Struggling US Air gets extended life
US Airways will be able to keep flying through June after a bankruptcy judge approved a deal that extends the struggling company’s financing.
US Bankruptcy Judge Stephen Mitchell approved a loan extension from the Air Transportation Stabilization Board through June 30.
The extension follows the airline getting $800 million in concessions from its labor unions, which have agreed to accept pay and benefit cuts.
“While we still have much work to do, I think our most difficult period is behind us and my sense is that our employees are united in working with us to compete the restructuring,” CEO Bruce Lakefield told the Associated Press.
US Air can also ask for another loan extension after June 30.
In other related developments, some observers say travel agents may have an important say in US Air’s survival.
Following the airline’s meltdown over the Christmas holiday, some flyers are reluctant to again trust US Air.
“Therein lies the challenge for the airline: If travel agents don’t feel comfortable booking clients on US Airways, the company’s revenue could take an even bigger hit, wrote USA Today.
“Travel agents have the capacity to steer clients in other directions to avoid potential service problems,” said William Rochelle, a partner at NYC law firm Fulbright & Jaworski, whose specialties include aviation bankruptcy.
“It is the travel agents who are going to decide if US Air has a chance to survive.”
Report by David Wilkening
David
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