US Airways to sell aircraft, slot assets to Republic Airways for $100 million

By Caroline Salls

Pittsburgh, June 23 - US Airways Group Inc. will proceed with plans to sell some of its Embraer regional jet aircraft and slot assets to Republic Airways Holdings but will not make Republic an equity investor, according to a company news release.

The sale will generate about $100 million in liquidity for US Airways as it completes its Chapter 11 restructuring and eventual merger with America West Airlines, according to the release.

The regional jets and the slots will continue to operate as US Airways Express.

In March, US Airways announced a multi-part agreement with Republic Airways and its affiliated Wexford Capital LLC to sell assets and to enter into an agreement allowing Republic/Wexford to be an equity investor in the US Airways Chapter 11 restructuring.

Since that time, the US Airways-America West merger has been announced, the US Airways business plan has changed and other equity participants have committed to invest in the merged companies.

Subsequently, US Airways notified Republic/Wexford that it does not intend to ask it to purchase the new common stock to be issued in connection with the reorganization and merger, but it does intend to proceed with the asset sale.

Under the terms of the asset sale agreement, Republic will purchase or assume the leases of 28 Embraer 170 aircraft from US Airways and will operate them in the US Airways network under a regional jet service agreement that has been negotiated and approved by the bankruptcy court

Until Republic receives its operating certificate from the FAA, which is expected Sept. 1, US Airways will lease the aircraft back from Republic and continue to operate them.

In addition, US Airways will sell, and then lease back from Republic, 113 commuter slots at Ronald Reagan Washington National Airport and 24 commuter slots at New York LaGuardia Airport.

US Airways holds the right to repurchase the slots anytime after the second anniversary of the slot sale/leaseback transaction.

US Airways and Republic remain in discussions about additional 70- and 90-seat regional jets that might be added to the US Airways Express fleet in future years.

US Airways, an Arlington, Va.-based airline, filed for bankruptcy on Sept. 12, 2004 with the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 04-13819.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.