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Newspaper says No. 7 airline likely to make its second filing for protection in just over two years.
September 10, 2004: 7:18 AM EDT
NEW YORK (CNN/Money) - US Airways Group is likely to file for bankruptcy court protection as soon as Sunday, according to a published report.
The New York Times reported the imminent filing Friday, quoting people briefed on the situation. It would be the second trip into bankruptcy for the nation's No. 7 airline in just over two years, but this time it could find difficulty emerging from bankruptcy court protections.
Both the Times and the Wall Street Journal reported Friday that the company has no collateral with which to arrange interim financing in the event of a bankruptcy filing, forcing it to get by on unrestricted cash on hand and complicating any effort to reorganize.
if(cnnEnableCL){if(location.hostname.indexOf('.cnn.com')==-1){cnnAddCSI('contextualLinks','http://brun8tmp.turner.com/ctxtlink/jsp/money-story.jsp','origin=money&site=cnn_monnews_dyn_ctxt&category=moneynews&url=http://robots.cnnfn.com/2004/09/10/news/fortune500/usair_bankruptcy/index.htm');}else{cnnAddCSI('contextualLinks','http://cl.cnn.com/ctxtlink/jsp/money-story.jsp','origin=money&site=cnn_monnews_dyn_ctxt&category=moneynews&url=http://robots.cnnfn.com/2004/09/10/news/fortune500/usair_bankruptcy/index.htm');}}Normally companies that file under Chapter 11 of bankruptcy code, which allows for continued operations, announce a financing package that allows them to fund operations while operating under bankruptcy protection. Without such financing, there is a risk the company could be forced into Chapter 7 bankruptcy, which would bring on liquidation.
The Times quotes airline spokesman Christopher Chiames as saying a final decision on filing has not yet been made, but adding, "All along in this process, we've acknowledged that a bankruptcy filing might be necessary."
Pilots at US Air will hold an emergency meeting Friday, but it was unclear if they would resurrect concessions that management insists its needs.
The special meeting of the executive committee of the Air Line Pilots Association at the airline will be held at a hotel at the Pittsburgh airport just days after the committee rejected a proposal for nearly $300 million in annual labor concessions.
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The company says it must have $800 million in concessions finalized from all its unions this month to help avoid filing for bankruptcy. The company faces a deadline next week for a $110 million pension payment.
Bill Pollock, chairman of the union's executive committee, told pilots Wednesday the proposed concession deal, while painful, would be better than what might be forced on workers during bankruptcy.
Pollock also said minor changes to the latest proposal might satisfy the 12-member executive committee, which is sharply divided over the composition of givebacks that include hefty pay cuts, a reduction in pension benefits, and work rule and productivity changes.
September 10, 2004: 7:18 AM EDT
NEW YORK (CNN/Money) - US Airways Group is likely to file for bankruptcy court protection as soon as Sunday, according to a published report.
The New York Times reported the imminent filing Friday, quoting people briefed on the situation. It would be the second trip into bankruptcy for the nation's No. 7 airline in just over two years, but this time it could find difficulty emerging from bankruptcy court protections.
Both the Times and the Wall Street Journal reported Friday that the company has no collateral with which to arrange interim financing in the event of a bankruptcy filing, forcing it to get by on unrestricted cash on hand and complicating any effort to reorganize.
if(cnnEnableCL){if(location.hostname.indexOf('.cnn.com')==-1){cnnAddCSI('contextualLinks','http://brun8tmp.turner.com/ctxtlink/jsp/money-story.jsp','origin=money&site=cnn_monnews_dyn_ctxt&category=moneynews&url=http://robots.cnnfn.com/2004/09/10/news/fortune500/usair_bankruptcy/index.htm');}else{cnnAddCSI('contextualLinks','http://cl.cnn.com/ctxtlink/jsp/money-story.jsp','origin=money&site=cnn_monnews_dyn_ctxt&category=moneynews&url=http://robots.cnnfn.com/2004/09/10/news/fortune500/usair_bankruptcy/index.htm');}}Normally companies that file under Chapter 11 of bankruptcy code, which allows for continued operations, announce a financing package that allows them to fund operations while operating under bankruptcy protection. Without such financing, there is a risk the company could be forced into Chapter 7 bankruptcy, which would bring on liquidation.
The Times quotes airline spokesman Christopher Chiames as saying a final decision on filing has not yet been made, but adding, "All along in this process, we've acknowledged that a bankruptcy filing might be necessary."
Pilots at US Air will hold an emergency meeting Friday, but it was unclear if they would resurrect concessions that management insists its needs.
The special meeting of the executive committee of the Air Line Pilots Association at the airline will be held at a hotel at the Pittsburgh airport just days after the committee rejected a proposal for nearly $300 million in annual labor concessions.
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.
Or, visit Popular Alerts for suggestions.
The company says it must have $800 million in concessions finalized from all its unions this month to help avoid filing for bankruptcy. The company faces a deadline next week for a $110 million pension payment.
Bill Pollock, chairman of the union's executive committee, told pilots Wednesday the proposed concession deal, while painful, would be better than what might be forced on workers during bankruptcy.
Pollock also said minor changes to the latest proposal might satisfy the 12-member executive committee, which is sharply divided over the composition of givebacks that include hefty pay cuts, a reduction in pension benefits, and work rule and productivity changes.
