribean routes are the most profitable routes in the system. And US is already doing what CO did 15 years ago. Remember CO's hub at Denver's Stapleton? That was dissovled, and US is dissolving PIT now, too.

But Clue- You are correct; Lorenzo's actions warranted change so that something like that could never happen again. BUT look at United's employees. A cousin of mine is an employee for UA, in Ch. 11, and many of the employees' contracts have indeed been dissolved. UA was promising stock benefits back in 2000: my cousin was promised stock benefits in return for pay cuts. As a pilot, his pay was cut by something ridiculous like 25%. Furthermore, UA promised that these cuts would be fully reinstated in only a few years, and that pay would return to its original levels. So the UA employees accepted, but then came Ch.11. Once UA filed for Ch.11, the stock basically crashed, and UA was able to dissolve some/part of and/or all of some employees' contracts, including my cousin's. His stock options were gone, and UA was able to back out of their original promise to return pay to its original levels. Also, the Ch. 11 had negative effects on retirement plans as well, but I'm not sure what those were exactly. My point being: even though laws have been created and ammended since Lorenzo's days, UA still has some authority over its employees' contracts and labor agreements without gov't intervention. I really don't know the exact specifics of the situation, it really is a HUGE ordeal. My cousin retired from UAL in 2003 and is now working for GE's engineering department. I really would say that it is the employees of a company that really bear the burden of a Ch. 11 filing.

This topic brings up another issue in my mind, as well. It almost angers me that employees and unions are so resistant to accept pay cuts that they are willing to give up their jobs!! I mean I'd like to ask union leaders if they understand that if they don't give up small pay cuts now, they'll have literally NO pay later! It baffles me, but then on the other hand . . . should people that have relied on a company for many years and that have made their living from, really be forced to out of the clear blue swallow a cut in pay returning them to the pay they received 10 years ago? It really leaves me confused as who to hate- US or the unions? :confused:

A transcript of a recent press conference has been found in a trash can outside USAir headquarters. Here's what it said:

USAir CEO Brice Pondfield today warned company employees of draconian cuts, should they not make necessary concessions he has demanded. Firstly, said Pondfield, we'll not go forward with the planned hub in Phenix City, Alabama. "If you think downsizing PIT, and losing those overnights in Erie was bad enough, you ain't seen nuthin", he said. Adding his thought, Marketing Chief B.B. "Beebie" Bee, chimed in, "this is bad. Worse than when I lost my tryout for 'Survivor'. Failure to obtain employee cooperation could result in us having to substitute commuter planes on major routes, overcrowding at Philly, no food onboard, elimination of glassware in First Class...and that's just the start." Beebie Bee seemed confused when told that had already happened. "I haven't been the same since we pulled the E inventory", he remarked. Asked for his thought, Pondfield muttered, "August 19th" several times. One astute reporter in attendance finally chimed in, "that's the date for the new 'Survivor' tryouts, you dummy", at which point Bee was heard to say "somebody call my name?" Pondfield then scowled, said something about ungrateful elite flyers, compared them to similar employees, and closed the press conference by announcing another first. RJ service from Montgomery to London Gatwick via Buffalo, Newfoundland, Greenland, Iceland, the Shetland Islands, and a fuel stop in the Scottish town of Bumluck (or something that sounded like that). The bad news. Due to limited seats, and unprecedented demand for GO fares, no award seats on it for 7 years. A few hours later, Southwest announced it, too, would fly the route. :D

while bankruptcy does not always mean liquidation, my prediction is that it will for U. This is because it may be in RSA's interest. RSA stands to lose all their equity in bankruptcy. They may feel they have more to gain from selling all the assets and trying to preserve some equity.

while bankruptcy does not always mean liquidation, my prediction is that it will for U. This is because it may be in RSA's interest. RSA stands to lose all their equity in bankruptcy. They may feel they have more to gain from selling all the assets and trying to preserve some equity.


Here we go again. The professionals on this board which have been wrong over and over again. And for some reason IFlyswa.com is always giving quotes and predictions that are incorrect. Sorry to tell you IFlyswa.com but your WRONG AGAIN. Do you read any of the press releases or do you just do guess work all the time?

