Thursday August 19, 5:39 pm ET
CHICAGO, Aug 19 (Reuters) - The chief executive of US Airways (NasdaqNM:UAIR - News) said on Thursday that a Chapter 11 bankruptcy filing is still a possibility for the ailing carrier but that talk of an impending liquidation was unfounded.
CEO Bruce Lakefield issued a letter to employees responding to news stories in which the airline's chairman, David Bronner, was quoted as saying employees must agree to $800 million in new concessions within 30 days or the airline might be liquidated.
"The discussions about another Chapter 11 filing are grounded in the fact that, given our financial obligations, it is a very real possibility," Lakefield wrote. "(But) the talk of an imminent shutdown, a disruption of service, or impending liquidation is simply not true. If Chapter 11 becomes necessary, our survival will remain dependent upon transformation."
US Airways, the No. 7 U.S. air carrier, emerged from bankruptcy nearly a year and a half ago with some financing from Retirement Systems of Alabama, the pension fund Bronner runs.
The company, which must meet certain covenants in its federally guaranteed loan agreements by September 30, has repeatedly said it needs restructured labor pacts quickly.
"Yes, it is painful, and yes, it will require sacrifices," Lakefield said. "But if we can quickly reach labor agreements, the outcome remains in our hands and we can get through this."
Unions agreed to major concessions to help the carrier emerge from bankruptcy last year.
The $800 million more in proposed labor savings are part of the carrier's plan to slash overall costs by $1.5 billion. It is seeking $295 million from pilots, $263 million from mechanics and fleet service workers, $122 million from reservation agents and passenger service and ticket counter employees, and $116 million from flight attendants.
US Airways earlier this week asked the U.S. Internal Revenue Service for permission to reschedule some pension plan contributions to help it conserve cash.
Low costs, a simplified fare structure and a strong route network in the eastern United States, the Caribbean and Latin America are key to the carrier's restructuring, Lakefield said.
He acknowledged that the board of directors, management, union leaders and employees share similar frustrations.
"We are frustrated by the fact that even after our successful trip through bankruptcy, the company still is not profitable and we need to do more," he said.
CHICAGO, Aug 19 (Reuters) - The chief executive of US Airways (NasdaqNM:UAIR - News) said on Thursday that a Chapter 11 bankruptcy filing is still a possibility for the ailing carrier but that talk of an impending liquidation was unfounded.
CEO Bruce Lakefield issued a letter to employees responding to news stories in which the airline's chairman, David Bronner, was quoted as saying employees must agree to $800 million in new concessions within 30 days or the airline might be liquidated.
"The discussions about another Chapter 11 filing are grounded in the fact that, given our financial obligations, it is a very real possibility," Lakefield wrote. "(But) the talk of an imminent shutdown, a disruption of service, or impending liquidation is simply not true. If Chapter 11 becomes necessary, our survival will remain dependent upon transformation."
US Airways, the No. 7 U.S. air carrier, emerged from bankruptcy nearly a year and a half ago with some financing from Retirement Systems of Alabama, the pension fund Bronner runs.
The company, which must meet certain covenants in its federally guaranteed loan agreements by September 30, has repeatedly said it needs restructured labor pacts quickly.
"Yes, it is painful, and yes, it will require sacrifices," Lakefield said. "But if we can quickly reach labor agreements, the outcome remains in our hands and we can get through this."
Unions agreed to major concessions to help the carrier emerge from bankruptcy last year.
The $800 million more in proposed labor savings are part of the carrier's plan to slash overall costs by $1.5 billion. It is seeking $295 million from pilots, $263 million from mechanics and fleet service workers, $122 million from reservation agents and passenger service and ticket counter employees, and $116 million from flight attendants.
US Airways earlier this week asked the U.S. Internal Revenue Service for permission to reschedule some pension plan contributions to help it conserve cash.
Low costs, a simplified fare structure and a strong route network in the eastern United States, the Caribbean and Latin America are key to the carrier's restructuring, Lakefield said.
He acknowledged that the board of directors, management, union leaders and employees share similar frustrations.
"We are frustrated by the fact that even after our successful trip through bankruptcy, the company still is not profitable and we need to do more," he said.
