<soapbox>
As you probably know, I'm not real happy with USAirways.
Their "new" (read: old) plan is to continue to cut wages, blame their grief on the pilots and flight attendants, and then repeat ad nauseum.
Methinks they'd be better off facing the competition head on and get the 'fighting spirit' to survive. Employee concessions and massive layoffs didn't work smart guys? Shoot, perhaps if you do cut and layoff more, it'll work this time! Not.
It almost reminds me of the joke we told about our old CEO Ron Allen in the early 1990's. Ron decided to get into the watermelon business. He's going to sell each watermelon at a loss, but make it all up with volume.
Seems like USAir continues to blame the battery for the engine's inability to start when it needs a starter coil and a friggen alternator.
</soapbox>
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US Air Shops Assets -Sources
Thursday January 8, 5:15 pm ET
By Kathy Fieweger and Tom Johnson
CHICAGO/NEW YORK Jan 8 (Reuters) - US Airways (NasdaqNM:UAIR - News), still struggling financially less than a year after emerging from bankruptcy, is looking to sell a variety of assets including its East Coast shuttle, several airline and banking sources said on Thursday.
Industry sources said the sale plans were a clear indication that business is still tough at the No. 7 U.S. airline despite an eight-month stay in bankruptcy that extracted concessions from unions, lessors and other parties.
While the situation is complex, sources said the decision to sell assets was prompted mostly by the company's failure to win pilot union support for a revised business plan proposed by management and its need to meet terms of debt obligations.
The stay in Chapter 11, which ended in March, in some cases worsened relations with some organized labor groups as pay rates fell and pensions were slashed. Pilots last month called for the resignation of Chief Executive David Siegel, saying they had lost faith in his ability to save the airline.
Shares of the airline, which recently began trading on Nasdaq, fell 5.6 percent or 38 cents to $6.36 on Thursday.
US Airways has hired Morgan Stanley to advise it on the sale process, sources said.
PLENTY OF INTEREST
The assets are being shopped around to various airlines including low-cost carriers and other parties including Richard Branson, the British airline entrepreneur, sources said.
The assets include the airline's shuttle service between Boston, Washington and New York, its US Airways Express regional jet service, and possibly one of its three hubs, according to sources. The hubs are in Pittsburgh, Philadelphia and Charlotte, North Carolina.
Also on the block, according to sources, are various gates, slots at slot-controlled airports -- for example at New York's LaGuardia airport -- and routes. No aircraft or transfer of employees is contemplated at this point, they said, speaking on condition of anonymity.
"It is a partial breakup (of the company), that's for sure," one banking industry source said. "A lot of strategic investors would be interested in a combination of these assets. The question is going to be how the pilots respond to this."
US Airways also has to compete against new low-cost services being offered by competitors.
Southwest Airlines (NYSE:LUV - News), a formidable foe for any airline, recently announced it would begin service to Philadelphia.
US Airways wants any potential interest submitted by the middle of the month, according to one source, with the board set to meet in February to decide what to sell.
In a message to employees earlier this week, US Airways Chairman and Chief Executive David Siegel expressed new frustration with the refusal by labor groups and postponed hub visits to discuss strategy with employees.
"As a result (this outreach) is now on hold and we're going to have to spend the next few weeks examining our alternatives to meet our financial commitments," Siegel said in his taped message.
Siegel stressed the airline must meet financial targets in the first half of this year to comply with terms of the $900 million federal loan guarantee,
Complicating matters, sources noted, is US Airways' loan guarantee from the federal government, which would have to approve any transfer. US Airways obtained loan backing from the Air Transportation Stabilization Board to get out of bankruptcy last March.
US Airways had no comment on the issue. Morgan Stanley also declined to comment.
As you probably know, I'm not real happy with USAirways.
Their "new" (read: old) plan is to continue to cut wages, blame their grief on the pilots and flight attendants, and then repeat ad nauseum.
Methinks they'd be better off facing the competition head on and get the 'fighting spirit' to survive. Employee concessions and massive layoffs didn't work smart guys? Shoot, perhaps if you do cut and layoff more, it'll work this time! Not.
It almost reminds me of the joke we told about our old CEO Ron Allen in the early 1990's. Ron decided to get into the watermelon business. He's going to sell each watermelon at a loss, but make it all up with volume.
Seems like USAir continues to blame the battery for the engine's inability to start when it needs a starter coil and a friggen alternator.
</soapbox>
----------------------------------------------------------
US Air Shops Assets -Sources
Thursday January 8, 5:15 pm ET
By Kathy Fieweger and Tom Johnson
CHICAGO/NEW YORK Jan 8 (Reuters) - US Airways (NasdaqNM:UAIR - News), still struggling financially less than a year after emerging from bankruptcy, is looking to sell a variety of assets including its East Coast shuttle, several airline and banking sources said on Thursday.
Industry sources said the sale plans were a clear indication that business is still tough at the No. 7 U.S. airline despite an eight-month stay in bankruptcy that extracted concessions from unions, lessors and other parties.
While the situation is complex, sources said the decision to sell assets was prompted mostly by the company's failure to win pilot union support for a revised business plan proposed by management and its need to meet terms of debt obligations.
The stay in Chapter 11, which ended in March, in some cases worsened relations with some organized labor groups as pay rates fell and pensions were slashed. Pilots last month called for the resignation of Chief Executive David Siegel, saying they had lost faith in his ability to save the airline.
Shares of the airline, which recently began trading on Nasdaq, fell 5.6 percent or 38 cents to $6.36 on Thursday.
US Airways has hired Morgan Stanley to advise it on the sale process, sources said.
PLENTY OF INTEREST
The assets are being shopped around to various airlines including low-cost carriers and other parties including Richard Branson, the British airline entrepreneur, sources said.
The assets include the airline's shuttle service between Boston, Washington and New York, its US Airways Express regional jet service, and possibly one of its three hubs, according to sources. The hubs are in Pittsburgh, Philadelphia and Charlotte, North Carolina.
Also on the block, according to sources, are various gates, slots at slot-controlled airports -- for example at New York's LaGuardia airport -- and routes. No aircraft or transfer of employees is contemplated at this point, they said, speaking on condition of anonymity.
"It is a partial breakup (of the company), that's for sure," one banking industry source said. "A lot of strategic investors would be interested in a combination of these assets. The question is going to be how the pilots respond to this."
US Airways also has to compete against new low-cost services being offered by competitors.
Southwest Airlines (NYSE:LUV - News), a formidable foe for any airline, recently announced it would begin service to Philadelphia.
US Airways wants any potential interest submitted by the middle of the month, according to one source, with the board set to meet in February to decide what to sell.
In a message to employees earlier this week, US Airways Chairman and Chief Executive David Siegel expressed new frustration with the refusal by labor groups and postponed hub visits to discuss strategy with employees.
"As a result (this outreach) is now on hold and we're going to have to spend the next few weeks examining our alternatives to meet our financial commitments," Siegel said in his taped message.
Siegel stressed the airline must meet financial targets in the first half of this year to comply with terms of the $900 million federal loan guarantee,
Complicating matters, sources noted, is US Airways' loan guarantee from the federal government, which would have to approve any transfer. US Airways obtained loan backing from the Air Transportation Stabilization Board to get out of bankruptcy last March.
US Airways had no comment on the issue. Morgan Stanley also declined to comment.