RSA does own a huge chunk of US Airways however, they are not the ones who will be making the decisions of what the company will be doing.

US Airways still has many more months left to burn cash. Let us hope they can get things turned around. They bought themselves some more time since they made a small profit this past quarter. In which IFlySWA.com was wrong about that too.

People get your facts straight on here.

T

Here we go again. The professionals on this board which have been wrong over and over again. And for some reason IFlyswa.com is always giving quotes and predictions that are incorrect. Sorry to tell you IFlyswa.com but your WRONG AGAIN. Do you read any of the press releases or do you just do guess work all the time?

RSA does own a huge chunk of US Airways however, they are not the ones who will be making the decisions of what the company will be doing.

US Airways still has many more months left to burn cash. Let us hope they can get things turned around. They bought themselves some more time since they made a small profit this past quarter. In which IFlySWA.com was wrong about that too.

People get your facts straight on here.

T


technical correction here: you can not make definitive statements about whether predictions are right or wrong without seeing what the future holds. So, in terms of my prediction, IF U goes bankrupt, it will liquidate, you can right now say whether it is right or wrong. First of all, given the conditional nature of the statement, it only applies if U goes bankrupt. In that case, the only way to know if the statement is right or wrong will be to wait and see whether U makes it out of bankruptcy, or liquidates.

A transcript of a recent press conference has been found in a trash can outside USAir headquarters. Here's what it said:

USAir CEO Brice Pondfield today warned company employees of draconian cuts, should they not make necessary concessions he has demanded. Firstly, said Pondfield, we'll not go forward with the planned hub in Phenix City, Alabama. "If you think downsizing PIT, and losing those overnights in Erie was bad enough, you ain't seen nuthin", he said. Adding his thought, Marketing Chief B.B. "Beebie" Bee, chimed in, "this is bad. Worse than when I lost my tryout for 'Survivor'. Failure to obtain employee cooperation could result in us having to substitute commuter planes on major routes, overcrowding at Philly, no food onboard, elimination of glassware in First Class...and that's just the start." Beebie Bee seemed confused when told that had already happened. "I haven't been the same since we pulled the E inventory", he remarked. Asked for his thought, Pondfield muttered, "August 19th" several times. One astute reporter in attendance finally chimed in, "that's the date for the new 'Survivor' tryouts, you dummy", at which point Bee was heard to say "somebody call my name?" Pondfield then scowled, said something about ungrateful elite flyers, compared them to similar employees, and closed the press conference by announcing another first. RJ service from Montgomery to London Gatwick via Buffalo, Newfoundland, Greenland, Iceland, the Shetland Islands, and a fuel stop in the Scottishh town of Bumluck (or something that sounded like that). The bad news. Due to limited seats, and unprecedented demand for GO fares, no award seats on it for 7 years. A few hours later, Southwest announced it, too, would fly the route. :D


LOL. LOL. I thouroughly enjoyed reading that!!!! :D :cool: :)

That won't happen either. US Airways still has enough money to make it through first quarter of next year.

Not really. They are down to something like 900 million or so of unrestricted cash. If they really want to ride out Chapter 11 without bridge/DIP financing, they'll have to file with 700+ million in the bank, as all vendors demand cash on delivery from bankrupt entities.

In fact, some of US' vendors are requiring cash on delivery now.

Some of you people need to start READING their press releases and listening to their conference calls before trying to predict the future.

That's funny. You can still go back and read about how they'd never outsource airbus overhaul and were not leaving PIT and were buying big RJs with first class, and so forth.

You cannot accurately predict anything based on what CCY says publically.

With such a huge debt burden it would be extremely hard for US to get bankruptcy financing at anywhere decent rate. That unfortunately could dash any hopes of any exit from bankruptcy :( . While they do have a large amount of cash on hand you have to look at the amount of outstanding debt they have.

but I believe drastic action is needed now, not little band aids such as GoFares and union/mgmt bickering resulting in paltry cost cuts.

What is so far fetched about some of my suggestions? Sure, some will create a loss of pride and prestige, but isn't it better to have some form of US Airways around than none at all ?- see the Swissair/Swiss or Sabena debacles. Many airlines have given up first class and gone to all coach or biz only...WN of course, Jet Blue, easyJet, Ryanair, and overseas many just have biz...BA, KLM, Aer Lingus all have planes that cater to high yield travellers with a biz cabin that extends half or more of the plane. Is it beyond rational thinking to believe US could not pull this off on maybe the Shuttles or biz hub to hub?

