Republic to buy US Airways aircraft, gates
ARLINGTON (Charlotte Business Journal) - Republic Airways Holdings Inc. says it will proceed with plans to purchase 28 Embraer 170's aircraft and other assets from US Airways Group Inc. for $100 million.
Indianapolis-based Republic Airways will buy 10 aircraft, assume the leases on an additional 18 and operate themin the US Airways network under a previously negotiated regional-jet service agreement.
Republic Airways will also purchase, and then lease back to US Airways, 113 commuter slots at Ronald Reagan Washington National Airport, and 24 commuter slots at New York LaGuardia Airport. Other assets to be acquired include a flight simulator, spare parts, and certain facilities to support aircraft operations.
The transaction is slated to close on or before July 31.
Virginia-based US Airways will have the right to repurchase the slots.
Republic Airways expects to take delivery of the first Embraer 170 late this summer.
Republic Airways operates Chautauqua Airlines, Republic Airlines and Shuttle America. The company offers scheduled passenger service on more than 800 flights daily to 82 cities in 32 states, Canada and the Bahamas through airline services agreements with four major U.S. airlines.
US Airways, which is operating under Chapter 11 bankruptcy protection, announced in March a multi-part agreement with Republic Airways and its affiliate Wexford Capital to sell certain assets and make the company an equity investor in the restructured airline. However, when US Airways announced plans last month tomerge with America West Holdings Corp. of Arizona, the pact with Republic shifted.
However, the asset sale is going forward.
The combination US Airways and America West will create the sixth-largest airline in the United States, forming a carrier that will rival Dallas-based Southwest in size, with a wide choice of routes.
US Airways operates 34 gates at Charlotte/Douglas International Airport, its largest and most profitable hub.
The new company will take the US Airways name and be headed by America West Chief Executive Doug Parker,who has been named CEO and chairman of the new company.
Once integrated, the new carrier plans on maintaining its hubs in Charlotte, Philadelphia and Phoenix, along with secondary hubs in Las Vegas and Pittsburgh.
Republic Airways to Purchase Embraer 170 Aircraft Slots and Other Assets from US Airways
ARLINGTON (Dow Jones Newswires) - Republic Airways Holdings Inc. (RJET) will buy about $100 million worth of assets from US Airways Group Inc. (UAIRQ) as part of an agreement reached in March to infuse liquidity into the bankrupt carrier to help it emerge from Chapter 11.
In separate releases Thursday, the two companies said they agreed to proceed with the asset-purchase agreement whereby regional-carrier Republic Airways will buy 28 jet aircraft and other assets from US Airways.
US Airways, however, doesn't intend to request Republic and its majority owner, Wexford Capital LLC, to purchase the new common stock to be issued in connection with US Airways' reorganization and its merger with America West Holdings Corp. (AWA).
The equity investment was also part of the March agreement. However, US Airways has since agreed to the America West merger in which other equity participants have committed to invest in the merged companies.
Republic Airways will purchase 10 aircraft and assume the leases of an additional 18 Embraer 170 aircraft, and will operate them in the US Airways network under a previously negotiated agreement approved by the Bankruptcy Court.
Until Republic receives its operating certificate from the Federal Aviation Administration -- expected Sept. 1 -- US Airways will lease the aircraft back from Republic and continue to operate them.
In addition to the Embraer aircraft, Republic Airways will also purchase, and then lease back to US Airways, 113 commuter slots at Ronald Reagan Washington National Airport, and 24 commuter slots at New York LaGuardia Airport. The purchase of assets is expected to close on or before July 31.
US Airways will have the right to repurchase the slots. US Airways and Republic said they remain in discussions about additional 70 and 90-seat regional jets that might be added to the US Airways Express fleet in future years.
Under the original March agreement, Republic Airways and Wexford Capital were to buy $125 million of US Airways stock after the company emerged from bankruptcy-court protection. These funds were on top of another $125 million in equity financing pledged in February by an affiliate of Air Wisconsin Airlines Corp.
At the time, US Airways was said to be looking for $250 million of new cash to help it step out of court protection, which was slated for this summer.
Regards,
USA320Pilot