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US Airways' $100 million aircraft, slot sale allowed; $120 million sale/leaseback initially approved
By Caroline Salls
Pittsburgh, Sept. 2 - US Airways Group, Inc. obtained court approval Friday for its $100 million sale of Embraer regional jet aircraft and slot assets to Republic Airways Holdings, according to a company news release.
Closing is expected to occur within the next two weeks.
According to the release, US Airways also received interim approval to sell and leaseback five Airbus A330s, nine Airbus A319s and five Airbus A320s.
The final hearing on the sale and leaseback transactions is scheduled for Sept. 9.
If approved, US Airways will realize more than $120 million in additional liquidity, bringing the total liquidity generated from aircraft transactions in connection with its emergence from Chapter 11 to about $300 million.
The company said in the release that this will strengthen its cash position as part of its proposed merger with America West Airlines.
As previously reported, if the merger closes as planned, the new airline is expected to have $2.5 billion in total cash shortly after closing, including about $800 million in restricted cash.
"The additional liquidity realized from these transactions, when added to the cash being generated from other capital resources, should allow us to emerge from Chapter 11 with an even larger cash cushion than originally anticipated," US Airways executive vice president of finance and chief financial officer Ron Stanley said in the release.
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.
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