Four airlines bid for US Airways assets-sources
Reuters, 01.27.04, 11:19 AM ET
By Kathy Fieweger
CHICAGO (Reuters) - Four U.S. airlines have bid on various assets put on the block by US Airways, including American Airlines, which wants the East Coast shuttle, according to banking sources familiar with the matter.
The airline is looking for ways to cut costs 10 months after emerging from bankruptcy protection in a bid to survive and avoid another trip to the courts.
-Executives at American Airlines parent AMR Corp., which recently reported a much narrower fourth-quarter loss, have sought the shuttle for years, said the sources, who requested anonymity. In 1997, American bid about $300 million for the shuttle.
The shuttle was for sale again in 2001, when UAL Corp.'s United Airlines tried to buy US Airways. That deal failed after it was blocked by antitrust regulators.
With around $3 billion in cash and its finances somewhat stabilized since its brush with bankruptcy last year, Fort Worth, Texas-based American finds the chance to buy the shuttle worth pursuing, the sources said. (Thanks to our worthless ass union this purchase will be financed by the concessions that were forced upon us)
The shuttle, which flies between New York, Washington, D.C. and Boston, is expected to fetch around $100 million to $150 million, they said.
Also bidding on different pieces of US Airways assets are JetBlue Airways Corp., Delta Air Lines Inc. and AirTran Holdings Inc.
Bids were submitted last Thursday, according to bankers, and the US Airways board is to meet in early February to review the proposals.
Spokesmen at the airlines did not immediately return calls seeking comment.
JetBlue has bid for the shuttle and other assets, the sources said. Delta, which already flies an East Coast Shuttle, was said to be interested in US Airways' non-hub flying slots and "pretty much everything" except the shuttle, according to one source.
EXPLORATORY PROCESS
US Airways spokesman David Castelveter said the company has acknowledged that it has begun an "exploratory process" regarding its financial options but added: "We have not made a decision to sell any assets."
US Airways, which emerged from Chapter 11 bankruptcy last year after an 8-month stay, received a government-backed loan via the Air Transportation Stabilization Board. It must meet certain financial covenants by June 1.
In addition, General Electric Co.'s finance arm is financing the airline's purchase of regional jets, but requires a credit rating maintained at B minus.
JetBlue, the low-fare carrier based in New York, continues to expand its popular service featuring live TV and leather seats. Last week it said it filed with the U.S. Department of Transportation for 10 slots to begin service from New York's LaGuardia Airport this spring.
(Additional reporting by Meredith Grossman Dubner)
Copyright 2004, Reuters News Service
Reuters, 01.27.04, 11:19 AM ET
By Kathy Fieweger
CHICAGO (Reuters) - Four U.S. airlines have bid on various assets put on the block by US Airways, including American Airlines, which wants the East Coast shuttle, according to banking sources familiar with the matter.
The airline is looking for ways to cut costs 10 months after emerging from bankruptcy protection in a bid to survive and avoid another trip to the courts.
-Executives at American Airlines parent AMR Corp., which recently reported a much narrower fourth-quarter loss, have sought the shuttle for years, said the sources, who requested anonymity. In 1997, American bid about $300 million for the shuttle.
The shuttle was for sale again in 2001, when UAL Corp.'s United Airlines tried to buy US Airways. That deal failed after it was blocked by antitrust regulators.
With around $3 billion in cash and its finances somewhat stabilized since its brush with bankruptcy last year, Fort Worth, Texas-based American finds the chance to buy the shuttle worth pursuing, the sources said. (Thanks to our worthless ass union this purchase will be financed by the concessions that were forced upon us)
The shuttle, which flies between New York, Washington, D.C. and Boston, is expected to fetch around $100 million to $150 million, they said.
Also bidding on different pieces of US Airways assets are JetBlue Airways Corp., Delta Air Lines Inc. and AirTran Holdings Inc.
Bids were submitted last Thursday, according to bankers, and the US Airways board is to meet in early February to review the proposals.
Spokesmen at the airlines did not immediately return calls seeking comment.
JetBlue has bid for the shuttle and other assets, the sources said. Delta, which already flies an East Coast Shuttle, was said to be interested in US Airways' non-hub flying slots and "pretty much everything" except the shuttle, according to one source.
EXPLORATORY PROCESS
US Airways spokesman David Castelveter said the company has acknowledged that it has begun an "exploratory process" regarding its financial options but added: "We have not made a decision to sell any assets."
US Airways, which emerged from Chapter 11 bankruptcy last year after an 8-month stay, received a government-backed loan via the Air Transportation Stabilization Board. It must meet certain financial covenants by June 1.
In addition, General Electric Co.'s finance arm is financing the airline's purchase of regional jets, but requires a credit rating maintained at B minus.
JetBlue, the low-fare carrier based in New York, continues to expand its popular service featuring live TV and leather seats. Last week it said it filed with the U.S. Department of Transportation for 10 slots to begin service from New York's LaGuardia Airport this spring.
(Additional reporting by Meredith Grossman Dubner)
Copyright 2004, Reuters News Service
Say it ain't so! I thought we were broke and at the steps of the bankruptcy court!
