US Airways cleared to exit bankruptcy Friday September 16, 12:20 pm ET
ALEXANDRIA, Virginia (Reuters) - A federal judge on Friday approved US Airways plan to emerge from bankruptcy and merge with America West Airlines Inc., (NYSE:AWA - News) capping US Airways' second bankruptcy restructuring in three years. ADVERTISEMENT
Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia signed off on the deal that will create the fifth largest domestic airline by passenger volume.
The parties must wait 10 days before completing the transaction.
US Airways (OTC BB:UAIRQ.OB - News) says the merged company will have $2.5 billion in cash, including unrestricted and restricted amounts.
The merger plan anticipates oil prices of $58 per barrel in 2006 and $57 per barrel in 2007. Oil was trading around $64 a barrel on Friday.
"With the financial position of other carriers deteriorating, we are pleased we will have a very strong cash position, a robust business plan, a low-cost structure and a strong network," said Bruce Lakefield, US Airways CEO and soon to be vice chairman of the new airline.
Delta Air Lines Inc. (NYSE:DAL - News) and Northwest Airlines Corp. (NasdaqNM:NWAC - News) filed for bankruptcy protection on Wednesday.
The merged company will fly under the US Airways flag and be based at America West headquarters in Tempe, Arizona. Its stock will trade on the New York Stock Exchange under the symbol "LCC" (NYSE:LCC.TO - News).
Creditors of US Airways and shareholders of America West have already approved the deal.
Mitchell earlier Friday gave approval to a severance plan for 23 US Airways executives, who will either lose their jobs in the merger, or soon after.
Unions at US Airways opposed the packages, calling them an insult to thousands of regular workers who took pay and benefit cuts in the reorganization.
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Northwest Pilots See Cuts
By Ross Snel TheStreet.com Staff Reporter 9/16/2005 12:31 PM EDT Click here for more stories by Ross Snel
Northwest Airlines (NWAC:Nasdaq - commentary - research - Cramer's Take) will lay off about 400 pilots in the coming months as it reduces mainline flights during its Chapter 11 restructuring.
Northwest informed its unit of the Air Line Pilots Association of those changes Thursday, according to the union's Web site.
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The Eagan, Minn.-based airline, which along with Delta Air Lines (DAL:NYSE - commentary - research - Cramer's Take) filed for bankruptcy protection Wednesday evening, told ALPA it will reduce mainline block flying hours by 13%. The resulting layoffs will begin Nov. 1.
A Northwest representative declined to comment on the disclosures by the pilots' union but noted the airline has already announced it would reduce its capacity in the fourth quarter by 5% to 6% from the year-earlier period. At the end of 2004, the carrier had 5,100 pilots represented by ALPA, according to company filings.
The term mainline refers to a network airline's standard routes on large passenger jets, which differ from smaller feeder flights typically contracted out to regional airlines.
The union pointed out the layoffs were the result of reduced flying levels and not contract changes.
Northwest is now seeking a total of $1.4 billion in annual savings from all its labor groups, a figure that includes $265 million in concessions ALPA made late last year. However, the airline is expected to ask pilots for more savings as it tries to use the bankruptcy process to extract new contracts from workers.
Northwest shares will likely be cancelled and rendered worthless if and when the airline emerges from bankruptcy, but they do still trade and were at 86 cents Friday.
-------------------- The sun even shines on a dogs ass someday, have patience my friend ur day will come!
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this is like the biggest news i have seen in a while i am surprised it took so long to move i am in at .21 will go for more if and whne it breaks .25
Goodluck
-------------------- The sun even shines on a dogs ass someday, have patience my friend ur day will come!
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I have 5k that settles on Monday! Man would I ever put that in here right now, if I could! This is a bomb waiting to mushroom very nicely for those who are buying now!
-------------------- Nothing moves a sub like news!!!
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