US Airways Plan of Reorganization Receives U.S. Bankruptcy Court Approval Company on Track to Emerge from Chapter 11 and Complete Merger

With America West Airlines as Early as Sept. 27, 2005

    ARLINGTON, Va., Sept. 16 /PRNewswire-FirstCall/ -- US Airways is now in
 the final stages of completing its transformation into the nation's first
 full-service, low-cost airline with today's judicial confirmation of its
 Chapter 11 Plan of Reorganization (POR).
     Judge Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern
 District of Virginia confirmed the plan at a hearing today, clearing the way
 for the US Airways-America West Airlines merger transaction to formally close
 by the end of September.  The merger will create the nation's fifth-largest
 airline, and provide consumers with new domestic and international travel
 choices and an extensive route network throughout the U.S., Canada, the
 Caribbean, Latin America, and Europe.
     Judge Mitchell ruled that all necessary requirements have been met for US
 Airways to implement its POR.  Every class of creditor for all five debtors --
 US Airways Group, Inc., US Airways, Inc., PSA Airlines, Inc., Piedmont
 Airlines, Inc., and Material Services Company, Inc. -- in the Chapter 11 cases
 that was entitled to vote on the POR, voted in favor by at least 90 percent in
 dollar amount and 80 percent in the number of votes cast.  Under the terms of
 the merger agreement, the transaction can close on the 11th day following
 entry of the court's final order confirming the plan.  US Airways then will
 emerge from Chapter 11 and complete its merger with America West as soon as
 Sept. 27, 2005.
     "This is a great day for both US Airways and America West," said US
 Airways President and Chief Executive Officer Bruce R. Lakefield.  "For our
 customers, we are about to become the kind of airline that they have been
 asking for -- a global carrier offering full-service amenities and simplified
 fares.  For our employees, this merger will provide more stability and a
 chance to be a part of a vibrant new company.
     "Through our restructuring, we have reduced our debt, improved our
 liquidity and strengthened our balance sheet," Lakefield said.  "With the
 financial position of other carriers deteriorating, we are pleased that we
 will have a very strong cash position, a robust business plan, a low cost
 structure, and a strong network that offers our customers an attractive
 product and more choices."
      Key elements of the plan include:
     * Total equity and liquidity agreements to provide the merged airline with
       unrestricted cash of approximately $1.7 billion, and a total cash
       position of approximately $2.5 billion, including approximately $800
       million of restricted cash.
     * Investment agreements that total $565 million in new equity and a public
       stock offering that is expected to raise $150 million.  Support from
       business partners and suppliers that will provide in excess of $700
       million in cash, and asset sales and sale-leaseback agreements that are
       expected to gross $300 million pending consummation of certain of the
     * Agreement between US Airways and the Pension Benefit Guaranty Corp.
       (PBGC), resolving nearly $2.7 billion in claims.  The agreement provides
       for US Airways to pay the PBGC $13.5 million in cash, in addition to
       giving the PBGC a $10 million note and 70 percent of the common stock,
       which will be allocated to unsecured creditors.
     * The creation of a company with more than $10 billion in annual revenues
       and savings of over $600 million annually through synergies associated
       with the merger.
     * Reinstatement and extension of the Air Transportation Stabilization
       Board (ATSB) loans with amortization through 2010.
     Lakefield said that the company's full attention now will be on the
 completion of the merger, the implementation of consistent customer service
 offerings, the building of a unified corporate culture, and the transfer of
 headquarters functions to Tempe, Ariz.  America West Chairman, President, and
 Chief Executive Officer Doug Parker will assume those same responsibilities at
 the merged company, with Lakefield serving as non-executive vice chairman of
 the board of directors.
     "Doug Parker and the management team he has assembled are enthusiastically
 working to make sure that the new US Airways is an airline that offers
 customer value, and one which our combined work force is proud to represent.
 I want to express my heartfelt thanks to our employees, customers, and
 business partners for their support of the company throughout this
 restructuring.  Doug is committed to building upon that deep level of support
 and loyalty," Lakefield said.
     Lakefield also expressed his appreciation to the ATSB for its support in
 working through a number of issues related to the America West and US Airways
 federal loan guarantees.
     US Airways Group, Inc. and its domestic subsidiaries filed voluntary
 petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on
 Sept. 12, 2004.
     The merger of US Airways and America West will create the first full-
 service, low-cost nationwide airline with amenities that include international
 scope, a broad frequent flyer program, airport clubs, assigned seating and
 First Class cabin service.  The airlines have already introduced the new US
 Airways aircraft livery design, and over the coming weeks, will be announcing
 more specific customer service enhancements and policies as the airlines
 implement the merger.
     US Airways is the nation's seventh-largest airline, serving 183
 communities in the U.S., Canada, Europe, the Caribbean and Latin America.  US
 Airways, US Airways Shuttle and the US Airways Express partner carriers
 operate approximately 3,200 flights per day.
     America West operates over 900 flights daily to more than 90 destinations
 in the U.S., Canada, Mexico and Costa Rica.  America West offers a range of
 services including more destinations than any other low-cost carrier, First
 Class cabins, assigned seating, airport clubs and an award-winning frequent
 flyer program.
     Certain of the statements contained herein should be considered "forward-
 looking statements" within the meaning of the Private Securities Litigation
