CHAPTER 11 Filed THIS AFTERNOON

Old Sep 12, 04, 3:36 pm
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CHAPTER 11 Filed THIS AFTERNOON


The beloved airline has filed chapter 11 this afternoon in court. Hope they manage to avoid liquidation.
A long standing US Airways fan from Germany.
Best wishes to everyone and greetings to the Unions for their great negotiation skills!
A sad day for US and this time I have fears for their survival.
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Old Sep 12, 04, 3:41 pm
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I posted that earlier in the long news update thread. It's very sad. Plus the Flight Attendants just broke off talks. I hope everyone uses this time to come to agreements to avoid Chapter 7 filings.

http://biz.yahoo.com/prnews/040912/nysu016_1.html

http://biz.yahoo.com/rb/040912/airli...endants_4.html
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Old Sep 12, 04, 3:47 pm
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Very sad.

Hope they can meet someplace above Chapter 7.
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Old Sep 12, 04, 3:51 pm
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There is more information here:

http://www.transformingusairways.com
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Old Sep 12, 04, 3:54 pm
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Well, let's hope they pull through. I hope no major creditors gets impatient and wants to force a liquidation.

Probably those to feel the most pain, even if they emerge from Ch 11, will be the employees. The lack of progress on labor negotiations appears to have been the primary trigger here.
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Old Sep 12, 04, 4:06 pm
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If they do come out of Ch 11...I think the unions might regret that they did not work something out when they had the chance.

Anyone on here have experience with cases of Ch 11 (or in this case ch 22 )

What exactly can the judge force or do to the unions. What would happen if the judge were to give what management were to ask. Could the unions go on strike? How would all of this work?

Does US Airways need a new investor now? Does this mean Bronner loses all of his stock in US Airways?
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Old Sep 12, 04, 4:17 pm
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Truly sad.

Although the ability to survive and re-emege succesfully from Ch. 11 is a possiblility, it is unlikely IMO.

With their investment essentially gone, RSA will probably walk away. That would only leave schemers or mountebanks to try to pick up the pieces.

I hope ALPA reps are happy collecting unemployment. This is truly a sad day.
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Old Sep 12, 04, 4:18 pm
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Originally Posted by US AIRWAYS FAN
If they do come out of Ch 11...I think the unions might regret that they did not work something out when they had the chance.

Anyone on here have experience with cases of Ch 11 (or in this case ch 22 )

What exactly can the judge force or do to the unions. What would happen if the judge were to give what management were to ask. Could the unions go on strike? How would all of this work?

Does US Airways need a new investor now? Does this mean Bronner loses all of his stock in US Airways?
1. The Debtors can seek a temporary abrogation of sections of the labor contracts if it can prove that such a move is in the best interests of the estate. In the UAL bankruptcy case, the company sought and obtained such relief from the IAM, in the form of a court-imposed pay cut.

2. The Debtors can also seek a permanent abrogation of the labor contracts, after fulfilling a set of stringent conditions. This is much easier said than done - judges are EXTREMELY hesitant to throw out labor contracts altogether, even when its clear that the contract is out of touch with reality.

3. US will likely need new investors going forward in order to emerge from bankruptcy. The company is in desparate need of a cash infusion, and as today's release demonstrated, few financiers are currently willing to throw any money into the enterprise.

4. Bronner will almost certainly lose his euqity investment in US Airways should the company emerge from bankruptcy or otherwise liquidate.
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Old Sep 12, 04, 4:21 pm
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Being a lawyer but not a bk specialist I can tell you that Bronner will loose all of his investment with some certainty like all stockholders. US does not necessarily need a new investor but it would be very helpful. Talk is that it might be hard to find anyone and that is where the risk of liquidation comes into play.
From the unions perspective I can not understand their tactic at all. All contracts are now open for renegotiations and it is likely that the judge will approve tough changes.
Not to be talking about the image loss by a second bk in a short time. People might avoid US at least for some weeks further destroying US reputation and balance sheet. US seems to be a prime example of the self destroying forces of bad management unions relation. I would love to hear from the smart union representatives what was won by their rejection of the companies proposals?
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Old Sep 12, 04, 4:23 pm
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From the http://www.transformingusairways.com site:

