US Airways asks court for extension,new leases


Dec 9, 2002
[BR]Reuters[BR]US Airways to ask court for extension, new leases[BR]Thursday December 12, 12:24 am ET NEW YORK, Dec 12 (Reuters) - US Airways Group (OTC BB:UAWGQ.OB - News) will ask a federal bankruptcy judge on Thursday to give it until the end of January to file its plan of reorganization without interference from other parties, although the airline's lead investor has instructed it to file the plan if possible by Dec. 20.[BR]Judge Stephen Mitchell of the U.S. Bankruptcy Court of the Eastern District of Virginia has already granted US Airways interim approval to extend the period in which it, exclusively, can file its reorganization plan to January 31.According to court documents, US Airways will request final approval at a bankruptcy court hearing in Alexandria on Thursday, but the airline has said it asked for the extension simply as a precaution. US Airways President and Chief Executive David Siegel said on Wednesday that the carrier still intends to file its plan by Dec. 20 in order to stay on track for a targeted March emergence from bankruptcy.The Retirement Systems of Alabama, which has agreed to finance US Airways with a package totaling at least $740 million, reserved the right in a court filing to object to or comment on US Airways' request.The Arlington, Virginia-based airline has also filed to ask the court to let it sign a deal to a start regional jet service using Midway Airlines, which closed down the day after the Sept. 11, 2001 attacks.Major U.S. airlines have turned in force toward boosting their use of smaller, cheaper regional jets as a way to save on costs and reach less-populated markets that rarely fill bigger aircraft.Under a tentative deal inked between US Airways and Midway in July, Midway agreed to operate regional jets under the US Airways Express moniker. US Airways would sell tickets for the flights, and would handle reservations and ground support.US Airways will also ask the judge to let it reject leases on mortgages on certain airplanes and equipment, and replace the financing with cheaper agreements.The airline said in a Nov. 25 filing that it could save $85 million a year with such a move, which it said would involve 16 Boeing 737s and 18 Boeing 757s. [BR][BR][BR][BR]