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US Airways Looking to Sell Assets-Sources
By Kathy Fieweger and Tom Johnson
CHICAGO/NEW YORK Jan 8 (Reuters) - US Airways (Nasdaq:UAIR - news), the No. 7 U.S. airline, is looking to sell a variety of assets to scale back costs, several airline and banking sources said on Thursday. The assets include the airline's shuttle service between Boston, Washington and New York, its US Airways Express regional jet service and possibly one of its three hubs, according to sources. The hubs are in Pittsburgh, Philadelphia and Charlotte, North Carolina.
Also on the block, according to sources, are various gates -- for example at New York's LaGuardia airport -- and routes. No aircraft or transfer of employees is contemplated at this point, they said, speaking on condition of anonymity.
Shares of US Air were off 5.5 percent on the Nasdaq. The company has been out of Chapter 11 bankruptcy protection for less than a year but has not been faring well.
Sources said the decision to sell assets was prompted mostly by the company's failure to win union support for a revised business plan proposed by management.
The airline believes the new plan is necessary to help it compete against new low-cost services being offered by competitors.
Southwest Airlines (NYSE:LUV - news), a formidable foe for any airline, recently said it would begin service to Philadelphia.
US Airways wants any potential interests submitted by the middle of the month, according to one source, with the US Air board set to meet in February to decide what to sell.
One top U.S. airline executive, aware of the US Airways plans, said on the condition of anonymity that what is not clear that any of the assets on the block are particularly valuable at this point.
Also complicating matters, sources noted, is US Airways' loan guarantee from the federal government, which would have to approve any transfer. US Airways obtained loan backing from the Air Transportation Stabilization Board to get out of bankruptcy in March.
US Airways on Monday said it would lease only 10 gates at Pittsburgh International Airport on a long-term basis, down from an earlier 50 gates. The airline currently dominates activity at Pittsburgh's main airport, handling about 80 percent of its flights.
US Airways has hired Morgan Stanley to advise it during the sale process, the source said.
US Airways had no comment on the issue. Morgan Stanley declined to comment.
(Additional reporting by Julie MacIntosh in New York)
By Kathy Fieweger and Tom Johnson
CHICAGO/NEW YORK Jan 8 (Reuters) - US Airways (Nasdaq:UAIR - news), the No. 7 U.S. airline, is looking to sell a variety of assets to scale back costs, several airline and banking sources said on Thursday. The assets include the airline's shuttle service between Boston, Washington and New York, its US Airways Express regional jet service and possibly one of its three hubs, according to sources. The hubs are in Pittsburgh, Philadelphia and Charlotte, North Carolina.
Also on the block, according to sources, are various gates -- for example at New York's LaGuardia airport -- and routes. No aircraft or transfer of employees is contemplated at this point, they said, speaking on condition of anonymity.
Shares of US Air were off 5.5 percent on the Nasdaq. The company has been out of Chapter 11 bankruptcy protection for less than a year but has not been faring well.
Sources said the decision to sell assets was prompted mostly by the company's failure to win union support for a revised business plan proposed by management.
The airline believes the new plan is necessary to help it compete against new low-cost services being offered by competitors.
Southwest Airlines (NYSE:LUV - news), a formidable foe for any airline, recently said it would begin service to Philadelphia.
US Airways wants any potential interests submitted by the middle of the month, according to one source, with the US Air board set to meet in February to decide what to sell.
One top U.S. airline executive, aware of the US Airways plans, said on the condition of anonymity that what is not clear that any of the assets on the block are particularly valuable at this point.
Also complicating matters, sources noted, is US Airways' loan guarantee from the federal government, which would have to approve any transfer. US Airways obtained loan backing from the Air Transportation Stabilization Board to get out of bankruptcy in March.
US Airways on Monday said it would lease only 10 gates at Pittsburgh International Airport on a long-term basis, down from an earlier 50 gates. The airline currently dominates activity at Pittsburgh's main airport, handling about 80 percent of its flights.
US Airways has hired Morgan Stanley to advise it during the sale process, the source said.
US Airways had no comment on the issue. Morgan Stanley declined to comment.
(Additional reporting by Julie MacIntosh in New York)
