US Airways cuts deal to keep fleet intact

The deal allows the carrier to continue flying its planes.
LONG ISLAND NEWSDAY
US Airways believes that getting smaller will ultimately mean getting better.
The United States' seventh-largest carrier, which filed for bankruptcy protection in September -- its second such filing in the past two years -- said Thursday it has managed to save its fleet of airplanes, negotiating an 11th-hour deal with leasing companies to reduce payments and continue flying most of its planes.
The move will keep US Airways' fleet virtually intact -- far smaller than it had been before the Sept. 11 terrorist attacks, but that's the way the carrier, based in Arlington, Va., wants things.
"We consider ourselves a carrier that wants to be a low-cost carrier," said David Castelveter, a spokesman for the airline.
Castelveter said that it now costs the airline about 10 cents to fly one passenger one mile. "We need to get to 7 cents," he said. "If we get to 7, we'll be on the [high] end of" the costs of the low-cost carriers, "but we'll be in their ballpark."
JetBlue Airways of New York, one of the best-known of the low-cost carriers, says it pays 6.08 cents per seat per mile.
Struck a deal
US Airways had until Wednesday night to negotiate with leaseholders before they could repossess the planes. In late-night negotiations, the airline was able to strike a deal to reduce payments on virtually all of its leases. US Airways has 282 big jets, 67 regional airplanes and 64 turboprops.
The agreement covers all but 36 of US Airways' planes. The company said that alternate short-term plans are in place for 14 of those planes, and that it continues to negotiate the leases on 22 more.
Alan Tamm, president of Avicor, an airline consulting firm in Lake Oswego, Ore., called the agreements "a big step" for US Airways, which is attempting to emerge from bankruptcy. "They're bringing a large chunk of their costs under control, but the question is, is it enough?"
Before the terror attacks, US Airways had 418 big jets, compared with 282 now.
Dan Kasper, managing director of LECG Corp., an airline consulting firm in Cambridge, Mass., said US Airways is making progress, and has taken steps away from possibly having to liquidate its assets, as some analysts had predicted.
"I think that danger has abated somewhat," Kasper said. "But it certainly hasn't gone away."