Nov. 24 (Bloomberg) -- US Airways Group Inc., the smallest of the U.S. full-fare carriers, delayed deliveries of 54 Airbus SAS planes by as much as three years and obtained $275 million in financing for jets next year.
The actions, along with the deferral of $200 million in debt, will improve liquidity by $150 million at year-end and by $450 million at the close of 2010, the Tempe, Arizona-based airline said today in a statement.
US Airways will be able to delay $2.5 billion in capital spending for aircraft during the next three years to shore up its balance sheet after losses in seven of the past eight quarters. The carrier filed for bankruptcy in September 2004 for the second time in two years before merging with America West Holdings Corp. in September 2005 after exiting court protection.
“The steps announced today are very positive and, along with earlier liquidity-raising measures, move US Airways further away from the abyss of a third bankruptcy filing,” said Douglas Runte, managing director of Piper Jaffray & Co. in New York. “The company’s long-term competitive position remains very challenging and is aggravated by the difficult industry revenue environment.”
A 17-month slump in passenger traffic led to about $3 billion in losses through September among the nine biggest U.S. carriers. Airlines have slashed fares during that period to encourage travel.
US Airways’ deferrals already have been included in Airbus’s 2010 production plans, said Justin Dubon, a spokesman for the planemaker. Airbus will announce in January the number of planes it plans to produce in 2010.
Cutting Jobs
The airline said last month it would cut 1,000 jobs as it shuts crew bases in Boston, New York and Las Vegas in order to focus on its hubs in Philadelphia, Phoenix and Charlotte, North Carolina, and its base at Washington’s Reagan National Airport.
US Airways rose 7 cents to $3.17 at 10:05 a.m. in New York Stock Exchange composite trading. The shares have fallen 59 percent this year.
The carrier today said it arranged loans of $95 million and $180 million to finance planes being delivered next year, and deferred by 14 months the repayment of $200 million to Barclays Plc, US Airways’ affinity credit card partner.
Barclays also agreed to reduce by an unspecified amount the unrestricted cash US Airways must maintain under an earlier accord to buy frequent-flier miles. The requirement previously was $1.5 billion.
“We cannot continue to lose money indefinitely and fund our losses through financing and partner support,” Chief Executive Officer Doug Parker said in a message to employees.
US Airways will delay deliveries of A320, A330 and A350 aircraft, while accepting 28 new planes from 2010 through 2012. The airlines’ fleet has an average age of 12 years.
By Mary Schlangenstein
The actions, along with the deferral of $200 million in debt, will improve liquidity by $150 million at year-end and by $450 million at the close of 2010, the Tempe, Arizona-based airline said today in a statement.
US Airways will be able to delay $2.5 billion in capital spending for aircraft during the next three years to shore up its balance sheet after losses in seven of the past eight quarters. The carrier filed for bankruptcy in September 2004 for the second time in two years before merging with America West Holdings Corp. in September 2005 after exiting court protection.
“The steps announced today are very positive and, along with earlier liquidity-raising measures, move US Airways further away from the abyss of a third bankruptcy filing,” said Douglas Runte, managing director of Piper Jaffray & Co. in New York. “The company’s long-term competitive position remains very challenging and is aggravated by the difficult industry revenue environment.”
A 17-month slump in passenger traffic led to about $3 billion in losses through September among the nine biggest U.S. carriers. Airlines have slashed fares during that period to encourage travel.
US Airways’ deferrals already have been included in Airbus’s 2010 production plans, said Justin Dubon, a spokesman for the planemaker. Airbus will announce in January the number of planes it plans to produce in 2010.
Cutting Jobs
The airline said last month it would cut 1,000 jobs as it shuts crew bases in Boston, New York and Las Vegas in order to focus on its hubs in Philadelphia, Phoenix and Charlotte, North Carolina, and its base at Washington’s Reagan National Airport.
US Airways rose 7 cents to $3.17 at 10:05 a.m. in New York Stock Exchange composite trading. The shares have fallen 59 percent this year.
The carrier today said it arranged loans of $95 million and $180 million to finance planes being delivered next year, and deferred by 14 months the repayment of $200 million to Barclays Plc, US Airways’ affinity credit card partner.
Barclays also agreed to reduce by an unspecified amount the unrestricted cash US Airways must maintain under an earlier accord to buy frequent-flier miles. The requirement previously was $1.5 billion.
“We cannot continue to lose money indefinitely and fund our losses through financing and partner support,” Chief Executive Officer Doug Parker said in a message to employees.
US Airways will delay deliveries of A320, A330 and A350 aircraft, while accepting 28 new planes from 2010 through 2012. The airlines’ fleet has an average age of 12 years.
By Mary Schlangenstein
