=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/12/18/f= inancial2012EST0423.DTL ---------------------------------------------------------------------- Tuesday, December 18, 2001 (AP) Airline board asks America West for more concessions ROBERT GEHRKE, Associated Press Writer (12-18) 17:12 PST WASHINGTON (AP) -- America West Airlines has been told to get a second opinion on a $445 million loan before a government panel will back the loan. The Airline Stabilization Board requested that the company find an additional lender for its loan proposal before it considers the airline's request for a share of $10 billion in loan guarantees set up to help airlines rocked by the Sept. 11 hijackings. It is the second time the board has made additional requests of the airline, which has Sen. Jon Kyl, R-Ariz., concerned that the panel is merely setting up obstacles so it won't have to approve the loan for the cash-strapped Tempe, Ariz., company. "The board keeps raising the bar on them and they keep trying to respond, and I'm not sure if they can," said Kyl. "My concern is that this not be just a way of saying no without saying no." America West spokesman James Sabourin said the airline was exploring some "additional creative financing" at the board's request, but could not elaborate. A loan guarantee essentially makes the government a co-signer on the business' loan, agreeing to pay the debt if the company folds. In America West's case, the government would agree to repay $400 million of the $445 million loan. During debate on the bill, Kyl and others expressed concern that the boa= rd would be run like a bank, issuing the guarantees to the airlines that needed them the least because they are less of a risk. Kyl, his Arizona colleague, Sen. John McCain, and other senators have se= nt letters to the board reiterating that Congress intended every airline to have a shot at the funding. But the board has not complied, Kyl said. "They continue to impose more and more requirements that suggest to us that they're not really not trying comply with the intent," he said. Board spokeswoman Betsy Holahan said the board is working with America West "to ensure the company can make the best possible case to get a loan guarantee." On Dec. 11, America West filed an amended loan application that offered the government the option to buy 3.4 million shares -- 10 percent of the company's publicly traded stock -- at a set price. When it submitted its application, America West chairman Douglas Parker said the company expects to lose money next year but should return to profitability in 2003 and repay the loans by 2008. America West's latest application revisions may be submitted to the stabilization board by the end of the week. America West, the nation's ninth-largest air carrier, is generally regarded as one of the shakiest financially. However, Sabourin said the company's latest seven-year business plan shows that the company is viable. Holahan said the additional lender was suggested because "the board believes that it is prudent for lenders to have a common perspective in terms of risk." America West was the first airline to apply for the loan guarantees. Vanguard Airlines has also applied for the federal assistance. "We are still very hopeful that the board will issue a decision by the e= nd of the year," Sabourin said. In the weeks immediately following the terrorist attacks, America West w= as losing about $5 million a day. For the last several weeks, the losses have been about $1 million a day. The company lost $31.7 million in the third quarter of 2001, despite receiving $60 million in post-Sept. 11 government assistance. The company's stock closed at $2.67 a share on the New York Stock Exchange, up 13 cents on the day, but down dramatically from its high for the year of $14.19. America West Airlines: www.americawest.com =20 ---------------------------------------------------------------------- Copyright 2001 AP