US Airways Files for Bankruptcy Protection; 2nd Time in 2 Years

[Snellius]

US Airways filed for Chapter 11 protection this afternoon, its second round in bankruptcy in two years, after workers refused the airline's push for $800 million in wage and benefit cuts so that it could lower its costs.

The airline, based in Arlington, Va., made its bankruptcy filing at United States Bankruptcy Court in nearby Alexandria, the same place it sought court protection in 2002. It said there would be no disruption in its service and that it planned to present a reorganization plan to the court by the end of the year.

http://www.nytimes.com/2004/09/12/business/12CND-USAIR.html?hp

[Placebo]

1. grr, I hate to see airlines in trouble

[ret5hd]

2. from what i have read, this pretty much spells the end of US Airways...

and is going to end in liquidation. Hope i am wrong for the workers sake.

[SoCalDem]

3. Businesses and rich people do this all the time, and yet

when ordinary people have to file, they are portrayed as deadbeats and losers..

My husband worked for a guy a once who filed every 7 years..like clockwork.. he had a 500K house in Palm Springs, another in Anaheim Hills, a couple of brand new cars..Caddy and a bmw..

The assets were in his kids' names, and his credit was shot, so when the business needed stuff, he would use OUR credit cards.. I was a nervous wreck, and always afraid that one day he would say see ya to my husband, and we would get stuck for it.. there were times when there was over 20K charged in our name...

Luckily he did pay it off, and my husband quit...


Bankruptcy and the use of other people's crecit is how lots of "businessmen" do things.,.:(

[jbutsz]

4. I know how you feel on that one...

My own brother ripped me off of about $75K in vehicles, credit cards, charge accounts, and hot checks in a "business" deal (construction)... It was the worst nightmare of my life, one I barely made it through..

Glad you and yours got out intact!

[Gin]

6. 2 times in one year? did they stop the first one?

I guess their retirements will be gone if it is really sold off.......it will be important to see what the ceo gets in the way of compensation.

[DemoTex]

7. See 5

.

[DemoTex]

5. As a US Airways captain, I am upset but not surprised.

Dave Siegel, the president and COO until earlier this year made over $10-million in 2003. He was high on a Washington Post list of "50 of the Washington Areas Top Paid Executives" in a fairly recent issue. Two or three other US Airways executives were also on that list. That ain't right, folks.

Of course, right before the 2002 bankruptcy, Steven Wolf, Rakesh Gangwal, and Larry Nagin departed US Airways with $35-million (total) in retirement. Seven months later Siegel & Co. terminated the pilots pension plan (but none of the other employee groups).

The NY Times article isn't entirely accurate about the events of this weekend. The company presented the pilots with a counter-proposal on Friday and, according to ALPA, we were in the process of scheduling negotiations to resume.

[Gin]

8. that should be illegal.......god how can they get away with that?

doesn't bankruptcy court watch these things?

[Catt03]

9. How can that be allowed?

How can a CEO make that much money when a company is in trouble?

Don't you all vote through the union or something about the compensation for the CEO?

Boy :evilfrown:

[napi21]

15. DemoTex, how'd they get away with terminating your pension plan?

Aren't you still part of the Pilots Union? If so, wasn't the pension plan part of your contract?

The reason I'm asking, is because my son works for Delta. He's not a pilot though, he works as a mechanic. Even though Delta is a non-union airline, their pilots belong to a union, and as far as I know, they are protected from that kind of corp sneak by their contract.

[Chico Man]

17. Remonds me of something I've heard from some Eastern Airlines pilots

This may be of interest

http://www.palmbeachpost.com/opinion/content/opinion/epaper/2004/08/16/a14a_blackburn_0816.html

"When a company offers employees a defined-benefit pension —- so many dollars a month during retirement, for life — it insures the program with the federal Pension Benefit Guarantee Corp. If the company goes out of business or, increasingly, undergoes a reorganization under bankruptcy laws, the PBGC pays the retirees a portion of what they were due. It's usually around 80 percent or less now. As Eastern Airlines employees found years ago, an insured pension from a defunct company isn't the same as the real thing.

The PBGC is seriously sick itself. It's technically broke. Three steel companies — Bethlehem, LTV and National, with a total of 213,000 retirees and eligible employees — turned their obligations over to the PBGC in 2002. The US Airways pilots' plan went in last year, and cash-strapped United Airlines just skipped a $72 million quarterly contribution to its pension plan. That caused Bradley Belt, the pension insurance plan director, to tell the airline it had better not bail out. But since you probably never heard of Mr. Belt, you can guess how much clout he has."

