US Airways (Default; Currently in Chapter 11 Bankruptcy):
Despite the negative impact of the war, US Airways remains on track to emerge from Chapter 11 bankruptcy as early as next week. After reaching an agreement with its pilots over the termination of that group''s defined benefit pension plan and the establishment of a new defined contribution program, the last significant obstacle to Chapter 11 reorganization has been removed. Final court approval will pave the way for the airline to emerge with significantly lower unit operating costs, a smaller fleet and a commitment to quickly introduce regional jets as part of its new competitive strategy. Although the carrier continues to rack up losses as a result of the weak revenue environment and fuel price spikes, Chapter 11 has provided the airline with a competitive cost structure that can support a return to profitability if industry unit revenue recovers in 2004.
The estimated incremental cash impact of the war on US Airways in April is in the range of $35 million to $50 million. The revenue impact will be moderated as a result of the rather limited scope of US Airways'' international network. About 90% of system capacity is concentrated in domestic and Caribbean markets. On March 27 the airline announced that it would reduce April capacity by an additional 5%, primarily through cuts in trans-Atlantic service.
Despite the negative impact of the war, US Airways remains on track to emerge from Chapter 11 bankruptcy as early as next week. After reaching an agreement with its pilots over the termination of that group''s defined benefit pension plan and the establishment of a new defined contribution program, the last significant obstacle to Chapter 11 reorganization has been removed. Final court approval will pave the way for the airline to emerge with significantly lower unit operating costs, a smaller fleet and a commitment to quickly introduce regional jets as part of its new competitive strategy. Although the carrier continues to rack up losses as a result of the weak revenue environment and fuel price spikes, Chapter 11 has provided the airline with a competitive cost structure that can support a return to profitability if industry unit revenue recovers in 2004.
The estimated incremental cash impact of the war on US Airways in April is in the range of $35 million to $50 million. The revenue impact will be moderated as a result of the rather limited scope of US Airways'' international network. About 90% of system capacity is concentrated in domestic and Caribbean markets. On March 27 the airline announced that it would reduce April capacity by an additional 5%, primarily through cuts in trans-Atlantic service.
