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AFA US Airways MEC E-Line
for January 16, 2003 This information is also available on our Web Site http://www.afausairways.org |
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US Airways to Seek Plan
OK at Key Court Hearing ALEXANDRIA, Va., Jan 16 (Reuters) - US Airways Group Inc. (UAWGQ) will ask a federal bankruptcy judge on Thursday to accept its reorganization plan, although pension problems and a new settlement with the airline's largest creditor could provide fodder for some debate. If the bankruptcy court rules that a disclosure statement covering US Airways' plans to rebuild its business is adequate, the plan will be passed out to the airline's creditors for a vote. Creditors' approval and a final confirmation from the bankruptcy court could clear the way for US Airways to emerge from Chapter 11 protection by March, its target date. The proposal would give the Retirement Systems of Alabama, its main investor, a 36.6 percent stake in the airline, while its employees would get a combined 38 percent stake. Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia will hear US Airways' arguments during a court session that could stretch into Friday. US Airways and General Electric Co.'s (GE) GE Capital Corp., the airline's largest creditor, will present a proposed settlement that would give US Airways an infusion of $120 million in emergency financing. The agreement, proposed in a late December court filing, would hand GE a stake of up to 5 percent in US Airways once it emerges from bankruptcy, along with 3.8 million shares of preferred stock. US Airways would get $360 million from GE Capital after it reorganizes and another $350 million of equity to draw up leases on regional jets. It would also be able to cancel leases on some GE aircraft and replace them with cheaper agreements. US Airways is likely to address in court its weighty pension problems, which have stood in the way as it works to win final approval for $900 million in crucial federal loan guarantees. Its pension plan is $3.1 billion below-target, and the pilots' plan has only half the assets it needs to repay its liabilities. Proposed Senate legislation would let US Airways spread out some of those payments over 30 years. But the carrier has been unable to get approval to restructure its repayment schedule, and it is running out of time to solve the problem. |
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US Airways Subsidiary Demands 600% Cost Increase in Health Care |
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| US Airways Presents Reorganization Plan Thu Jan 16, 4:55 PM ET US Airways' plan to emerge from Chapter 11 bankruptcy protection includes cutting costs by nearly $2 billion and renegotiating union contracts, WTAE's Sheldon Ingram reported Thursday. The nation's sixth-largest airline unveiled details of its reorganization plan before U.S. Bankruptcy Judge Stephen Mitchell in Alexandria, Va. The plan, detailing how US Airways will function as a financially healthy carrier, was presented in three-inch thick binders that contained several hundred pages. Among the major points: The airline says its future hinges on the ability to acquire several hundred regional jets to compete with other airlines, particularly in Pittsburgh. A co-share agreement with United Airlines is expected to add thousands of new passengers. The elimination of $1.9 billion in costs is planned by terminating lease agreements and slashing huge chunks of employee wages and benefits through concessions. Ingram reported that there are 37 objections from some of US Airways' creditors that must be addressed before the plan is formally accepted. A stumbling block to final approval is the elimination of the company's stock option plan, Ingram reported. Also, Ingram reported that US Airways stockholders would not be compensated for lost investments, but management would be compensated with stock. "We have made it clear from the beginning that it's unlikely that current shareholders would see any replacement stock," said US Airways spokesperson Christopher Chiames. "By law, shareholders can't be compensated until creditors have been compensated. "Management is compensated because we have not put in retention programs, which you would typically see in a bankruptcy case, to keep competent management. US Airways is seeking an extension to pay $3 billion into workers' pension funds over the next seven years. The federal Air Transportation Stabilization Board reportedly will not give US Airways a needed $900 million loan guaranty unless its reorganization plan resolves the pension issue. |
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| Spirit Airlines Flight Attendants Reach
Tentative Contract Agreement WASHINGTON, DC - Spirit Airlines flight attendants, represented by the Association of Flight Attendants, AFL-CIO, have reached a tentative contract agreement with the airline. "This past year and a half has been very difficult for those of us who work in the airline industry," said Tara Swiderski, AFA Spirit Master Executive Council President. "I'm glad that we could work with the company to reach an agreement through these trying circumstances and provide the flight attendants with the security and voice at work that a legally binding contract provides." The tentative agreement on a first contract was reached January 15, more than two years after the flight attendants elected AFA as their union. Details of the tentative agreement will not be disclosed until the Spirit Airlines flight attendants have a chance to learn about and vote on the proposed contract. A simple majority of Spirit flight attendants must vote "yes" in order for the contract to ratify. Spirit Airlines, a privately owned company, is headquartered in Miramar, Fla. and has bases in Detroit, Atlantic City, N.J. and Ft. Lauderdale, Fla. More than 50,000 flight attendants at 26 airlines -- including more than 600 flight attendants at Spirit -- join together to form AFA, the world's largest flight attendant union. For more information, visit AFA's website at www.afanet.org. |
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C. A. "Chuck" Cannaday
Association of Flight Attendants
Hotline & *E-Line* - US Airways