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US Airways files for bankruptcy
US Airways has filed for bankruptcy; the first major US airline to do so since 11 September.
The airline and its subsidiaries have applied to the US Bankruptcy Court for financial reorganisation under Chapter 11 of the Bankruptcy Code. This means that the airline is given relief from paying debtors while restructuring takes place.
A statement from the airline said: “It is important that our valued passengers and other constituents understand that US Airways is not going out of business. Chapter 11 gives us time to renegotiate contracts with key aircraft lessors and financiers and return aircraft no longer needed. Every ticket will be honored and accepted; refunds and exchanges will be in accordance with current US Airways policies”.
US Airways has suffered under the prolonged closure of Reagan National Airport in Washington, which although not a hub is one of the carriers nonstop destinations, and handles around 230 US Airways departures a day. High security costs and a depressed US economy have also contributed to US Airways’ losses, estimated to be more than £1 billion in the last year.
US Airways president and chief executive, David Siegel said: “Ultimately, this effort is about our customers, employees, and the communities we serve, as we seek to fix the airline’s finances and return to profitability”. The carrier hopes to re-emerge from bankruptcy by the first quarter of 2003.
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