US Airways seeks financing for three jets, failure could cost firm $10 million

By Ted A. Knutson

Washington, May 4 - US Airways Group Inc. said it is seeking financing for three Embraer-Empresa Brasileira de Aeronáutica SA EMB-170 jets.

The company was supposed to take delivery of the aircraft by March 31. If it doesn't by July 31, the company said it could owe damages to Embraer of up to $10 million. After the July date, Embraer will no longer be obligated to sell the jets to the airline.

US Airways currently is paying Embraer $162,795 million per jet for failing to meet the March 31 deadline.

The company said it is recorded a charge of $2 million in the first quarter expected to be incurred for penalties related to failure to buy the jets when promised.

The Arlington, Va.-based carrier filed for bankruptcy on Sept. 12, 2004 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 04-13819.

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