dispatchguy
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http://biz.yahoo.com/prnews/050113/nyth063_1.html
Agreement Coincides with Plans for Emergence from Chapter 11 CEO Calls Announcement a 'Huge Boost' for Customers, Employees and Vendors
ARLINGTON, Va., Jan. 13 /PRNewswire-FirstCall/ -- US Airways Group, Inc. and the Air Transportation Stabilization Board (ATSB) have reached an agreement that extends the airline's use of cash proceeds from its federally guaranteed loan through June 30, 2005, paving the way for the airline to continue operations while it completes its restructuring and planned emergence from Chapter 11 this summer.
The company has been operating with the use of ATSB cash collateral since its Chapter 11 filing on Sept. 12, 2004. An initial agreement was extended until Jan. 15, 2005, and the new extension will be presented to the U.S. Bankruptcy Court for the eastern district of Virginia for approval at a hearing today.
"This long-term extension is a huge boost for our customers, employees and business partners, as we work to complete our transformation into a low-cost airline," said Bruce R. Lakefield, president and chief executive officer of US Airways. "Our customers should book us with confidence, knowing that we have sufficient cash to operate as well as to implement the many changes that are already under way. For our employees, this extension conveys that their sacrifices are an investment in the company's future, as we demonstrate to the ATSB and others that we are working hard to be a competitive and successful airline. And for our vendors and business partners that have been working with us throughout this restructuring, this agreement is a signal that those efforts are well worth it, as we will remain a player in the industry."
Details of the agreement will be filed with the court. The provisions are consistent with the previous agreement with the ATSB as well as the company's agreement with the General Electric Capital Aviation Services (GECAS), that it maintain minimum weekly cash balances and sufficient liquidity. Achieving these cash requirements is dependent on the company securing the cost savings in the proposals made by the company last week to the International Association of Machinists (IAM), either through ratification of the proposals by IAM members or by implementing the Bankruptcy Court's Jan. 6, 2005, decision that rejected the IAM labor contracts. Ratification for the three separate IAM workgroups is to conclude on Jan. 21, 2005.
"We have worked very closely with the ATSB to provide them with solid information and assurances about the progress we have made in our restructuring. Securing the GECAS agreement on aircraft financing and labor cost reductions were significant milestones," said Lakefield. "Those achievements, in combination with the ATSB's collateral holdings and the management team's laser focus on keeping this restructuring on track, provide the platform for the nearly six-month extension that is an important confidence builder so that customers can book us as they normally would -- especially during the spring, which is traditionally our most profitable season.
"While we still have much work to do, I think our most difficult period is behind us and my sense is that our employees are united in working with us to complete the restructuring," said Lakefield. "This extension essentially builds us the necessary runway for a take-off this summer. In the meantime, we will continue to work closely with the ATSB so that they remain informed and supportive of our efforts."
Agreement Coincides with Plans for Emergence from Chapter 11 CEO Calls Announcement a 'Huge Boost' for Customers, Employees and Vendors
ARLINGTON, Va., Jan. 13 /PRNewswire-FirstCall/ -- US Airways Group, Inc. and the Air Transportation Stabilization Board (ATSB) have reached an agreement that extends the airline's use of cash proceeds from its federally guaranteed loan through June 30, 2005, paving the way for the airline to continue operations while it completes its restructuring and planned emergence from Chapter 11 this summer.
The company has been operating with the use of ATSB cash collateral since its Chapter 11 filing on Sept. 12, 2004. An initial agreement was extended until Jan. 15, 2005, and the new extension will be presented to the U.S. Bankruptcy Court for the eastern district of Virginia for approval at a hearing today.
"This long-term extension is a huge boost for our customers, employees and business partners, as we work to complete our transformation into a low-cost airline," said Bruce R. Lakefield, president and chief executive officer of US Airways. "Our customers should book us with confidence, knowing that we have sufficient cash to operate as well as to implement the many changes that are already under way. For our employees, this extension conveys that their sacrifices are an investment in the company's future, as we demonstrate to the ATSB and others that we are working hard to be a competitive and successful airline. And for our vendors and business partners that have been working with us throughout this restructuring, this agreement is a signal that those efforts are well worth it, as we will remain a player in the industry."
Details of the agreement will be filed with the court. The provisions are consistent with the previous agreement with the ATSB as well as the company's agreement with the General Electric Capital Aviation Services (GECAS), that it maintain minimum weekly cash balances and sufficient liquidity. Achieving these cash requirements is dependent on the company securing the cost savings in the proposals made by the company last week to the International Association of Machinists (IAM), either through ratification of the proposals by IAM members or by implementing the Bankruptcy Court's Jan. 6, 2005, decision that rejected the IAM labor contracts. Ratification for the three separate IAM workgroups is to conclude on Jan. 21, 2005.
"We have worked very closely with the ATSB to provide them with solid information and assurances about the progress we have made in our restructuring. Securing the GECAS agreement on aircraft financing and labor cost reductions were significant milestones," said Lakefield. "Those achievements, in combination with the ATSB's collateral holdings and the management team's laser focus on keeping this restructuring on track, provide the platform for the nearly six-month extension that is an important confidence builder so that customers can book us as they normally would -- especially during the spring, which is traditionally our most profitable season.
"While we still have much work to do, I think our most difficult period is behind us and my sense is that our employees are united in working with us to complete the restructuring," said Lakefield. "This extension essentially builds us the necessary runway for a take-off this summer. In the meantime, we will continue to work closely with the ATSB so that they remain informed and supportive of our efforts."