US Airways has also received permission from the Court to allow the company to honor all key agreements related to its Dividend Miles program and the co-branded Bank of America/Dividend Miles credit card.
Whew! ^^^^^
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Old Sep 12, 04, 4:37 pm
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More info:


For Our Customers

I want to make you aware of an important but necessary step our company has taken. US Airways has filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. This action is intended to provide the airline the opportunity to implement its Transformation Plan built on lower costs, a simplified fare structure,
a strong position on the U.S. East Coast, and a growing presence in Europe, the Caribbean and Latin America.

You should understand that US Airways is not going out of business. The Chapter 11 process will allow US Airways to complete its restructuring initiatives while we continue normal day-to-day operations. There will be no changes to our flight schedule as a result of this filing. Every ticket will be accepted and honored in accordance with current US Airways policies; refunds and exchanges will be made as usual. Reciprocal agreements with other air carriers, including affiliates, Star Alliance and codeshare partners, will remain fully intact and continue without interruption.

I want you to know that this announcement has no impact on your Dividend Miles account and the many benefits you receive as a member. While our restructuring efforts focus on achieving a competitive cost structure, there will be no direct impact on our ability to professionally serve you. This action will not affect your ability to earn or redeem Dividend Miles to the more than 750 worldwide destinations we offer as a Star Alliance member airline. Additionally, the US Airways Club network continues to operate without interruption for its members.

We remain committed to our Transformation Plan, which provides many positive benefits to customers, including better service, more flights and low fares. We continue to expand GoFares, which provide lower, simpler fares while not compromising amenities like seat assignments, first class cabins and airport clubs that you have come to expect from US Airways. Enhancements to www.usairways.com as well as airport technology improvements will make traveling even easier. Our strong positions in Boston, Charlotte, New York, Philadelphia, and Washington D.C., allow us to offer even more service to the most popular destinations, and with our new international gateway in Fort Lauderdale, our Caribbean and Latin America expansion continues, offering even more choices for customers.

We have established www.transformingusairways.com as a dedicated Web site with information about our transformation. As this process continues, the site will be updated regularly.

Thank you for your continued support. We are proud that you are our customer, and we are ready to serve you on your next US Airways flight.

Sincerely,

Bruce Lakefield
President and Chief Executive Officer
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Old Sep 12, 04, 4:46 pm
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How much cuts do you really want these people to take. They have given and given and it is always "not enough". they could work for free and it wouldn't help. There comes a point where it is not worth it to work for peanuts.
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Old Sep 12, 04, 4:49 pm
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My part

I just bought a Y ticket for next week. They need the $$ more than my company.
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Old Sep 12, 04, 4:59 pm
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On that note I will authorize our travel department tomorrow to buy me an Envoy ticket to NYC for an upcoming business trip and I hope that many loyal travelers are doing the same.
Many people at US have been good to me so I realy hope they are making it. It is a díscounted ticket though but 2600 USD are not bad if you need any cent. I just hope that the unions get their act together.
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Old Sep 12, 04, 5:04 pm
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Originally Posted by Gman3
How much cuts do you really want these people to take. They have given and given and it is always "not enough". they could work for free and it wouldn't help. There comes a point where it is not worth it to work for peanuts.
How much is enough? Match the LCCs - if this was done then there would have been a reprive. It is ridiculous, and always the union mantra, that working for free wouldn't have helped. Just matching the employee costs with Jetblue or SWA would have been enough. All the legacies have high costs - USAirways was the highest per mile flown and the vast majority was labor costs. 80 hrs per month is a full time job there - they were asking for more hours from full timers - many of us don't think that was unreasonable. Rare is the person that retires at 60 and has full health insurance and pharmacy for life, a defined benefit pension, etc. This is the problem that now will be explored by the BR Judge.
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