US Airways Needs New Recovery Plan
12/10/2004
Bloomberg News reports that US Airways Group Inc., the seventh-largest U.S. airline, can't attract backing of $250 million needed to avoid liquidation and emerge from bankruptcy under its current recovery plan, the former chief financial officer said yesterday.
Proposed labor cuts, cost deferrals and other measures in the plan won't be enough to keep company losses below $200 million in 2005 and attract equity investment needed to reorganize, David Davis, US Airways' former chief financial officer, told Judge Stephen S. Mitchell of U.S. Bankruptcy Court.
The company is in talks about a rescue plan with an unspecified number of potential investors, senior vice president Chris Chiames said during a break in the hearing.
Davis testified during hearings on the airline's bid to cancel labor contracts with three unions and impose new terms. US Airways said last week that it could be forced to liquidate by mid-January without $950 million in wage, job and benefit cuts to help cut $1.5 billion from annual spending and stem losses.
US Airways sought court approval to throw out contracts with unions for flight attendants, mechanics and baggage handlers, and customer-service and reservation agents after failing to agree on concessions.
The Communications Workers of America, representing customer-service and reservation agents, authorized leaders to call a strike if the court throws out its contract, and the Association of Flight Attendants is voting on a similar motion.
US Airways has said that a strike would force it to shut down.
Mitchell said on Dec. 2 that he isn't likely to rule on the request before January
12/10/2004
Bloomberg News reports that US Airways Group Inc., the seventh-largest U.S. airline, can't attract backing of $250 million needed to avoid liquidation and emerge from bankruptcy under its current recovery plan, the former chief financial officer said yesterday.
Proposed labor cuts, cost deferrals and other measures in the plan won't be enough to keep company losses below $200 million in 2005 and attract equity investment needed to reorganize, David Davis, US Airways' former chief financial officer, told Judge Stephen S. Mitchell of U.S. Bankruptcy Court.
The company is in talks about a rescue plan with an unspecified number of potential investors, senior vice president Chris Chiames said during a break in the hearing.
Davis testified during hearings on the airline's bid to cancel labor contracts with three unions and impose new terms. US Airways said last week that it could be forced to liquidate by mid-January without $950 million in wage, job and benefit cuts to help cut $1.5 billion from annual spending and stem losses.
US Airways sought court approval to throw out contracts with unions for flight attendants, mechanics and baggage handlers, and customer-service and reservation agents after failing to agree on concessions.
The Communications Workers of America, representing customer-service and reservation agents, authorized leaders to call a strike if the court throws out its contract, and the Association of Flight Attendants is voting on a similar motion.
US Airways has said that a strike would force it to shut down.
Mitchell said on Dec. 2 that he isn't likely to rule on the request before January
Caviar swilling POS!TC
TC
