Re: USAirways, not that we didn\'t see it coming
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So they're almost done?
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It all depends if they can get financing from outside investors, and cancelling or deferring
aircraft deliveries would certainly help.
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At this point they're not even looking for outside investors. They have reached an agreement with the ATSB and RSA to use some of their cash position to support their operations instead of getting DIP financing.
If anyone were to actually READ the court filings and transformation plan, instead of listen to rumors all day long you would find out that they are really doing the Ch. 11 thing to protect themselves from creditors while they go after lower costs, mainly from labor. Since labor was not willing to deal outside of Ch. 11, they're going to have to deal inside Ch. 11, and if they're not willing to deal at all, then the judge will do them a deal instead, which is bound to be less attractive than a consensual agreement.
New labor agreements are at the absolute core of the plan. The rest of the plan includes streamlined scheduling and utilization, fare optimization and a whole host of other goals, all of which will lose the company more money unless they can cut costs. So the first priority I would say would be to cut costs. Then they can work on restructuring their operations.
Now, whether or not they can achieve the various aspects of the transformation plan and whether the transformation plan will work will determine whether or not they survive. they miscalculated the situation (along with a lot of other people) last time around, so we'll see if they get it right this time.
One thing which will be difficult for them to do will be to arrange financing for any further RJ deliveries, (due to their very low credit rating and lack of leverage on their balance sheet). This may very well be a major part of their restructuring plan. If it is, then they may be forced to contract out further RJ flying to carriers like TSA, MESA, CHQ et al who can finance the aircraft. If they can get the financing somehow, then they will likely give the RJs to PSA and MDA. I am sure they would LIKE to bring the flying in-house, but may be forced to outsource the flying in order to get the transformation plan to work like they want it to.
The court filings and plenty of other information is out there for everyone to read. I highly suggest those who have a stake in the situation read as much as they can form as reliable sources as possible.
Ray