 Reform Act of 1995, which reflect the current views of US Airways Group with
 respect to current events and financial performance. You can identify these
 statements by forward-looking words such as "may," "will," "expect," "intend,"
 "anticipate," "believe," "estimate," "plan," "could," "should," and "continue"
 or similar words. These forward-looking statements may also use different
 phrases. Such forward-looking statements are and will be, as the case may be,
 subject to many risks, uncertainties and factors relating to the company's
 operations and business environment which may cause the actual results of the
 company to be materially different from any future results, express or
 implied, by such forward-looking statements. Factors that could cause actual
 results to differ materially from these forward-looking statements include,
 but are not limited to, the following: the ability of the company to continue
 as a going concern; the ability of the company to obtain and maintain any
 necessary financing for operations and other purposes; the ability of the
 company to maintain adequate liquidity; the ability of the company to absorb
 escalating fuel costs; the company's ability to obtain court approval with
 respect to motions in the Chapter 11 proceedings prosecuted by it from time to
 time; the ability of the company to consummate its plan of reorganization with
 respect to the Chapter 11 proceedings and to consummate all of the
 transactions contemplated by the plan of reorganization or upon which
 consummation of the plan is be conditioned; the ability of the company to
 obtain and maintain normal terms with vendors and service providers; the
 company's ability to maintain contracts that are critical to its operations;
 the potential adverse impact of the Chapter 11 proceedings on the company's
 liquidity or results of operations; the ability of the company to operate
 pursuant to the terms of its financing facilities (particularly the financial
 covenants); the ability of the company to fund and execute its business plan
 during the Chapter 11 proceedings and in the context of its plan of
 reorganization and thereafter; the ability of the company to attract, motivate
 and/or retain key executives and associates; the ability of the company to
 attract and retain customers; the ability of the company to maintain
 satisfactory labor relations; demand for transportation in the markets in
 which the company operates; economic conditions; labor costs; financing
 availability and costs; security-related and insurance costs; competitive
 pressures on pricing (particularly from lower-cost competitors) and on demand
 (particularly from low-cost carriers and multi-carrier alliances); weather
 conditions; government legislation and regulation; impact of the continued
 military activities in Iraq; other acts of war or terrorism; and other risks
 and uncertainties listed from time to time in the company's reports to the
 SEC. There may be other factors not identified above of which the company is
 not currently aware that may affect matters discussed in the forward-looking
 statements, and may also cause actual results to differ materially from those
 discussed. The company assumes no obligation to update such estimates to
 reflect actual results, changes in assumptions or changes in other factors
 affecting such estimates other than as required by law. Similarly, these and
 other factors, including the terms of the plan of reorganization as
 consummated, can affect the value of the company's various liabilities, common
 stock, and/or other equity securities. Accordingly, the company urges that the
 appropriate caution be exercised with respect to existing and future
 investments in any of these liabilities and/or securities.
     In connection with the proposed merger transaction, US Airways Group has
 filed a Registration Statement on Form S-4 (Registration No. 333-126162),
 which includes a proxy statement of America West Holdings, and other documents
 with the Securities and Exchange Commission.  The proxy statement/prospectus
 was mailed to stockholders of America West Holdings after the registration
 statement was declared effective by the SEC on August 11, 2005.  WE URGE
 INFORMATION ABOUT THE PROPOSED TRANSACTION.  Investors may obtain free copies
 of the registration statement and proxy statement/prospectus as well as other
 filed documents containing information about US Airways Group and America West
 Holdings at, the SEC's Web site.  Free copies of America
 West Holdings' SEC filings are also available on America West Holdings' Web
 site at, or by request to
 Investor Relations, America West Holdings Corporation, 111 West Rio Salado
 Pkwy, Tempe, Arizona 85281. Free copies of US Airways Group's SEC filings are
 also available on US Airways Group's Web site at or by request to Investor Relations,
 US Airways Group, Inc., 2345 Crystal Drive, Arlington, VA 22227.
     This communication shall not constitute an offer to sell or the
 solicitation of an offer to buy any securities, nor shall there be any sale of
 securities in any jurisdiction in which such offer, solicitation or sale would
 be unlawful prior to registration or qualification under the securities laws
 of any such jurisdiction.  No offering of securities shall be made except by
 means of a prospectus meeting the requirements of Section 10 of the Securities
 Act of 1933, as amended.
     America West Holdings, US Airways Group and their respective executive
 officers and directors may be deemed, under SEC rules, to be participants in
 the solicitation of proxies from America West Holdings' stockholders with
 respect to the proposed transaction.  Information regarding the officers and
 directors of America West Holdings is included in its definitive proxy
 statement for its 2005 Annual Meeting filed with the SEC on April 15, 2005.
 Information regarding the officers and directors of US Airways Group is
 included in its 2004 Annual Report filed with the SEC on Form 10-K on March 1,
 2005.  More detailed information regarding the identity of potential
 participants, and their interests in the solicitation, is set forth in the
 registration statement and proxy statement and other materials filed with the
 SEC in connection with the proposed transaction.


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.


PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.