Wasn't US Airways also one that said a couple of months ago bankruptcy wasn't in their plans? Walter DCA ----- Original Message ----- From: "Bill Hough" <psa188@juno.com> To: <AIRLINE@LISTSERV.CUNY.EDU> > (06-02) 16:18 PDT WASHINGTON (AP) -- > US Airways and its supporters are battling congressional efforts to > curtail the $10 billion in emergency airline loans that Congress approved > just after Sept. 11, warning that squeezing the bailout program could > force the company into bankruptcy. > The airline and lawmakers friendly to its cause are in an uphill battle > against holding up the loans for even a few months. The delay would help > to pay for add-ons to the $27.1 billion President Bush wants in new > emergency spending for the military and homeland security. > The fight has contributed to slow progress on legislation paying for the > battle against terrorism, because the House and Senate versions of those > bills contain provisions restricting the loans. > US Airways, still among the nation's 10 largest airlines despite severe > post-Sept. 11 pressure, has been preparing to seek a federally backed loan > of about $1 billion from the program. Airline officials maintain that > waiting until Oct. 1, when the government's new fiscal year begins and the > loan guarantees would become available again, will be too late. > Congress and Bush created the loans -- along with a separate $5 billion = > in > grants -- to help airlines weather the drop in travel after the terrorist > attacks. > "We'll have to consider reorganizing under the bankruptcy laws" without > the government-backed loans, said US Airways spokesman David Castelveter. > "When you do that, jobs are at stake." > US Airways tried to stave off the loan restrictions, with lobbying by top > executives and Capitol Hill visits by some employees in May. The airline > had also contributed nearly $167,000 to congressional candidates in 2001 > and early 2002, the sixth most of any airline, according to records > compiled by the Center for Responsive Politics, a private group that > monitors political contributions. > Even so, the airline struck out twice, both with the House and with the > Senate Appropriations Committee. > The $29 billion-plus counterterrorism bill that the House passed on May = > 24 > included language forbidding any new federally guaranteed loans to ailing > airlines until Oct. 1. US Airways says it needs a cash infusion by August. > The Senate committee has a similar provision -- plus a permanent cut in > the loan program's size to $4 billion -- in its $31 billion anti-terror > legislation. Senators planned to begin debating that bill Monday when they > return from their Memorial Day recess. The fight over the loans could be > time consuming. > "This bill is not ready for passage," Sen. Rick Santorum, R-Pa., whose > state has US Airways hubs in Philadelphia and Pittsburgh, warned before > Congress' break. "There are serious changes that must be made in this > legislation for this bill to go through the Senate." > With intense opposition from lawmakers from areas where the airline has > major operations -- mostly in the East -- congressional aides say > privately that the provision could well end up being dropped. > But it will not be easy. > The measure was included to help reduce the terrorism legislation's > overall cost, as demanded by both Bush and GOP conservatives. The Senate > claims $393 million in savings from the provision, the House $1.3 billion. > Removing the language probably would mean savings must be found elsewher= > e, > which is never simple. > In an indication of how badly House GOP leaders needed to keep the savin= > gs > in the bill, Virginia GOP Reps. Tom Davis and Frank Wolf both voted for > the bill, but only after stating they had been told the problem will be > resolved. > Both of their districts are home to numerous employees at Ronald Reagan > National Airport, where US Airways has its headquarters. > Critics argue that the airline was troubled before the attacks. It > reported losses of $269 million in this year's first quarter and $1.17 > billion in 2001, and $269 million in all of 2000 as well. > Citing the airline's problems and noting it has yet to apply for the > federally backed loan, Rep. James Walsh, R-N.Y., said during the House > debate, "It is no surprise that an airline this poorly managed would not > have their paperwork done." > The deadline for applying for the loans is June 28. > US Airways officials say they have not applied because they must first > complete a financial plan calling for up to $1.3 billion in annual savings > -- including about $950 million in concessions from the pilots, flight > attendants and other unions. Those talks continue. > America West has received a $429 million federally backed loan, the only > one so far under the program. Many airlines are reluctant to seek the > loans because conditions include giving the government an option to > purchase part of the company. > > =20 > ---------------------------------------------------------------------- > Copyright 2002 AP