What does this really mean? (USAirways)

KingAirer

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I wanted to take this opportunity to report to you on US Airways and our plans for making sure the airline continues to provide you the best service possible.

Looking back to last summer, our airline faced a number of difficult, but foreseeable financial challenges. But these difficult challenges quickly grew with the tragic - and unforeseeable - terrorist attacks of September 11. As you know, these attacks have changed our industry dramatically.

One effect has been to alter significantly the mindset of the traveling public. Every traveler knows the attacks have had a substantial impact. And while all airlines are contending with the business fallout from September 11, economically, US Airways has been the hardest hit. The post-September 11 reluctance to fly has been most pronounced on the East Coast, where most of our flights are concentrated. US Airways was most heavily impacted by the prolonged closure of Reagan Washington National Airport. Additionally, we're the only airline that has to compete not only with our airline competitors, but also with cars and trains on many of our short-haul routes. The end result is that the events of September 11 and the ensuing deep-rooted changes to our industry are challenging the short and long-term financial health of US Airways.

We are moving quickly towards both a short-term and long-term solution. Today, we filed a document with the Securities and Exchange Commission describing our various restructuring options, including our intention to apply for financing assistance from the Air Transportation Stabilization Board (ATSB). Clearly, our preferred approach, which we are vigorously pursuing, is to reach an accord with our stakeholders, including our employee groups and vendors, on a restructuring plan and to obtain the federal assistance. As the filing with the SEC indicates, however, if US Airways is unable to do so, alternative restructuring scenarios in the context of a judicial reorganization also must be considered. Simply stated, this means reorganization under the protection of the U.S. bankruptcy laws.

Under existing federal law we will submit a loan application to the ATSB by June 28. If we were going to meet this short timetable everyone in the US Airways family, including management, labor, and our vendors, has to sign off on a new business plan in the coming weeks.

We expect to meet all the criteria to be eligible for the ATSB loan guarantees and to meet the application deadline. As part of this process, we will take steps to restructure this company, but we are committed to preserving our existing routes, and serving our communities.

As this process moves forward, I will continue to keep you abreast of our plans. As a frequent traveler, you are familiar with the challenges facing the airline industry. We at US Airways are taking immediate action to ensure that we can build on our legacy of providing outstanding service and getting you where you want and need to go.
 

publisher

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Clear

It is pretty clear statement.

They will seek a loan from the Stabilization board. If that is not successful, they will file for bankruptcy under Chapter 11. They will seek concessions from their labor groups and general employee groups under this restructuring. Those employee concessions are a significant part of the loan application.
 

Boeingman

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I think it means they are headed down the Bankruptcy road. I doubt the loan is going to do much good. Guys, I feel for you. Been there done that. This reminds me of the same rehtoric and feel good memos from CAL management before the collapse.

If they tank, and I believe they will, the guys on the street will never get flying jobs.
 

skykid

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Boeingman, any chance you could be a bit more negative? Are they going to all get an arm chopped off, is that why they'll never get work again?
 

Boeingman

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skykid said:
Boeingman, any chance you could be a bit more negative? Are they going to all get an arm chopped off, is that why they'll never get work again?
You say negative, I say realistic. If you add several thousand more highly qualified pilots to the street, what is your interpretation on the effect of this in the job market today?

I have had a few guys coming in looking for work bartending that are high time furloughees. All say the same thing. There are few, if any pilot positions out there. I am just passing along my interpretation of the vibes I hear about with the job hunting.
 
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Ravengirl

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*shaking head*

You knew it was coming. I got it this morning, since I'm a "valued" Dividend Miles member. Good luck to all who work there.

Stephanie
 
3

350DRIVER

It is a very unfortunate position that Airways finds itself in at the present time although most in the industry saw this coming months ago. I think in "reality" most also realize what is going to happen after the June 28th date although nothing wrong with wishful and optimistic thinking- Too bad since I have quite afew friends there who are pretty much along for the long haul. I would have to agree with Boeingman and his beliefs.


Cheers
3 5 0
 

328dude

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If US Airways goes Chapter 11, I bet youll see a few other carriers run along the same path to remain cometitive. It's not just US Air, its everyone. How can United or Northwest for instance stay competitive? Just a thought.
 

ksu_aviator

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Ok, just a guess, but maybe the chapter 11 is so they can get an approval to sell. Remember they where trying to sell before 9/11 and I think they still want to sell. I doubt UAL will be the buyer, but someone out there (maybe foreign) will have the guts to take them on.

As for the job market if they close down. It will slow things down, but things are about to pick back up again. Northwest is going to recall all of their furloughs by the end of the summer and I imagine that nearly every other national and major airline will follow suite.

I've been told (and I haven't found anything to back it up so its just rumor) that the largest group of retirees is yet to come. With that we should see a lot of movement once again in the industry. How much is anyone's guess, but I'm optimistic. I'm always optimistic, so I'll say it will be as significant as the movement pre 9/11.

But that's just my opinion, we'll just have to wait and see what really happens. Good luck to US Air and its employees.
 

JohnDoe

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ksu.....

"Northwest is going to recall all of their furloughs by the end of the summer......."?????????

Where did you get this from?? The only official position from the company is that they anticipate starting to recall in the 4Q of this year.......and with 490 on furlough, even if they started tomorrow, I highly doubt all would be back by the end of summer.

Don't get me wrong........it would be great if you are right...
:) :)
 

ksu_aviator

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I saw it in USA Today in a somewhat unrealted article about the economy. They also said NW has the worst for ontime performance, citing Detroit during the month they switched to the new terminal in a different article.
 

Le Pilote

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They'll get the loan, then go buy America West
 
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