=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/2001/12/30/f= inancial1201EST0001.DTL ---------------------------------------------------------------------- Sunday, December 30, 2001 (AP) America West at critical point (12-30) 09:01 PST PHOENIX (AP) -- America West stands at its most critical turning point since 1991, when = it sought bankruptcy protection. The Tempe-based airline received conditional approval Friday for $380 million in loan guarantees under a $10 billion package passed by Congress after the Sept. 11 terrorists attacks. The airline is the nation's eighth-largest, but it is widely regarded as the weakest financially. The cash-strapped carrier was on the brink of bankruptcy until it received approval for the loan guarantees. Still, its passenger loads have outpaced the rest of the industry since the attacks, and its on-time performance vastly improved over the past year. Company executives and some analysts remain optimistic about America West's survival. "They are going to be operating in a tougher airline environment, but th= ey have improved their operations; they've reduced their costs; and they have a turnaround plan," said Ray Neidl, an airline analyst with ABM AMRO in New York. "They deserve a chance to prove they can make it on their own." Despite the airline's problems, most analysts believe it would have been fine were it not for the attacks and the resulting blow to air travel. A $200 million loan America West negotiated before the hijackings fell apart after Sept. 11. The company was forced to lay off 2,000 employees. "It was in a sticky situation before this all happened because the econo= my was going into a recession, and air travel was declining. But so were the other airlines," said Michael Boyd, a Colorado airline consultant. "It's just that America West was closer to the line. It's just a cash issue." Since Sept. 11, it has improved over last year in on-time arrival, number of lost bags and consumer complaints and passenger loads. In recent years, America West has been plagued by labor disputes. Its pilots, the lowest paid among major carriers, have been working without a new contract since January 2000. The airline also suffered from maintenance and on-time problems that soured business and leisure travelers and resulted in federal fines. Concern lingers that America West still has not put the issues to rest a= nd righted itself enough to survive, even with the guarantees. To obtain the guarantees, America West and its creditors have to make so= me tough concessions. The company has canceled pay raises and bonuses. The government also asked for a 33 percent equity stake in the company a= nd a pledge that America West will hold down labor costs until the agreement ends in 2007. =20 ---------------------------------------------------------------------- Copyright 2001 AP