Tue, Aug 17, 2004
They say company will go out of business in months,
unless...
Warning, Will Robinson! Warning!
If US Airways doesn't do something fast, it will go the way of
the dinosaur -- and soon. That's the word in a financial report
commissioned by the ALPA.
But here's the odd
thing. Even though the airline's 3,400 pilots commissioned the
report by Glazner and Company, the text of the report seems to
bolster the airline's position in ongoing concession talks.
Ironically, the pilots' union and others have said they doubt the
situation is as bad as US Airways says it is. But unless the
company changes its cost structure, Glazner and Company thinks US
Airways will go belly-up in less than 270 days.
Even though it's not necessarily what they wanted to hear,
pilots' spokesman Jack Stephan said the ALPA doesn't "disagree in
principle with the conclusions reached by our investment
banker."
Topping the list of
upcoming expenses: US Airways is required to make a $130 million
payment to its employee pension plan. If that doesn't happen,
agreements reached during the company's bankruptcy could fall
through and its creditors could demand immediate payment. The IRS
could sanction US Airways, the Air Transportation Stabilization
Board could demand its $900 billion loan be paid off and the
company's aircraft lease holders could back out.
If that were to be the case, the report said it would result in
"a run on the bank. If anyone of them begins executing on these
capital calls, they all will, and the airline will fail."
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