ALEXANDRIA, Va. - US Airways Group Inc. asked a federal bankruptcy judge yesterday to extend by one month a deadline for filing its plan to come out of bankruptcy.
The seventh-largest U.S. airline expects to submit its recovery plan by the end of next month, and aims to complete its reorganization in the first quarter of 2003, the airline said in court papers.
An extension of the plan-filing deadline "will provide a sufficient buffer to further refine, if necessary, a business plan that will allow [US Airways] to compete in today's rapidly changing transportation industry," the company said in a filing with the U.S. Bankruptcy Court in Alexandria, Va.
The airline said creditors and investors may offer further input on the plan.
Companies reorganizing in bankruptcy face a 120-day deadline to come up with a recovery plan. If the so-called exclusive plan-filing period ends, creditors and shareholders can advance competing proposals, adding costs and potential delays.
Arlington, Va.-based US Airways filed for Chapter 11 protection in August after its losses worsened after the Sept. 11 attacks, the U.S. economy's slide into recession and the failure of a proposed sale to United Airlines parent UAL Corp.
US Airways asked U.S. Bankruptcy Judge Stephen Mitchell for a one-month extension of the plan deadline, which would give the company the sole right to file a proposal through Jan. 31. The deadline expires Dec. 31, and a hearing on the extension request is set for Dec. 12, according to the filing.
US Airways owes creditors more than $10.7 billion. In the first nine months of this year, the carrier posted losses of more than $850 million.
The company's plan to emerge from Chapter 11 is based on an equity investment from Alabama's state pension fund. Last week, US Airways said the Alabama fund was the only bidder in a court-supervised auction to invest in and fund the airline's reorganization.
The Retirement Systems of Alabama, led by David Bronner, offered $240 million for a 37.5 percent stake in the carrier. The Alabama fund is also providing $500 million in bankruptcy financing and holds about $340 million of bond debt related to US Airways' aircraft.
As part of the carrier's plan to restructure its debt and return to profitability, US Airways has shed more than 2,300 jobs and is trying to cut annual costs by as much as $1.6 billion.
US Airways' shares fell 7 cents yesterday to 55 cents in over-the-counter trading. They've fallen more than 90 percent in the past year.