"US Airways, Pittsburgh close to resolving 'side' dispute"

Friday, July 18, 2003

US Airways, county close to resolving 'side' dispute
By Karen MacPherson
The Pittsburgh (PA) Post-Gazette


ALEXANDRIA, Va. -- A federal bankruptcy judge yesterday set a hearing for
next Friday on the legal dispute between US Airways and the Allegheny County
Airport Authority over the value of the leases and operating agreement the
airline rejected at Pittsburgh International Airport before exiting
bankruptcy.

But attorneys for both sides indicated to Judge Stephen Mitchell of the U.S.
Bankruptcy Court for the Eastern District of Virginia that the issue may end
up being resolved without the need for a full court hearing.

"We remain hopeful that there will be a global resolution of the overall
issue," said Eric Smith, an attorney for the Airport Authority.

At issue is US Airways' decision to value the worth of its Pittsburgh
International operating agreement at zero.

The authority maintains the value of the agreement, rejected hours before
the carrier emerged from bankruptcy in March, is $1.4 billion.

The dispute has been termed a "side show" by aviation industry analysts, who
say it will have little effect on the bigger issue: whether US Airways,
Pennsylvania and local officials can negotiate a financial package and
agreement that will keep a US Airways hub in Pittsburgh.

Today was supposed to have been the deadline for reaching such an agreement,
but both sides long ago dismissed the date's significance and yesterday said
they are continuing to work toward an accord and expect to hold meetings
sometime soon.


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