America West Airlines (NYSE: AWA) today
announced it has received approval for $380 million in federal loan guarantees
under the Air Transportation Safety and Stabilization Act subject to the
resolution of two conditions. The loan guarantees will allow America West to
close a loan in the amount of $445 million and complete arrangements for more
than $600 million in concessions, financing and financial assistance.
“On behalf of the 13,000 employees at America West and our millions of
customers, we commend the Stabilization Board for its actions and for its
recognition that America West is important to the efficiency and viability of
the U.S. airline industry,” said W. Douglas Parker, chairman, president and
chief executive officer. “We will continue working with the Stabilization
Board and its staff over the next few days to resolve the remaining
conditions. With the approval of the loan guarantees, competition is
preserved and the viability of America West is assured well into the future.”
Approval of the loan guarantees is conditioned on America West increasing
the amount of compensation the government will receive. Approval is also
conditioned upon America West`s commitment, satisfactory to the Board, to
control growth in labor costs.
Congress and the Administration included the Air Carrier Loan Guarantee
Program in the Stabilization Act to assist viable airlines, such as America
West, which have suffered financial challenges as a result of September 11.
“The Stabilization Board and its staff have been diligent and thorough in
their analysis of our application,” added Parker. “Their willingness to work
through the holidays to approve the application in an expeditious manner is
“We`d like to thank our employees and our customers for their support and
loyalty since September 11 and during the application process,” added Parker.
“We`d also like to extend our appreciation to the numerous creditors and
business partners who provided the more than $600 million in concessions that
made the loan guarantees possible.”
“The governors and Congressional delegations from the states of Arizona,
Nevada and Ohio have worked tirelessly in support of America West,” he said.
“We`d also like to extend our gratitude to the business communities within
these three states.”
America West expects to complete documentation of the transactions,
including the loan, the Stabilization Board guarantee and the arrangements for
the concessions and additional financings and financial assistance over the
next two weeks and receive the loan proceeds by mid-January 2002.
“As the nation`s largest low-cost, hub-and-spoke airline, America West
provides important price discipline to larger, higher-cost airlines throughout
the United States,” Parker said. “We look forward to continuing to enhance
competition throughout the airline industry, and we remain committed to
providing safe, reliable and cost-effective transportation to customers
throughout North America.”