Airline will sell planes, lease them back as it moves toward merger
TONY MECIA
Staff Writer
US Airways said Friday it plans to sell and lease back 19 planes, a move that would generate $120 million and give the airline an extra financial cushion as it seeks to merge with America West Airlines.
In addition, the airline said it received court approval to sell and lease back 28 regional jets and takeoff and landing slots in Washington and New York, a previously announced deal that would raise another $100 million.
Ron Stanley, the airline's chief financial officer, said the deals are necessary to help weather fuel costs, which surged again this week because of Hurricane Katrina. The airline will now "emerge from Chapter 11 with an even larger cash cushion than originally anticipated," he said.
US Airways said it expects to have $2.5 billion in cash after it merges with Arizona-based America West -- a deal expected to close in about a month. The airline's largest hub will be in Charlotte.
US Airways creditors, America West shareholders and a bankruptcy judge still must agree to the deal.
Jet-fuel prices have risen about 20 percent this week, after some Gulf Coast refineries reported hurricane damage. Airlines have said they have trouble passing rising fuel costs along to passengers because of fierce competition.
TONY MECIA
Staff Writer
US Airways said Friday it plans to sell and lease back 19 planes, a move that would generate $120 million and give the airline an extra financial cushion as it seeks to merge with America West Airlines.
In addition, the airline said it received court approval to sell and lease back 28 regional jets and takeoff and landing slots in Washington and New York, a previously announced deal that would raise another $100 million.
Ron Stanley, the airline's chief financial officer, said the deals are necessary to help weather fuel costs, which surged again this week because of Hurricane Katrina. The airline will now "emerge from Chapter 11 with an even larger cash cushion than originally anticipated," he said.
US Airways said it expects to have $2.5 billion in cash after it merges with Arizona-based America West -- a deal expected to close in about a month. The airline's largest hub will be in Charlotte.
US Airways creditors, America West shareholders and a bankruptcy judge still must agree to the deal.
Jet-fuel prices have risen about 20 percent this week, after some Gulf Coast refineries reported hurricane damage. Airlines have said they have trouble passing rising fuel costs along to passengers because of fierce competition.
