Greater reliance on regional jets and deeper cost cuts form the basis of US Airways' plan to emerge from Chapter 11 bankruptcy protection early in 2003.
The carrier, which filed for Chapter 11 in August, submitted its reorganisation plan to a Virginia court on 20 December, saying it intends to emerge from bankruptcy as early as March 2003. Its plan - subject to court approval - hinges on annual cost cuts of $1.8 billion, more than previously committed, and finding a way to address a $3.1 pension fund billion shortfall within seven years.
US Airways says it will address those issues so it can gain final approval for a $1 billion US federal loan guarantee - another critical element of the plan. The US government will get a 10% stake in US Airways in return for the loan guarantee. Other stakeholders in the reorganised carrier will include Alabama state pension fund RSA, which will be the lead investor with a 36.6% stake, labour groups, unsecured creditors, management and General Electric. Although the airline gives no details of its post-bankruptcy operational structure, it says it will maintain its fleet of mainline aircraft, but also increase revenues through greater use of regional jets.
A court hearing to approve the plan will be held in mid-January.
Source: Flight International
