America West Airlines and US Airways yesterday said the U.S. Department of Justice completed its review of the companies' proposed merger and that they "remain on track" to close the deal by early fall and relaunch the US Airways brand. On the international scene, the proposed merger between Lufthansa and Swiss International Air Lines still is under preliminary review by the European Commission, though Lufthansa yesterday announced a new holding company had secured nearly all of the Swiss share capital following the close of an initial public offer. Meanwhile, the comment period for a six-carrier joint application to the U.S. Department of Transportation requesting antitrust immunity across the SkyTeam alliance is set to expire today.
Announced last month
(BTN, June 6), the AWA-US Airways merger still needs approval from AWA shareholders, US Airways creditors, the U.S. Bankruptcy Court overseeing US Airways' restructuring, the Securities and Exchange Commission, DOT and the Air Transportation Stabilization Board. In the interim, a steering committee of four executives from each carrier will develop detailed merger plans.
US Airways also had a busy day Thursday in bankruptcy court, receiving approval for both a revised financing agreement with General Electric Co., a top financial backer, and for continued access to cash collateral from its ATSB loan
(BTN, Jan. 17). US Airways also requested an extension of the exclusivity period during which it can file a reorganization plan. The company now targets Aug. 31 as the deadline for filing the plan and Oct. 31 as the deadline for securing acceptance of the plan.
US Airways also confirmed plans to sell and lease regional jets and airport slots to Republic Airways Holdings for $100 million
(BTNonline, March 15), which bolsters its liquidity as it works to complete bankruptcy proceedings and cement the AWA merger. The RJs and slot assets in question--as many as 28 Embrarer aircraft and 137 commuter slots at Reagan Washington National and New York LaGuardia airports--would continue operating under the US Airways Express brand.
The proposed Lufthansa and Swiss International Air Lines merger also took a small step forward yesterday when Lufthansa said it had secured 98.7 of Swiss share capital through Air Trust, a holding company created as part of the merger transaction
(BTN, April 18).
"Air Trust now holds more than the minimum number of Swiss shares required to initiate a 'squeeze-out' procedure to obtain the remaining shares," Lufthansa said in a statement. "Thus, once Lufthansa's acquisition of Swiss has been approved by the E.U. competition authorities and the public purchase offer has been completed, Air Trust will effect this squeeze-out against a cash compensation to acquire the remaining publicly held Swiss shares."
Meanwhile, SkyTeam members Air France, Alitalia, Czech, Delta, KLM Royal Dutch and Northwest airlines continue to await a decision from DOT on their request for an immunized alliance. The comment period regarding their application, first submitted last September
(BTN, Sept. 20, 2004), is due to end today. DOT's review of this issue will continue into July.
The Business Travel Coalition yesterday stated its support for SkyTeam's application, suggesting it would improve airline alliance competition by "providing pricing discipline over the long term" and prod European Union regulators to improve market access as part of liberalized commercial air transport between the E.U. and United States.
Four SkyTeam members--Delta, Air France, Alitalia and Czech Airlines--secured antitrust immunity in January 2002. Northwest and KLM, along with mutual partner Continental Airlines, officially joined SkyTeam last fall.
In other alliance news, sister carriers Virgin Atlantic and Australia's Virgin Blue on July 17 plan to begin sharing codes. The cooperation would allow passengers to book and more easily connect between Virgin Atlantic's London-Hong Kong-Sydney services and Virgin Blue flights to five domestic Australian destinations.
The carriers said code sharing is made possible by links from Virgin Blue's Navitaire Open Skies reservations system and Virgin Atlantic's "more complex, traditional" reservations system.