Bankrupt US Airways this morning said it had reached agreements with lenders and lessors to continue operating nearly all of its mainline and US Airways Express fleets. Meanwhile, partner United Airlines, also bankrupt, said it is seeking competitive bids for a portion of its regional feeder services.
US Airways said it negotiated new financing terms for all but 36 aircraft, though interim agreements cover most of those. However, unless it can negotiate additional deals, 10 aircraft leases may be rejected. "Our intent is to focus on those few aircraft that, for a variety of reasons, may no longer be economical to fly, and if there is a downsizing of the fleet, that it be minimal, and that it be transparent to our customers," said president and CEO Bruce Lakefield. "We need to carefully analyze and negotiate with our aircraft financers to reduce our costs and make the company as efficient as possible."
The carrier reiterated its plan to add 230 daily flights to the February 2005 schedule but did not say which routes would be impacted by the potential 10-plane fleet reduction. The carrier's mainline fleet currently stands at 282 jets while its wholly owned United Express operation includes 67 regional jets and 64 turboprops.
US Airways had until today to resolve aircraft financing, a deadline set 60 days out from its bankruptcy filing on Sept. 12
(BTN, Sept. 20).
Some do not expect US Airways to survive long enough to implement its February schedule. "I think US Airways will be forced to liquidate after the holidays," said Helane Becker, analyst with The Benchmark Co., during an Association of Corporate Travel Executives meeting this week in New York. "The Air Transportation Stabilization Board is getting impatient and US Airways is burning through too much cash."
Becker said such a development would be "sad, but not bad," because customers would be served by other carriers filling the void. Eclipse Advisors COO Michael Boult, also speaking at the ACTE meeting, warned that "it takes time to optimize the market" in the wake of an airline failure. "If US Airways goes out, other carriers would come in and add flights," he said, "but it would be incremental."
Meanwhile, United yesterday said it sent requests for proposals to 10 regional airline companies to operate as many as 70 regional jets within the United Express network. The winning bidder would assume operations now handled by United Express partner Air Wisconsin but at lower cost to United.
Air Wisconsin's United Express feeder service comprises 500 daily flights to 72 cities, with sizable operations at United's Chicago O'Hare and Washington Dulles hubs.
"By requesting competitive bids from a number of regional airlines, we are confident we will secure proper market rates for our United Express contracts," said Sean Donohue, vice president of United Express and Ted, United's low-fare subsidiary.
United said the RFP also would allow it to adjust the mix of smaller and larger regional jets operating within its system. It was sent to several United competitors and existing United Express affiliates, including Air Wisconsin, Chautauqua, Express Jet, Horizon, Independence Air, Mesa, Mesaba, Pinnacle, SkyWest and Trans States. Bids are due Dec. 10.