Air Transport World

North America report. (News Briefs).

Bankrupt US Airways Group, in a surprising development, chose Retirement System of Alabama to be the "equity sponsor" in its reorganization plan, rejecting Texas Pacific Group, which had been its planned partner since the airline filed for bankruptcy protection in mid-Aug. RSA emerged as a competing bidder to David Bonderman-led TPG in Sept., proposing to invest $240 million for a 37.5% stake in the airline. TPG had offered $200 million for an equal stake.

Under the definitive investment agreement announced Sept. 26, RSA also agreed to provide $500 million in debtor-in-possession financing on "substantially the same terms" as the company's original DIP facility originated by Credit Suisse First Boston and Bank of America Corp. with participation from TPG. Additionally, the carrier said it reached an agreement with RSA concerning approximately $340 million in aircraft-backed debt obligations held by the pension fund.

The airline noted that the agreement with RSA had been endorsed by the company's unsecured creditors but is subject to "higher or otherwise better offers." US Airways said it will couple the investment with the $1 billion collateralized loan backed by a $900 million federal guarantee that was approved conditionally by the Air Transportation Stabilization Board upon its emergence from Chapter 11, targeted for first-quarter 2003. It also said it remains on track to file its disclosure statement and plan of reorganization in Dec.

Separately, US Airways began sending furlough notices to 278 pilots and will furlough 642 fleet service and customer service employees as well owing to weak air travel demand and fleet reductions that are part of its restructuring plan.

American Airlines, on the heels of reporting a $942 million third-quarter net loss or $475 million before special charges, will defer 34 new aircraft scheduled for delivery through 2005 and park 42 older ones. AA declined to identify the types of aircraft being deferred, but under a revised agreement with Boeing the airline will take only 11 jets in 2003, comprising nine 767-300s and two 777s, compared to the original plan to take 19. No aircraft will be delivered in 2004 or 2005. Previously, AA expected to take 13 aircraft in each year. The result will be a reduction in capital spending of $1.5 billion through 2005. The airline is also "temporarily parking" 28 MD-80s and 14 767-200s starring early this year, although this will not affect capacity. They are expected to stay grounded until at least 2005. AA expects to save "in excess of $100 million in expenses largely owing to reduced maintenance charges. …

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