The proposed merger between US Airways and America West Airlines has attracted a new private-equity investor, the Wellington Management Company.
Wellington has agreed to contribute $150 to the deal, bringing the total capital raised by the two airlines to $500 million. That includes investments by two hedge funds, as well as Air Canada and Air Wisconsin, according to the Wall Street Journal.
The newspaper said the funds from Wellington, a Boston-based investment management firm, were disclosed in an amended filing with the US Bankruptcy Court in Alexandria, Virginia.
That court is overseeing US Airways’ second bankruptcy filing since 2002, and the merger is the carrier’s plan of reorganization that will allow it to step out of Chapter 11 in the autumn.
The Wellington investment was described by a US Airways spokesman as “another momentum-building accomplishment as we work to quickly secure the necessary regulatory approvals and give airline passengers better choices and options later this year.”
Officials at US and America West said they hoped to attract more investors before the $1.5 billion deal is completed.
The proposed merger would create an attractive new option for business travelers looking for both low fares and full-service amenities, said the Pittsburgh Business Times. The merger will also give the airline an edge over low-cost Southwest Airlines, according to analysts.
Speculation was that the new airline would continue to operate as a hub-and-spoke carrier, featuring simplified pricing and lower fares.
The Air Transportation Stabilization Board and several federal agencies still must approve the proposed merger.
The merger if approved would create the nation’s fifth-largest airline, carrying US Airways’ name.
Report by David Wilkening
