US Airways: United code-sharing on track



US Airways: United code-sharing on track
CHARLOTTE (Business Journal) - US Airways Group Inc. says it doesn''t expect United Airlines'' bankruptcy protection filing to affect the code-sharing and marketing alliance the two airlines agreed to earlier this year.
Chicago-based United says that after its Chapter 11 filing it will operate as usual, honoring all future tickets and frequent flier and passenger club benefits, as well as continuing to pay vendors, employees and others.
David Castelveter, a spokesman for Arlington, Va.-based US Airways, says the airline sees no reason to think that it and United will not be able to carry out the alliance.
We expect that to move forward, Castelveter says.
US Airways filed for Chapter 11 protection in August.
United and US Airways received approval for their alliance from the U.S. Department of Transportation in October. Under the agreement, passengers on either airline will be able to book flights that involve both airlines. Passengers also will be able to earn and redeem miles on either airline''s frequent flier program.
Both United and US Airways, which runs a hub at Charlotte/Douglas International Airport, have been hit hard by the decline in air travel following the Sept. 11, 2001 terrorist attacks.
Last week, the Air Transportation Stabilization Board denied United''s request for $1.8 billion in federal loan guarantees, and United filed for Chapter 11 protection from creditors while it reorganizes itself.
US Airways, which is awaiting final approval from the board regarding $900 million in loan guarantees that it has requested, expects to emerge from Chapter 11 by March.
However, according to a Dec. 7 story in The New York Times, David Bronner, the chief executive of US Airways'' primary lender, the Retirement Systems of Alabama, threatened that a liquidation of the airline could be necessary if employee unions don''t agree to concede an additional $200 million in wages and benefits.
The unions already have collectively agreed to roughly $1 billion in concessions over the next several years, as part of US Airways'' plan to realize $1.6 billion in annual cost savings.
What''s their alternative? Mr. Bronner said in the Times story. If they don''t want to do this, we''ll Chapter 7 it.
The Alabama pension fund, as part of its $240 million investment in US Airways, is slated to receive a nearly 38% stake in the airline, in addition to seven of 13 board seats — effectively giving the public pension fund control of US Airways. The fund also has agreed to provide $500 million in debtor-in-possession financing to the airline.
Castelveter, the US Airways spokesman, declined to comment on Mr. Bronner''s remarks in the Times story.