September 8, 2004
Bankruptcy Firm Hired by Airline
With its labor negotiations faltering, US Airways Group Inc. has
begun consultations with bankruptcy advisers in anticipation of a
filing, a source familiar with the talks said yesterday, the
Washington Post reported. The Arlington, Va.–based
carrier has retained Seabury Group, the restructuring and aviation
consulting firm it used during its first bankruptcy two years ago. It
also has entered talks with the law firm Arnold & Porter LLP, which
will represent the airline in the event of a chapter 11 filing. US
Airways spokesman David Castelveter declined to comment on the
discussions but said it would be “prudent” for the carrier
to talk with advisers because bankruptcy remains an option if the
airline is unable to secure cost cuts from its workers, the newspaper
reported.
Delta to Cut Thousands to Avert Bankruptcy
Delta Air Lines, in an attempt to avoid filing for bankruptcy, said
today it aims to cuts annual costs by $5 billion by 2006 by
restructuring 51 percent of its network, slashing 6,000 to 7,000 jobs,
and closing its Dallas/Ft.Worth hub, CBS MarketWatch
reported. Delta also plans to grow Song, its low-cost carrier, by adding
12 planes to its network. Overall, the plan calls for restructuring 51
percent of the company’s network. Delta CEO Gerald Grinstein
further warned “bankruptcy is a real option” unless its
early pilot retirement issue is not resolved by end of month, the
newswire reported.
United Airlines
Flight Attendants Seek Trustee to Oversee UAL Bankruptcy
The labor group that represents United Airlines’ flight
attendants joined another union on Tuesday in asking a judge to appoint
a trustee to oversee the airline’s bankruptcy restructuring, the
union said, the Associated Press reported. The Association of Flight
Attendants (AFA) filed a motion in bankruptcy court Tuesday to join the
International Association of Machinists and Aerospace Workers’
request that United CEO Glenn Tilton be replaced by a court-appointed
trustee, union head Greg Davidowitch said in a letter posted Tuesday
evening on the AFA’s web site, the newswire reported.
United Airlines Seeks Rejection of Dynegy Power Contract
In its continued push to cut costs during its bankruptcy proceedings,
United Airlines has asked the judge overseeing its case for permission
to end a long-term electricity supplier contract with Dynegy Inc., the
online Wall Street Journal reported. United, a unit of UAL
Corp., has determined that due to a significant drop in wholesale
electricity prices since it signed the deal with Dynegy, the airline
would be better off getting its power from a unit of Constellation
Energy Group Inc., according to court documents made available
Tuesday.
US Senate Candidate Calls for Bankruptcy Reform
U.S. Senate candidate Barack Obama is calling for bankruptcy reform.
Obama’s campaign organized a press conference on Friday afternoon
in Carbondale , Ill., to call on Congress to reform bankruptcy laws in
order to protect workers when a company reorganizes. Read the article at
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Air Canada, Westjet Traffic Rise in August
Traffic rebounded at Canada’s top two airlines in August, but
while Air Canada filled a greater percentage of seats than a year
earlier, the load factor at rival WestJet Airlines Ltd. declined, the
companies said on Tuesday, Reuters reported. Air Canada, which plans to
emerge from bankruptcy protection at the end of the month, said it flew
9.8 percent more revenue passenger miles in August than a year earlier.
Capacity rose 6.5 percent, resulting in a record load factor—a
closely watched indicator that measures the percentage of seats filled
on planes—of 83.2 percent. At Calgary’s fast-expanding
WestJet, revenue passenger miles rose 21.8 percent in August, while
capacity increased 26.6 percent, the newswire reported.
Older Workers Worry About Pension Security
Older workers and retirees who have worked for their companies for
decades have long viewed their pensions as money in the bank, even years
before the checks arrived, the Associated Press reported. Now some are
beginning to wonder just how secure they really are. United
Airlines’ threat to terminate its four employee pension funds in
bankruptcy has reverberated through the airline industry and beyond.
Other companies are closely watching what would be the largest corporate
pension default in U.S. history, some likely pondering cutting their
own funds. And with 81 percent of corporate benefit plans underfunded,
according to Wilshire Associates Inc., workers are increasingly uneasy,
the newswire reported.
The Discreet Charm of the Very Bourgeois Toy Store?
F.A.O. Schwarz may be shuttered and dark, but its catalog is
somersaulting back in the direction of well-heeled children and the
adults who indulge them, the New York Times reported.
Revamped to appeal to its most affluent customers, the glossy new
catalog will arrive at a million households this week. Read the article
at www.nytimes.com.