=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/2003/03/31/n= ational0556EST0500.DTL ---------------------------------------------------------------------- Monday, March 31, 2003 (AP) US Airways to emerge from bankruptcy amid unstable times for industry MATTHEW BARAKAT, AP Business Writer (03-31) 02:56 PST ARLINGTON, Va. (AP) -- US Airways is emerging from bankruptcy after just eight months, sooner than experts had expected considering the industry's instability in the midst of a war. As the airline tests whether its reorganization was sufficient, travelers won't see much difference, except for a planned increase in the use of regional jets over turboprop aircraft, US Airways spokesman Chris Chiames said. The airline will maintain its focus on the eastern United States, with a slightly expanded presence in the Caribbean. In its business plan, the nation's seventh-largest airline projects a profit of more than $100 million next year based on revenue growth of 13 percent, although the forecast was formulated before the Iraq war's start. The company has lost more than $3.8 billion over the last two years. US Airways has cut its annual costs by $1.9 billion, thanks mostly to employee wage and benefits concessions. However, the war already is hurting US Airways' business. The airline acknowledged that its bookings dropped 20 percent in the war's first week. The company anticipates higher fuel costs and lost revenue from the war will cost at least $360 million. During the weekend, US Airways told employees to expect a 5 percent wage cut because of the war, and said it plans to reduce capacity by 5 percent from its 279-jet fleet. Some analysts wondered if all that will be enough. "If I were them, I might want to stay in bankruptcy a little while longer," said Thomas Boland, an industry expert who is managing director of Greenwich, Conn.-based Seneca Financial Group. "Look at what happened in the Gulf War. Airline revenue dropped 8 percent and took a year to recover in a better economic scenario than we have today." US Airways does not have the luxury of waiting. The critical piece of its restructuring plan is a $900 million federally guaranteed loan it receives only after leaving bankruptcy. On Friday, the New York Stock Exchange announced that it would stop trading in United Airlines parent UAL Corp. because that bankrupt carrier's stock had fallen below $1 a share for a 30-day period. United said the move would have no effect on customers or operations. United lost $3.2 billion last year and made the largest bankruptcy filing in aviation history on Dec. 9. United is seeking $2.56 billion in annual labor savings through 2008 and has asked bankruptcy court to void all its labor contracts if no long-term agreements are in place by May 1. On the Net: US Airways: www.usairways.com/ =20 ---------------------------------------------------------------------- Copyright 2003 AP