The article below from NYTimes.com has been sent to you by psa188@xxxxxxxxx /--------- E-mail Sponsored by Fox Searchlight ------------\ GARDEN STATE: NOW PLAYING IN SELECT THEATERS GARDEN STATE stars Zach Braff, Natalie Portman, Peter Sarsgaard and Ian Holm. NEWSWEEK's David Ansen says "Writer-Director Zach Braff has a genuine filmmaker's eye and is loaded with talent." Watch the teaser trailer that has all of America buzzing and talk back with Zach Braff on the Garden State Blog at: http://www.foxsearchlight.com/gardenstate/index_nyt.html \----------------------------------------------------------/ Pilots' Study Warns US Air on Finances August 13, 2004 By MICHELINE MAYNARD US Airways will go out of business within months if it cannot significantly cut its costs and adopt a leaner operating structure, a financial report commissioned by its pilots union concluded yesterday. The analysis, which was done by Glanzer and Company, an investment banking firm, found that the airline would risk filing for a second Chapter 11 bankruptcy by mid-September, if it missed a series of crucial financial deadlines. The confidential report was drafted for the Air Line Pilots Association, which is in talks with US Airways on its share of $800 million cuts in wages and benefits that the airline is seeking from its unions, which gave the company two sets of concessions in bankruptcy. The 3,400-member pilots union refused to comment on the findings, which were distributed to its members. But a spokesman, Jack Stephan, said the pilots "do not disagree in principle with the conclusions reached by our investment banker." The airline, in a statement, also declined to discuss the specifics but said it was in "the best interests of the company and employees" to reach agreement quickly with its unions. In all, US Airways is racing to cut $1.5 billion from its operations, including the labor cuts, to avoid another bankruptcy filing. The airline, which emerged from bankruptcy in April 2003, is taking apart its hub-and-spoke operations to focus instead on direct flights from airports in Boston, New York, Philadelphia and Washington, and compete with low-fare airlines that have grabbed market share from those cities. But there has been resistance to US Airways' push for cutbacks among employees who are skeptical that the situation is really so dire, both within the pilots union and among other labor groups. The Glanzer report, while commissioned by the pilots union, appeared to bolster US Airways' case. Absent a new cost structure, the report said US Airways could cease to operate within 180 to 270 days - meaning sometime between March and June, regardless of whether it seeks bankruptcy protection. The report also said the likelihood of a filing by mid-September was high unless cuts are made. The report noted that US Airways is required to make cash contributions of $130 million to its employee pension plans on Sept. 15. Failing to make them could lead to liens or other penalties from the Internal Revenue Service, and cause lenders to seek repayment of their liabilities. That would create the equivalent of "a run on the bank," the report emphasized. "If anyone of them begins executing on these capital calls, they all will, and the airline will fail." At the end of September, US Airways also faces a series of covenants on its federal loan guarantee package, and it must satisfy lending requirements of aircraft companies including Bombardier, Embraer and General Electric. If it missed those covenants, the federal Air Transportation Stabilization Board would be able to call the remaining portion of its $900 million loan "immediately," the report said. "Unless the company is able to demonstrate that it has a viable business plan, the A.T.S.B. would have no reason to continue providing financing," the report stated, "and would be better served by having its loan repaid with the cash the company has today. At that point, the company would cease to operate." The loan board has shown a past willingness to negotiate, rather than take such drastic action. Earlier this year, the board and US Airways agreed on a series of revisions in the terms of the airline's seven-year loan package. US Airways made an early payment and pledged that it would substantially reduce its losses this year and post an operating profit next year. If the covenants had not been changed, US Airways would have been in default. http://www.nytimes.com/2004/08/13/business/13pilots.html?ex=1093406472&ei=1&en=ff46acb034f5e259 --------------------------------- Get Home Delivery of The New York Times Newspaper. 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