US Airways Obtains Second Equity Commitment

15th Mar 2005

US Airways Group, Inc.
announced today that it has reached an agreement with Republic Airways
Holding, Inc., (Republic) and its majority shareholder, Wexford Capital
LLC, on an equity and financing package that includes a $125 million
investment upon US Airways’ emergence from Chapter 11, in addition to
options for obtaining $110 million of other liquidity enhancements that
would be available prior to emergence to assist the airline in completing
its restructuring. Terms of the agreement are being filed with the U.S. Bankruptcy Court for
the Eastern District of Virginia in Alexandria. US Airways will seek the
court’s approval at the next monthly omnibus hearing scheduled for its
case, which is set for Thursday, March 31, 2005, at 9:30 a.m., Eastern

Wexford is based in Greenwich, Conn., and holds a majority interest in
Republic, which operates Chautauqua Airlines and Republic Airlines. The
proposed $125 million equity investment is contingent on US Airways
securing a total of $350 million in new cash investment (including the
$125 million from Republic and the $125 million previously secured from
Eastshore Aviation, LLC) to finance the US Airways Plan of Reorganization
and other conditions, including Republic being satisfied with US Airways’
business plan. The agreement also provides for comparable treatment—
such as representation on the US Airways board of directors—as that
provided to Eastshore. The agreement also includes a commitment by US
Airways to amend and restate its existing jet service agreement with
Chautauqua, to assume that agreement and to enter into a new jet service
agreement with Republic for regional jet feed using the Embraer (EMB) 170
and 190 aircraft under the US Airways Express brand.

“We are very pleased to have secured the support of a second, well-
regarded investor and airline partner to help us build and finance our
plan of reorganization,” said Bruce R. Lakefield, US Airways president and
chief executive officer. “The Republic management team has a proven track
record and we look forward to an expanded relationship. We are well on our
way to securing at least $350 million in new capital and continue to
finalize our business plan that will leverage our competitive cost
structure and strong market positions in the eastern U.S. and the

“We appreciate all of the hard work US Airways and its employees have
accomplished thus far. We recognize there is more work to be completed but
we are pleased we are able to assist US Airways in reaching the final
phase of its reorganization process,” said Bryan Bedford, chairman,
president, and CEO of Republic Airways Holdings.

In addition to the equity investment, the agreement includes options for
additional financing for US Airways subject to the consent and approval of
the Air Transportation Stabilization Board (ATSB). Those provisions


  * Prior to the effective date of US Airways’ plan of reorganization, but
no later than Dec. 31, 2005, US Airways may exercise its option to
obtain approximately $110 million through the sale of certain assets, including ten EMB-170 aircraft currently owned by US Airways and the
three EMB-170 aircraft currently committed for delivery to US Airways;
other EMB 170 related assets, such a flight simulator and other items;
and 113 commuter slots at Ronald Reagan Washington National Airport; and
24 commuter slots at New York’s LaGuardia airport.  In addition, US
Airways will assign to Republic the leases for an additional 15 EMB-170
aircraft.  Republic would also work with US Airways to locate an Embraer
heavy maintenance facility at an agreed upon location within the US
Airways network.  Republic would enter into a regional jet service agreement that would continue the operation of the aircraft as US
Airways Express.  In addition, Republic would simultaneously lease back
the slots to US Airways.  At any time on or after the second anniversary
of the slots sale/leaseback agreement, US Airways will have the right to
repurchase the LaGuardia and Washington slots at a predetermined price.

  * After the effective date of US Airways’ Chapter 11 plan of reorganization, in the event that US Airways does not exercise the slots
sale/leaseback option, Republic has an option to purchase/assume debt
and leases for all 28 EMB-170 aircraft and to fly them as US Airways
Express.  The net effect, should this portion of the agreement be
implemented, would be the sale of US Airways’ MidAtlantic aircraft to
Republic.  If either option is exercised, Republic will comply with the
applicable provisions of all existing agreements with US Airways
regarding MidAtlantic Airways.  Customers will not be impacted, as the
EMB-170 aircraft that currently comprise the MidAtlantic fleet will
continue to fly under the US Airways Express brand, but will be operated by Republic.

“This transaction provides us with new equity, reduced debt, enhanced
liquidity, and a strengthened relationship with a key regional airline
partner, as well as efficiencies in running the business that will allow
us to focus more of our resources on the mainline operations,” said
Lakefield. “Overall, we will have both flexibility and a stronger regional
jet network that will improve both our bottom line and service to our

In light of this new equity commitment and substantial progress being made
in US Airways’ restructuring, General Electric’s GECAS subsidiary and
other affiliates have agreed to US Airways’ request to extend the date by
which the company will file its Plan of Reorganization until April 15,


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