US Airways has concluded a vital finance deal with its biggest creditor as the airline battles to emerge from bankruptcy protection in the first quarter of this year.
GE Capital has agreed to make a USD$120 million loan to the carrier to fund its restructuring. Once US Airways emerges from bankruptcy, which it aims to do by March this year, it will receive a further USD$710 million in financing from GE.
The airline says that some of the second tranche will be used to scrap all its turbo-prop aircraft and replace them with regional jets.
According to a report in the Washington Post, the finance arrangement will see GE get a 5 percent stake in the restructured carrier through preference shares and options.
US Airways has still to receive final approval of USD$900 million federal loan from the US Air Transportation Stabilization Board which is crucial to its reorganization plans.