This article from NYTimes.com has been sent to you by psa188@juno.com. US Airways Files Reorganization Plan December 21, 2002 By REUTERS Filed at 10:38 a.m. ET WASHINGTON (Reuters) - US Airways Group Inc.plans to reduce annual costs by more $1.8 billion and hopes to emerge from bankruptcy protection next March under its reorganization plan, the airline said on Saturday. In a filing with the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria, the seventh-largest U.S. airline said its lead investor, Retirement Systems of Alabama, will maintain its $240 million, or 36 percent, equity stake. Retirement Systems of Alabama would have eight seats on a new 15-member US Airways board that will also have two new seats filled by labor representatives. The state pension fund is also providing US Airways with $500 million in emergency financing as it rebuilds under protection from its creditors. Previously, US Airways had said it was looking to trim $1.6 billion in yearly costs. The court is due to consider the plan on Jan. 16. The company stressed that its service would continue while its plan is considered by the court and creditors. US Airways filed for bankruptcy protection in August, its financial slide accelerated by the Sept. 11, 2001, hijack attacks on New York and Washington that has combined with a softer economy to curb air travel generally. UAL Corp.'s (UAL.N) United Airlines, the nation's No. 2 carrier, filed for Chapter 11 protection earlier this month and is planning to emerge in 18 months as a leaner carrier. US Airways said it continues with plans to maintain a fleet of 279 aircraft. Its subsidiaries and affiliated carriers will operate an increasing number of regional jets. ``As recently as this week, we have held high-level discussions with the airline's leadership and reiterated our commitment to the company,'' said RSA chief executive David Bronner. AIMS TO PRESERVE JOBS US Airways, its subsidiaries and affiliated carriers operate about 3,400 flights daily, about 1,000 fewer than it did in the middle of last year. It employs 33,000 workers, down 29 percent from mid-2001. But a spokesman said US Airways plans to preserve as many jobs has possible. One of the new labor seats on the airline's board will go to the Communications Workers of America and the other will be shared by the flight attendants and transportation workers. The pilots and mechanics already have full board representation. The company said it plans to explore options to resolve a pension funding liability estimated at $3.1 billion over the next seven years. The estimated value of common equity and warrants is between $425 million and $645 million. Retirement Systems of Alabama will be the lead stakeholder, with other shares going to unsecured creditors, labor, and management. The Air Line Pilots Association will get 19.3 percent. The airline has completed negotiations with its labor groups for concessions that will make up about half of the cost cuts, which are necessary to obtain a $900 in federal loan guarantees. The U.S. government would assume a 10 percent stake in exchange for the credit guarantees necessary for US Airways to obtain $1 billion in private financing. Other cost cuts have come from management, new terms with vendors and lessors, and other efficiencies. While giving few hard details on its restructuring strategy in its filing on Saturday, US Airways said it had put in motion plans to run a leaner operation. ``We have achieved unprecedented results on all fronts thus far, and are on track to reduce operating costs by more than $1.8 billion annually,'' said David Siegel, company president and chief executive. ``Our efforts will ensure that we emerge from Chapter 11 protection as a very efficient airline with competitive labor, fleet and operating costs,'' Siegel said. http://www.nytimes.com/reuters/business/business-airlines-usairways.html?ex=1041486106&ei=1&en=d3429a4bf04d6c00 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company