I know Euro routes are profitable, but I still believe US should concentrate on what is it's greatest strength...the east/south/caribbean. Why not do what the Euro carriers do....make half the cabin "biz" or whatever you want to call it and charge a slight premium for it? I personally don't need a plastic cup of Rot-gut wine for a one hour flight from PHL to CLE, but I would like a bit more seat pitch and width. THAT I would pay for....US should be thinking how to be the first airline ff's think of when they travel east of the Mississippi. This is their bread and butter, and if costs must be cut, then axe what is on the fringe of your business.

Cutting out Europe is not so far fetched. Staffing stations, call centers, crew rest, gates in Euros and Pounds costs a pretty dime. I know many friends on the other side of the Atlantic would never dream of flying US here. As far as western US routes, why NOT let UA handle some or all...isn't that what an alliance is for - to help out another carrier where they are weak? UA offers much better transcon service anyway. US could then redeploy assets in the east and carribean with an improved product and frequency.

Hey, I have lots of Div Miles too, and I would hate to see any US employees have financial hardship, but my OP was meant to emphasize the dire straits of this airline and radical thinking IS needed. I would hate to see the day when US assets would be a fire sale. Maybe this reluctance to think outside of the conventional wisdom will doom US. Thanks for letting me respond without taking cheap shots in what is mostly a civilized forum.

Safe travels to all.

On the serious side, the're doing what they have to do. Lakefield, according to another thread, apparently thought better of his original strident rhetoric (which just seemed to paraphrase the last couple of CEO's), and issued a release gushing with accolades for the help. The only thing left to drive down costs is to force more employee give ups. The difference between this airline and one of these new guys like AirTran or JetBlue, is that USAirways employees have been making the big bucks. It wasn't too long ago the pilot contract guaranteed them it would match the highest wage paid by any domestic airline, plus one percent. Coming down like that has to be difficult to handle, if you work there. Meantime, over at the LCC's, you have eager kids, who probably would pay them just to have those jobs. Complete opposite ends of the spectrum. So they are hassling that, plus, it appears they are going back to an operational strategy based very much on the old paradigm (direct NYC to Florida, full size aircraft on certain routes that had been switched to Express, more non hub flying, etc.). It becomes a case of "trying to turn around the turnaround", and trying to do it with people who until recently, had pretty comfortable lives. Labor is a lot wiser today, and the company got further than I would have thought, particularly in light of the militant pilot group, which, even so, grasped the severity of the situation, and has taken heavy pay and benefit reductions. They don't see much progress, and I'm sure feel the company has squandered the opportunity they provided. In that atmosphere, getting more is going to be tough. Concurrently, it seems the line decisions are still being made by the same characters who got them where they are now, by continuing to come up with operating strategies that can charitably be described as somewhere between ineffective and unfortunate.

It is pretty clear that the airline is not able to support things such as:

1. European destinations, ditch em.
2. To that end, ditch all the widebodies
3. Pretty much give up the western US, codeshare with UA
4. SELL the SHUTTLE
5. Ditch "First Class" - it is a joke now, so heave it...the best US could hope to do is have a Biz section like AirTran or do an E+ like UA.



NJRob,

I don't see much of an airline left if US were to listen to these suggestions. But then again, that's why I enjoy FT, it's sometimes informative, other times sublime, and occassionally good for a chuckle. :rolleyes:

Barry

Not really. They are down to something like 900 million or so of unrestricted cash. If they really want to ride out Chapter 11 without bridge/DIP financing, they'll have to file with 700+ million in the bank, as all vendors demand cash on delivery from bankrupt entities.

In fact, some of US' vendors are requiring cash on delivery now.



That's funny. You can still go back and read about how they'd never outsource airbus overhaul and were not leaving PIT and were buying big RJs with first class, and so forth.

