US Airways Group, Inc, announced Monday, that in order to facilitate the prompt completion of its restructuring initiatives, the Company and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. The airline commented that this action will allow the company to effect cost savings from aircraft lessors and financiers and other key stakeholders as a means of ensuring the Company`s return to profitability.
The Company filed its petitions on Sunday evening in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria. The Company`s petitions listed assets of approximately $7.81 billion and liabilities of approximately $7.83 billion. The Court has scheduled a hearing on the Company`s first day motions for 10:30 a.m. EDT on Monday, Aug. 12, 2002, before the Honorable Robert G. Mayer in Courtroom No. 3 at the Martin Bostetter Jr. U.S. Courthouse in Alexandria.
This bankruptcy filing by US Airways serves as a reminder of the financial struggles that are still facing the U.S. airline industry nearly a year after the devastating Sept. 11 attacks.
In the official company statement issued by Rosenbluth International , they urge major carriers to rethink the current business model, which they claim to be broken: “Rosenbluth International will remain fully supportive of US Airways during its Chapter 11 reorganization period. US Airways has been a good partner to Rosenbluth International`s client base and we look forward to its return as a profitable and highly competitive company.
“While we understand US Airways` need for drastic and dramatic action that addresses the spiraling costs of their enterprise, we also believe that all the major carriers should focus attention on fixing the revenue side of the equation by rethinking and fundamentally changing the current broken pricing model.”
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