US Air bankruptcy puts onus on regional fleet

 - May 5, 2008, 6:49 AM

US Airways’ decision to file for Chapter 11 bankruptcy last month officially placed the courts at the center of a restructuring exercise in which the development of the airline’s regional network has emerged as perhaps the most crucial component.

Filed August 11 on behalf of US Airways and its four regional airline subsidiaries in U.S. Bankruptcy Court for the Eastern District of Virginia, the petition “will allow US Airways to effect cost savings from aircraft lessors and financiers and other key stakeholders as a means of ensuring the company’s return to profitability,” said a company spokesperson. How the move affects the company’s ability to institute plans for its regional airline businesses remains unclear, although it will certainly delay the opening of its new MidAtlantic Airways subsidiary until at least next year’s first quarter.

US Airways said it decided to file for Chapter 11 in part because of its failure to reach agreements with vendors to revise payment terms, and with lessors and financiers to reject surplus aircraft leases and return excess airplanes “within a timeframe necessary to complete an out-of-court restructuring.”

The airline spokesperson insisted the decision to file for Chapter 11 in