[DemoTex]

19. PBGC on the last day of Clinton's presidency: +$7 billion (PLUS!)

After 3.5 years of the vapid one, Bu$h, the PBGC is at least $5 billion in the red. US Airways will terminate more pensions in Chapter 11, so will United and Delta (soon to join the fray). Then the PGBC will be bankrupt, and if Bu$h is re-elected, he will dissolve it as a burdensome public debt. By that time, if Bu$h is re-elected, social-security will have been privatized. That will be good for investors, the rich, and those on the outside margins of the baby-boomer bell-curve. The rest of us, in the -75%/+75% of the bell-curve will be starving and will welcome the new program, a BFEE "original"; cost-plus, painless euthanasia. Auto-deduct from the sales tax on the coffin.

[DemoTex]

20. PBGC garantee is < 30% of earned retirement. That is now!

PBGC, under Bu$h, is basically insolvent. Bu$h should be in porno films. Never has one vapid little man - dickless- fucked so many people, in their ass without the aid of KY - while beating them with his cane and whip. Never, ever. Not in the history of the USA.

Know what I mean, Vern?

[DemoTex]

18. The bankruptcy court judge (GOP) allowed it.

US airline labor will be totally busted in 5 years. It is another Bu$h goal. When the flag carriers go under (Delta, United, US Airways, and maybe American), Bu$h will allow the foreign carriers to fill the gap. It is called "cabotage," and it is the next step in extreme outsourcing. They will fly the international routes and some domestic connections, and the labor-busters like South West and Jet-Blue will dominate the short-haul US market.

Last year the medical industry lost 98,000 patients due to drug and surgical mistakes. That loss record would shut the airlines down. Period. Forever. We, the long time airlines, and my union ALPA with my help on the Central Air Safety Committee, made the US airlines the safest in the world. Never forget that.

Captain DemoTex

[NuttyFluffers]

10. *sigh* and yet freeptards hate gov't....

if they hate gov't so much then let us revoke bankrupcy protection and see how fast they change their minds... mindless cultists these RWers are, mindless cultists.

[airstrip1]

11. Airlines are the canary in the mine shaft

http://www.thestate.com/mld/thestate/business/9582693.htm

[JackDragna]

12. Air travel is simply too voliatile...

..and too important a thing to leave to private industry. The airlines should once again be privatized.

[SoCalDem]

13. You mean regulated??

Years ago, there were fewer people flying and MANY MANY more airlines. they all seemed to be doing fine until deregulation happened and they cannibalized each other.. Every gulp included more and more debt, and the payments always come due..

The smaller carriers were a great thing for the out-of-the way places too...

It's a damned shame that pan Am, TWA, Eastern, Braniff and so many others are gone..

Flying is horrible these days.. It's like being on a greyhound bus with wings..:(..

The glory days of flying were wonderful 60's & 70's.. Too bad so many of you young'uns missed it.. It was actually fun..:(

[DemoTex]

14. Update: Straight from the horse's mouth (USAir ALPA chairman today):

A short time ago US Airways voluntarily filed for reorganization under Chapter 11 of the Bankruptcy Code. In a press release issued today, US Airways President and CEO Bruce Lakefield said that the Company would continue to operate while completing its financial restructuring, also adding:

"We have devoted the last six months to building and implementing a Transformation Plan that leverages our strengths and allows us to compete successfully in a changing airline industry," said US Airways President and Chief Executive Officer Bruce R. Lakefield. "Since we still lack the new labor agreements that are needed for the Transformation Plan to succeed, we must preserve the Company's cash resources that are required to implement the Plan. We have made the difficult but necessary decision to complete this process with the help of the Court."

The Company filed its petitions on Sunday afternoon in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria. The Company's petitions listed assets of approximately $8.8 billion, including $2.5 billion of Goodwill, and liabilities of approximately $8.7 billion. The Court has scheduled a hearing on the Company's first day motions for 10:30 a.m. in Courtroom #1 at the Martin Bostetter, Jr. U.S. Courthouse. Information on the filing and related matters can be found at http://www.transformingusairways.com.

Your MEC and MEC officers are very disappointed that US Airways has again filed for reorganization under Chapter 11. This pilot group has already given more than 5 billion dollars worth of concessions to the Company to support previous restructuring efforts in the hope that US Airways would return to profitability.

After reviewing a proposal on Friday that the Company sent the Negotiating Committee for consideration, the MEC passed a motion redirecting resumed negotiations with the Company. Therefore, ALPA expects Transformation Plan negotiations with management to continue during the Company’s reorganization.

Further updates on the Company’s reorganization plans will be posted as they are announced. A US Airways Bankruptcy Fact Sheet and Q&A have been prepared and will be posted soon on the pilots only website.

Bold letter's by DemoTex. The US Airways pilots have given the largest concessions in the history of the airline industry. Period. Too bad we don't control the board by now. We would fire some $10-million per year prima-donna assholes and hire a real airline manager.

[The Velveteen Ocelot]

16. I hate to see this.

As an employee of another airline, I know what a tough business it is these days, and I feel especially bad for the US Airways employees. I heard the pilot layoffs went all the way back to 1987. Good luck to you and your colleagues, DemoTex.