"US Airways reaches deal on financing"

Tuesday, October 12, 2004

US Airways reaches deal on financing
The Associated Press


ALEXANDRIA, Va. -- US Airways Group Inc. reached agreement with its lenders,
including the federal government, to conditionally extend a financing
arrangement that allows the company to operate while in bankruptcy.
  
The new deal extends until Jan. 15 an arrangement that allows the airline to
tap funds from a $900 million government-backed loan the airline received
when it emerged from its first trip into bankruptcy in March 2003.

The previous deal was to expire on Friday.

The extension is conditioned on a bankruptcy judge granting the airline's
request to temporarily cut the pay of its union workers by 23 percent, which
the company says is necessary to preserve its dwindling cash and avoid a
possible liquidation.

A hearing on the issue will resume Thursday after a judge heard testimony
all day Tuesday.

Daniel M. Kasper, a financial consultant with 25 years' experience working
in the airline industry, testified that the company's situation is so dire
that it "is looking over the precipice." He was hired by US Airways.


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