US Airways has secured creditor and court approval to emerge from Chapter 11 bankruptcy by the end of March, when it will gain access to over $1.2 billion to carry through a restructuring plan that includes the purchase of up to 200 more regional jets.
The Virginia-headquartered carrier, which filed for bankruptcy protection in August 2002, was given smooth passage to emerge out of Chapter 11 at a court confirmation hearing on 18 March. Creditors voted to accept 81% of the carrier's reorganisation plan.
US Airways chief executive David Siegel emphasised his intention to complete all remaining tasks, including the quick resolution of a pilot pension plan liability issue, so the airline can complete its restructuring by 31 March.
At that point US Airways can access a $1 billion federal loan guarantee and $240 million equity investment from Retirement Systems of Alabama, which will become the carrier's lead investor with a 36.6% stake.
US Airways is expected to make a quick decision between Bombardier and Embraer 70-seat regional jets. It is looking to buy around 100 aircraft with options possible on another 100.
United Airlines' charted course through Chapter 11, meanwhile, is anything but smooth sailing. United, which filed for bankruptcy in December and whose restructuring is likely to be a much longer and more complex process, admitted last week that a company shutdown was possible. "Liquidation is a distinct possibility if United does not receive its proposed labour cost reduction," says the Chicago-based carrier in a court document filed last week seeking permission to scrap current contracts with its main union groups. The unions say United's liquidation warning is groundless.
United, which is losing money on most of its routes, expects to post an operating loss of $877 million for the 2003 first quarter.
Source: Flight International
