US Airways agrees aircraft leasing, financing and servicing deal with GE

Airline Industry Information, Nov 26, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

Bankrupt carrier US Airways has agreed new aircraft leasing, financing and engine service deals with GE Capital Aviation Services (GECAS) and GE Engine Services (GEES) which will preserve the majority of US Airways' fleet owned by GECAS.

The deal provides US Airways with short-term liquidity, reduced debt, lower aircraft ownership cost with enhanced engine maintenance services and leases for new regional jets. The deal has yet to be approved by the US Bankruptcy Court but if it is approved the airline will gain USD140m in interim liquidity due to payment deferrals over the next six months and a new bridge facility.

US Airways is hoping that it will save USD80m a year through the new deal, with GECAS leasing it up to 31 new 70- and 90-seater regional jet aircraft over the next three years and the return of 10 Airbus A319s in 2005 and 15 Boeing 737-300s by 2007. In exchange for GECAS and GEES agreeing the new deal when US Airways emerges from bankruptcy it will issue GECAS a 15-year convertible note for between USD125m and USD216m.

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