This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx US Airways Restructuring Plan Is Approved March 19, 2003 By MICHELINE MAYNARD A United States Bankruptcy Court judge approved US Airways' restructuring plan yesterday, clearing the way for the airline to emerge from Chapter 11 protection by March 31. The judge, Stephen Mitchell, approved US Airways' plan after it received a strong endorsement from the airline's creditors' committee. Last week, the group voted in favor of the proposal. The judge's action came despite objections from US Airways' pilots, who were upset by the airline's bid to set aside their pension plan and replace it with a program that would pay up to 75 percent less in benefits. Judge Mitchell had ruled that US Airways could dissolve the plan but asked the two sides to negotiate a replacement. In a statement, US Airways' chief executive, David N. Siegel, said yesterday that the airline would try to resolve the dispute with the pilots and would meet with federal pension officials to discuss its proposed plan. Once US Airways emerged from bankruptcy, it would be able to draw on $900 million in loan guarantees from the federal Air Transportation Stabilization Board, which had given the airline provisional loan approval, pending its reorganization. The airline, based in Arlington, Va., will also be able to obtain $240 million in financing from its primarily lender, the Retirement Systems of Alabama, a pension fund. In that role, Retirement Systems had outbid an earlier contender for the airline, the Texas Pacific Group, an investment group led by David Bonderman. The pension fund, based in Montgomery, Ala., would have the largest stake in the airline, 36.6 percent. It would control 8 of 15 seats on the airline's board, and would have 70 percent voting control. Last week, it named a slate of directors including the pension fund's chief executive, David G. Bronner, and Rono Dutta, a former executive with United Airlines. US Airways' employees, who would hold 31.2 percent of the airline, would have 4 seats on its board. "This new injection of capital is essential," Mr. Siegel said, "so that we can ride out the impact of war and economic turbulence, and implement our new business plan." US Airways filed for bankruptcy protection on Aug. 11, when its air traffic, which is concentrated primarily on the East Coast, failed to rebound after the terrorist attacks on Sept. 11, 2001. Mr. Siegel, who joined US Airways a year ago, tried to stave off a bankruptcy filing through cutbacks and employee concessions. Under the restructuring plan, US Airways plans to save $1.8 billion a year through wage and benefit concessions granted by its employees; the greater use of efficient regional jets; a code-sharing agreement with United Airlines that it introduced in January, and other changes to its operations. US Airways has already enacted a wide-ranging series of cutbacks, including an end to giving out souvenir pilots' wings to young passengers. Yesterday, it said it would join other airlines in offering meals that passengers can purchase on its flights. It plans to charge $7 for breakfast and $10 for lunch and dinner. Officials hope the airline can break even in 2004, and return to profitability in 2005, assuming a modest improvement in the airline industry. The company has not reported a profit since 1999. http://www.nytimes.com/2003/03/19/business/19PENS.html?ex=1049103572&ei=1&en=d0351a7e8084cab1 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@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company