lead zeppelin
16th Dec 2004, 21:07
Court approves US Airways short-term liquidity, debt agreements with GE
05:06 PM EST Dec 16
ALEXANDRIA, Va. (AP) - US Airways Group Inc. on Thursday won court approval to move ahead with an aircraft leasing and financing deal that will help the struggling airline lower costs and reduce debt.
The agreement with General Electric Co. provides the Arlington-based airline, now operating under bankruptcy protection, with $140 million US in short-term liquidity, and the deferral of aircraft debt and lease payments due over the next six months. It was expected to result in more than $80 million in annual cash savings and aircraft-ownership and engine-maintenance costs.
US Airways has previously stated that the deal, filed Nov. 26 in U.S. Bankruptcy Court in Alexandria, requires the company to complete a series of cost reductions and restructuring milestones by Jan. 14 and exit Chapter 11 by June 30.
As part of the agreement, General Electric's GE Capital Aviation Services will lease up to 31 new regional jets to US Airways over the next three years. During the same time period, US Airways will return 25 of its 281 mainline aircraft - including 10 Airbus 319s and 15 Boeing 737-300s.
GE's GE Engine Services has also agreed to new terms for the engine-maintenance services it provides to US Airways.
In exchange for GE's commitments, US Airways said it would issue a 15-year convertible note for between $125 million and $216 million - depending on future lease options chosen by US Airways - to GE's capital aviation unit when it emerges from bankruptcy.
US Airways filed for Chapter 11 bankruptcy protection in September for the second time in two years.
© The Canadian Press, 2004
05:06 PM EST Dec 16
ALEXANDRIA, Va. (AP) - US Airways Group Inc. on Thursday won court approval to move ahead with an aircraft leasing and financing deal that will help the struggling airline lower costs and reduce debt.
The agreement with General Electric Co. provides the Arlington-based airline, now operating under bankruptcy protection, with $140 million US in short-term liquidity, and the deferral of aircraft debt and lease payments due over the next six months. It was expected to result in more than $80 million in annual cash savings and aircraft-ownership and engine-maintenance costs.
US Airways has previously stated that the deal, filed Nov. 26 in U.S. Bankruptcy Court in Alexandria, requires the company to complete a series of cost reductions and restructuring milestones by Jan. 14 and exit Chapter 11 by June 30.
As part of the agreement, General Electric's GE Capital Aviation Services will lease up to 31 new regional jets to US Airways over the next three years. During the same time period, US Airways will return 25 of its 281 mainline aircraft - including 10 Airbus 319s and 15 Boeing 737-300s.
GE's GE Engine Services has also agreed to new terms for the engine-maintenance services it provides to US Airways.
In exchange for GE's commitments, US Airways said it would issue a 15-year convertible note for between $125 million and $216 million - depending on future lease options chosen by US Airways - to GE's capital aviation unit when it emerges from bankruptcy.
US Airways filed for Chapter 11 bankruptcy protection in September for the second time in two years.
© The Canadian Press, 2004