US Airways weighs $300M in offers


Well-Known Member
Well, here go the pieces of US Air, if this story turns out to be true:

US Airways weighs $300M in offers

By Thomas Olson
Friday, January 30, 2004

Financially troubled US Airways is considering $300 million in offers for unidentified assets the struggling carrier is shopping around.
The airline is using investment banker Morgan Stanley to solicit bids for such properties as the lucrative East Coast shuttle, US Airways Express subsidiaries and gate space at New York's LaGuardia and Boston's Logan airports.

"If that $300 million is correct, it's probably $150 million for the shuttle and another $150 million for their express partners," said Robert Mann Jr., head of R.W. Mann & Co. Inc., an airline consultancy based on Long Island, N.Y.

US Airways spokesman David Castelveter declined to comment about any offers or assets that might be sold.


Staff member
The rest of the story:

"Morgan Stanley is trying to identify the assets, place values on those assets and determine if there are potential buyers," he said.

Other US Airways assets on the block could include gates at US Airways hubs at Pittsburgh International as well at airports in Philadelphia and Charlotte, N.C. But such a sale in Pittsburgh seems unlikely because the airline had slashed its long-term gate leases to 10 from 50 on Jan. 5, analysts say.

US Airways needs money so that it won't default on $900 million in government-backed loans. The U.S. Air Transportation Stabilization Board says the airline must have a cash cushion of at least $1 billion on June 30. Otherwise, the agency could demand loan payments sooner than October, the current deadline for the first payment.

The airline had about $1.3 billion in cash last Sept. 30 -- the latest figure available. But the fall and winter quarters generally are the industry's weakest months to build cash, said airline consultant Mann.

The East Coast shuttle is a desirable asset because the operation flies mostly higher-paying business travelers between New York City, Boston and Washington, D.C.

US Airways owns three of its 10 express-airline partners -- Allegheny, Piedmont and PSA airlines. Two weeks ago, US Airways said it would merge Harrisburg-based Allegheny into Salisbury, Md.-based Piedmont by March 31.

"They seemed like they were preparing for a sale with the consolidation of Allegheny into Piedmont," Mann said.

Several airlines have shown interest or have made offers. They include the parent companies of American Airlines, Delta Air Lines, AirTran Airways, Mesa Airlines and JetBlue Airways.

American Airlines spokesman Tim Wagner said the airline, the nation's largest, "is weighing all our options." But he termed "speculation" that American has bid on the US Airways shuttle or any of the struggling airline's other assets.

American Airlines, based in Fort Worth, Texas, offered to buy the East Coast shuttle in 1997 for $300 million.

"We would prefer there was no need for an asset sale and that US Airways would operate profitably," said Jonathan Ornstein, chairman of Mesa Airlines of Phoenix; the carrier is a US Airways Express partner. "But if that's not the case, we'd take a look at what's available."

Spokespeople for JetBlue and for Delta declined comment. AirTran's spokesman could not be reached.

"I think it's interesting that among the (bidders) are two low-cost carriers," said Mann, referring to JetBlue and AirTran. "That tells you they have some money and are trying to move in on legacy carriers."