Sir James

US Airways, America West Seek $500 Million

United Press International

Possible merger partners US Airways Group Inc. and America West Holdings Corp., are seeking a capital infusion of $500 million to cement the deal.

Sources involved in the negotiations told the Wall Street Journal much is needed to fund Arlington, Va.-based US Airways' exit from Chapter 11 and union with America West, of Tempe, Ariz.

The airlines have been in discussions for about a month, and both are struggling with high fuel costs and tight fare pricing.

General Electric Co., the largest creditor to both carriers, had originally asked US Airways to file a plan of reorganization with the U.S. Bankruptcy Court by the end of April. Friday, GE announced the deadline, already postponed three times, had been extended again for an undisclosed period in light of the merger talks.

The merger would knit together US Airways' extensive east coast operations with America West's west coast flights under US Airways' brand.

WatchThis!

I cringe to think what would happen to USAir should the funding or the DOT/DOJ approval not come through (this time). I think every employee at USAir has been through enough, for their sake - I hope this is the answer and that it all works for them.

cactusmike

Naturally, this has been a huge topic of discussion here. We sacked our MEC chairman this weekend because we wanted a more hardline MEC. We are assuming the merger will go through because of the management egos involved. Evidently they want Parker, our CEO to run the show. I would say that if TPG (David Bonderman) wants this to go then that is where the 500 million will come from.