America West and US Airways have received approval from the Air Transportation Stabilization Board (ATSB) to go forward with their merger.
Both carriers hold loans backed by a federal guarantee from the ATSB. The two have been in negotiations on how to handle these loans under their proposed merger.
“We are grateful for the Board’s unanimous endorsement of our proposed merger with US Airways,” said America West Chairman and CEO Doug Parker.
“Today’s announcement continues the positive momentum for our planned merger and brings us one step closer to building a stable future for our airlines,” he added. According to a press release,
In January 2002, America West Airlines, Inc. closed a $429 million loan backed by a $380 million federal loan guarantee provided by the ATSB. The current outstanding balance on this loan is $300 million. US Airways, Inc. received a $900 million loan guarantee under the Air Transportation Safety and System Stabilization Act from the ATSB in connection with a $1 billion term loan financing that was funded on March 31, 2003. The current outstanding balance of that airline’s loan is $708 million.
America West Holdings Corporation is an aviation and travel services company. Wholly owned subsidiary America West Airlines is the nation’s second largest low-fare carrier with 14,000 employees serving approximately 60,000 customers a day in more than 90 destinations in the U.S., Canada, Mexico and Costa Rica.
“We appreciate the ATSB working closely with us to further our efforts to restructure US Airways and preserve jobs while protecting the federal government’s interests. Their action today will enable the new US Airways to become a stronger and more viable airline,” said US Airways President and CEO Bruce R. Lakefield.
In yesterday’s trading, US Airways shares went down 1.4 percent to 73 cents, while America West shares went down 3.7 percent, hitting $8.07.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
