US AIRWAYS, predicted by many to be the first American airline to actually fail in recent times appears to be saved following a merger with America West, itself not the most financially stable of carriers.
The two companies owe a combined $1bn to the Federal Air Transportation Stabilization Board, which provided government-backed loans to airlines in the aftermath of the industry crisis precipitated by the 2001 terror attacks.
America West chief executive W. Douglas Parker takes over the role of the combined company which will trade under the US Airways brand.
For the most part the two airlines provide complementary operations, US Airways mainly to the east and America West self-descriptive.
The transaction is expected to be funded with about $1.5bn in new capital including a sizeable amount from Airbus.
The airline expects $600m in cost savings through route restructuring and cost savings.
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