Create a free Manufacturing.net account to continue

US Airways Delays Delivery Of 54 Airbus Jets

Airline said it will postpone delivery of 54 Airbus planes until at least 2013 as it tries to bolster its financial strength.

TEMPE, Ariz. (AP) -- US Airways said Tuesday it will delay delivery of 54 Airbus jets until at least 2013 as it tries to bolster its financial strength.

The company said delaying the deliveries will reduce its aircraft capital expenditures over the next three years by $2.5 billion.

US Airways instead will take delivery of 28 planes over the next three years, which it called a more manageable pace during an airline industry slump. The carrier has financing in place for those 28 planes, including commitments for $275 million in loans for aircraft it will receive next year.

CEO Doug Parker said in a message to employees that the moves will boost the company's available cash by about $150 million this year and $450 million by the end of 2010.

Airline traffic has been weak this year, and several major U.S. carriers have raised cash to get through the slow fall and winter seasons.

US Airways, based in Tempe, Ariz., was scheduled to add the Airbus jets over the next three years to replace older jets in the airline's fleet.

Parker said the deferrals will let the company "maintain flexibility in a challenging economic environment." He said the company would keep its older jets until the new delivery dates, so the move won't significantly affect the airline's passenger-carrying capacity.

The company also said that Barclays, which provides US Airways' affinity credit card, eased financial terms of their agreement and will delay repayment of a $200 million advance for 14 months. Barclays advanced the money when it bought frequent-flier miles from the carrier.

US Airways lost $125 million in the first nine months of this year on lower revenue, after losing $2.1 billion last year.

"The past two years have been exceptionally difficult for our industry and US Airways," Parker told employees. He said the company was fortunate to have partners willing to help, but "we cannot continue to lose money indefinitely and fund our losses through financing and partner support."

Shares of US Airways rose 8 cents, or 2.6 percent, to $3.18 in morning trading.

More in Supply Chain