US Airways Asks to Skip Pension Payment

Reuters via Excite ^ | September 13, 2004 | John Crawley and Jeremy Pelofsky

[PAR35]

ALEXANDRIA, Va. (Reuters) - US Airways Group Inc. (UAIR) told a bankruptcy court on Monday it would skip a $110 million pension payment due Wednesday as it looks to slash costs and avoid liquidation after filing for protection from its creditors over the weekend.

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The company, which negotiated new relief from the loan board, still owes more than $700 million to the government.

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Pension fund Retirement Systems of Alabama, which invested $240 million during the last bankruptcy, owns 36 percent of US Airways. The pilots' union, the Air Line Pilots Association, holds a 19 percent stake.

The U.S. government, through its loan guarantee, holds 10 percent. General Electric Co. (GE), a supplier of regional jet financing, owns 5 percent.

[PAR35]

USAir is unlikely to survive. The taxpayers are on the hook for over a Billion, and the good folks in Alabama will probably take a quarter of a billion $ hit to make up the hole that will be left in their retirement funds.

[Eric in the Ozarks]

Hard to believe anyone would hold any airline stocks with petroleum running rampant.

[PAR35]

Hard to believe anyone would hold any airline stocks with petroleum running rampant.

The smart ones hedged. Even American, which had to unwind its hedges to free up some cash to avoid bankruptcy, has managed to hedge a portion of its needs.

Southwest has done fairly well thus far, as have some of the others.

[A Balrog of Morgoth]

I haven't been very fond of USAir since they bought out Piedmont. Flying Piedmont was always a pleasure. Having to fly USair on the same routes sucked out loud.

[PAR35]

Flying Piedmont was always a pleasure.

Riding a Martin 404 or an F-27 through the mountains on a cold, stormy night could be something other than a pleasure. They had air sikness bags for a reason. They did have nice folks, as did Southern, but so did Delta in those days. Too bad they all got yankeefied.