"U.S. Airways debt to Hilton Head airport up in the air"

Sunday, July 3, 2005

Airline's debt to Hilton Head airport up in the air
BY TIM DONNELLY
The Hilton Head (SC) Island Packet


U.S. Airways still owes the Hilton Head Island Airport $76,000 in unpaid
fees stemming from the airline's bankruptcy last year, but the airport may
receive only a small portion of it.

Beaufort County, which owns the two county airports, essentially has written
off the money for the time being as the airline works to get out of
bankruptcy and attempts to repay its debts, officials said.

According to the airline's reorganization plan, which was filed Thursday,
the island airport and other entities owed more than $50,000 each could
receive $5,000 or shares of stock in the company it is creating in a merger
with America West.

The money owed is part of regular airport charges, such as landing fees and
lease agreements, said U.S. Airways spokesman David Castelveter. Piedmont
Airlines, a subsidiary of U.S. Airways -- which declared bankruptcy Sept. 12
-- operates passenger flight service out of the island airport as U.S.
Airways Express.

A bankruptcy judge is scheduled to consider whether to approve the plan Aug.
9. Until then, the money owed to Hilton Head airport is up in the air.

"That's resolved through the court," Castelveter said. "I don't know how
this shakes out for the Hilton Head airport. There's a lot in this plan of
organization."

The company announced plans last month to merge with America West to form a
low-cost airline. No changes to the island's service have been discussed
publicly.

County Councilman Peter Lamb, chairman of the council's Public Services
Committee, which oversees the airport, said last week's Finance Committee
meeting was the first time most of the council learned how much money was
owed to the airport. But he said the news was not a surprise.

"Everybody understood what the impact of U.S. Air(ways') going bankrupt was
on the cash flow of the airport," he said.

County finance director Tom Henrikson said the debt has been taken out of
the equation when figuring out the airport's finances.

"We had set up an allowance if we did not receive it," he said.

This fiscal year, the county has budgeted $1.13 million in revenue at the
airport.

Lamb said he did not think the airport, a self-sustaining facility, is in
any financial trouble, even if the debt remains uncollected.

"No one knows the answer to any question until the (reorganization) plan is
accepted," he said. "When the plan is accepted, then you can go back and do
the mathematics. At the moment, it's just wait and see."

Castelveter said a time frame for when the airport could receive
compensation ultimately will be up to the court.

"It would be premature right now to wander that far," he said. "The first
and next step would be for the court to approve it."


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