ATSB Approves Proposed AWA/US Airways Merger
PHOENIX, July 22, 2005 /PRNewswire-FirstCall via COMTEX/ — America West Holdings Corporation (NYSE: AWA) and US Airways Group, Inc. (OTC Bulletin Board: UAIRQ) today announced that they have received approval for their planned merger from the Air Transportation Stabilization Board (ATSB). Both America West Airlines and US Airways hold loans backed by a federal guarantee from the ATSB. The carriers have been in negotiations on the treatment of those loans under their proposed merger. Pending final bankruptcy court and US Airways board approval and upon close of the merger, the two airlines’ outstanding ATSB loan guarantees will be consolidated with payments beginning September 2005 through September 2010. Final terms are still being negotiated.
America West Chairman and CEO Doug Parker stated, “We are grateful for the Board’s unanimous endorsement of our proposed merger with US Airways. Today’s announcement continues the positive momentum for our planned merger and brings us one step closer to building a stable future for our airlines.”
“We appreciate the ATSB working closely with us to further our efforts to restructure US Airways and preserve jobs while protecting the federal government’s interests. Their action today will enable the new US Airways to become a stronger and more viable airline,” said US Airways President and Chief Executive Officer Bruce R. Lakefield.
In January 2002, America West Airlines, Inc. closed a $429 million loan backed by a $380 million federal loan guarantee provided by the ATSB. The current outstanding balance on this loan is $300 million. US Airways, Inc. received a $900 million loan guarantee under the Air Transportation Safety and System Stabilization Act from the ATSB in connection with a $1 billion term loan financing that was funded on March 31, 2003. The current outstanding balance of that airline’s loan is $708 million.
America West Holdings Corporation is an aviation and travel services company. Wholly owned subsidiary America West Airlines is the nation’s second largest low-fare carrier with 14,000 employees serving approximately 60,000 customers a day in more than 90 destinations in the U.S., Canada, Mexico and Costa Rica.
US Airways is the nation’s seventh-largest airline, serving 181 communities in the U.S., Canada, Europe, the Caribbean and Latin America. US Airways, US Airways Shuttle and the US Airways Express partner carriers operate approximately 3,400 flights per day. (AWAG)