US Gov't is now in the airline bussness

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Govt says America West deal requires 33 pct of stock
Friday December 28, 9:05 PM EST

NEW YORK, Dec 28 (Reuters) - The Bush administration on Friday granted $380 million in loan guarantees to America West Airlines as part of a $15-billion industry bailout program, but called for more stringent conditions for its approval.

The decision by the Air Transportation Stabilization Board calls for the government to receive warrants for about 33 percent of America West's common stock as one of the conditions for approval, officials said. America West had offered the government about a 10 percent stake in its application.

America West said the government had also called for further control of its labor costs. The airline said that it would work with the government to match those conditions.

Major U.S. airlines said they needed the $5 billion in cash aid and $10 billion in loan guarantees to offset the financial impact of the attacks on the United States.

Experts believe U.S. carriers could report about $9 billion in annual losses at the end of this year. America West, a unit of America West Holdings (AWA), has been losing about $1 million to $2 million a day.


Roger La France
EWR
CO767 or ewrgateman on IAM

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