American West to Buy Bankrupt U.S. Airways

May 27, 2005

IN a move that proposes to mergethe United States’ seventh- and eighth-rankedairlines, America West HoldingsCorp. and a group of investors last weekannounced plans to buy bankrupt U.S.Airways.Neither America West nor U.S.Airways, both of which fly to Costa Rica,will make any immediate changes in theirroutes or schedules, according to a statementon America West’s Web site,www.americawest.com.If the merger is successful, the airlinewould become the sixth-biggest domesticcarrier in the United States. It would usethe U.S. Airways name but be based inTempe, Arizona, at America West’s currentheadquarters. U.S. Airways is basedin Arlington, Virginia.If the U.S. Bankruptcy Court ruleson the U.S. Airways case later this yearas expected and the airlines receive thenecessary approval by U.S. antitrust andtransportation officials, the airlines willbegin to coordinate scheduling and frequentflier programs, but will maintaintheir own certificates and names for afew years to follow for regulatory purposes.The transaction will require approximately$1.5 billion of new capital frompartners and suppliers, aircraft-relatedfinancings or sales, the release of cashreserves and new investors.

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