You cannot accurately predict anything based on what CCY says publically.

exactly. the costs of bankruptcy kick in, in the form of impaired ability to run the business, well before the cash actually runs out-- no vendors want to be left holding the bag. For one instance, US was days away from losing charge-acceptance privileges with American Express before filing last time round.

it remains unlikely that a quick liquidation would ensue in Ch 11. Even if RSA wanted that, they'd no longer get to call the shots once the court is involved. If RSA really wanted liquidation they'd be better off signaling so up-front by just filing Ch 7 instead; de facto they do still run the show, as long as its current control structure exists. Instead, a ch 11 filing would lead to more dilatory plan filiings and interim financings, probably drift the company into the start of next summer when perhaps collapse would be final.

So youre saying that after I got my 2x EQM postcard in the mail it wasnt such a great idea to buy tickets for 47K actual miles so I would hit CP again? ;)

The 2005 CP card will make a great souvenier.

The 2005 CP card will make a great souvenier.

And 3 extra weekend visits to London. So thats not so bad. I think I will upgrade on those LGW flights if I can, however.

Well, I am continuing to hope for the best, and I haven't started losing sleep yet (and I have 2 tickets to Africa in January on some US metal).

I hope they can work this out. I think there is still something worth saving here...............

Up until US reported Q2 earnings, I was very, very skeptical that they could EVER turn a profit. The fact that they proved that they CAN turn a profit, with high labor costs and high fuel costs proves that they have a sound franchise at the foundation of their business. Therefore, US is again IMHO fixable and who knows, call me crazy but they just might outlast some other majors that are still dealing with serious losses.

Up until US reported Q2 earnings, I was very, very skeptical that they could EVER turn a profit. The fact that they proved that they CAN turn a profit, with high labor costs and high fuel costs proves that they have a sound franchise at the foundation of their business. Therefore, US is again IMHO fixable and who knows, call me crazy but they just might outlast some other majors that are still dealing with serious losses.

While it's not guaranteed, I think you are correct. The only other "legacy" airline to even come close to a real profit was AA, and they just happen to be the biggest airline on the planet.

Now...what to do to fix it? I'm not sure, but I'm guessing that plastic wine cups in their so-called "premium" cabin is not the answer....

exactly. the costs of bankruptcy kick in, in the form of impaired ability to run the business, well before the cash actually runs out-- no vendors want to be left holding the bag. For one instance, US was days away from losing charge-acceptance privileges with American Express before filing last time round.

The losss of charging privileges would be disaster even in a second Chapter 11. Has anyone else noticed that a few weeks ago Bank of America bought a credit card processing company making BOA one of the leaders in this field. Perhaps this is related somewhat to the bad financial condition of US. I'm not sure how far BOA will go to prop up US (Chase and Citibank are doing this for United though).

The losss of charging privileges would be disaster even in a second Chapter 11. Has anyone else noticed that a few weeks ago Bank of America bought a credit card processing company making BOA one of the leaders in this field. Perhaps this is related somewhat to the bad financial condition of US. I'm not sure how far BOA will go to prop up US (Chase and Citibank are doing this for United though).


That was 2nd quarter 2003.

That was 2nd quarter 2003.

This was what I was talking about. I'm not sure if the growth of Bank of America (Fleet merger, etc) would help or hurt US airway's chances to get bankruptcy funding from Bank of America, or if the new found strength in credit card processing could help US since the last time it was the potential loss of charge processing that led to the quick (perhaps too quick) emergence from chap 11.

http://www.informationweek.com/story/showArticle.jhtml?articleID=23900686

One of the biggest hurdles for US is making those ATSB payments, not to mention the other debt payments. Those will more than overcome whatever profits that they are making right now.

In fact, NW is targeting to cut employee costs by the end of this year, when payments start coming in next year in larger amounts.

FYI

US was in the local news yesterday, they want the reservation agents (some work in Winston Salem) to take a 50% wage cut to save their jobs. The WS news station was interviewing a woman who was representing the union (CWA?) and she showed that a res agent at the top of the pay scale makes around $21/hr. US wants that person to make about $10.50/hr. Those who don't want the pay cut, they were going to be offered some sort of early retirement package, they mentioned benefit extentions for a year after leaving.

I'd say the end of September is going to get ugly for US and personally I predict a strike by one of the labor groups supported by the rank and file and the quick entry back into Chapter 11.