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Feds Approve US Airways Loan Guarantee Feb 12, 2003 (AP Online via COMTEX) -- The Air Transportation Stabilization Board on Tuesday agreed unanimously to guarantee 90 percent of a $1 billion loan US Airways Inc. has said it needs to continue operating. The $900 million federal guarantee is a key part of the company`s Chapter 11 reorganization plan that was accepted by a federal bankruptcy court judge last month. US Airways, the nation`s seventh-largest airline, sought the loan guarantee last summer. The board said US Airways` "management has pursued a disciplined approach to executing its restructuring plan and reacting to changing economic conditions in the airline industry." Approval is subject to final bankruptcy court confirmation of US Airways` reorganization plan and regulatory approval of the company`s plan to replace its pension plan with a defined-contribution plan. The airline plans to leave bankruptcy by March 31. The pension issue remains unresolved. A bankruptcy judge will hear arguments Feb. 20 on the airline`s plan to terminate its pension plan with the pilots to close a multi-billion-dollar funding gap. The pilots` union has already filed a grievance with the National Labor Relations Board, and said it is considering all options, including a strike, to keep its pension plan intact. "The company does not have carte blanche to execute a plan that harms so many pilots in such a substantive way," said Roy Freundlich, a spokesman for the US Airways unit of the Air Line Pilots Association. "A strike is always in the picture when you have a mounting conflict." Freundlich said the union believes a strike would be legal under federal law if the union`s contract with the airline is broken in court. US Airways said in April that it would seek federal loan guarantees under a $10 billion plan approved by Congress to shore up the transportation industry after the Sept. 11, 2001 terrorist attacks. The company formally applied for the loan last June and received conditional approval soon after. It filed for Chapter 11 bankruptcy protection in August. The company lost $2.1 billion in 2001, $852 million in the first three quarters of 2002 and has laid off about 30 percent of its work force of 46,000. U.S. Bankruptcy Judge Stephen Mitchell in Alexandria, Va., gave preliminary approval to the company`s reorganization plan last month. The Arlington, Va.-based airline has said it needs to cut costs by $1.6 billion to remain viable. The reorganization plan hinges on US Airways securing the loan guarantee as well as a $240 million investment from the Alabama state pension fund. The transportation board said Tuesday its approval also requires final approval of the Alabama investment. In return for the loan guarantee, the government will receive a 10 percent interest in the reorganized airline`s stock. The board said it considers that stake "sufficient participation in the applicant`s potential future gains." Not everyone considers the guarantee a wise investment by the government. Kenneth Button, a professor of public policy at George Mason University, said the need for a government guarantee indicates that private lenders may not believe US Airways represents a worthy financial risk. "There is a serious problem with the government getting involved in guaranteeing loans," he said. "Either the market would have done it anyway, or it shouldn`t happen." By MICHAEL BUETTNER Associated Press Writer Copyright 2003 Associated Press, All rights reserved -0- APO Priority=r APO Category=1310 SUBJECT CODE: 1310 |
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| aus der Diskussion: | $$$$US AIRWAYS gerettet????$$$$ |
| Autor (Datum des Eintrages): | remid (12.02.03 14:29:37) |
| Beitrag: | 62 von 110 (ID:8587126) |
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