Sun, Sep 18, 2005 - Page 11 News List

US Airways wins approval for plan to reorganize, merge

AFP , WASHINGTON

US Airways said Friday it won court approval of a reorganization plan that would allow the carrier to exit bankruptcy protection and merge with America West Airlines as early as Sept. 27.

The airline said in a statement that US Bankruptcy Judge Stephen Mitchell confirmed the plan at a hearing Friday that would end creditor protection and lead to the merger of creating the fifth-largest US airline.

Mitchell ruled all the creditor groups voted in favor by at least 90 percent in dollar amount and 80 percent in the number of votes cast.

Under the terms of the merger agreement, the transaction can close on the 11th day following entry of the court's final order confirming the plan, US Airways said.

As a result, US Airways would emerge from Chapter 11 bankruptcy and complete its merger with America West as soon as Sept. 27.

"This is a great day for both US Airways and America West," said Bruce Lakefield, president and chief executive of US Airways.

"For our customers, we are about to become the kind of airline that they have been asking for: a global carrier offering full-service amenities and simplified fares. For our employees, this merger will provide more stability and a chance to be a part of a vibrant new company."

The move came two days after bankruptcy filings by the third- and fourth-largest US carriers, Delta Air Lines and Northwest Airlines.

United Airlines meanwhile is seeking to emerge from bankruptcy protection early next year.

US Airways filed for bankruptcy in September last year less than 18 months after emerging from a earlier stint under creditor protection.

US Airways and its merger partner will have a new ownership structure with US$565 million in new equity investments.

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