Briefs

It appears that a bankruptcy filing for US Airways [USAIR] may be closer than most had estimated. An assessment commissioned by the pilots union predicts that the carrier will file bankruptcy papers by mid-September if it does not get $800 million in labor concessions. Most had estimated that the carrier had...

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• It appears that a bankruptcy filing for US Airways [USAIR] may be closer than most had estimated. An assessment commissioned by the pilots union predicts that the carrier will file bankruptcy papers by mid-September if it does not get $800 million in labor concessions. Most had estimated that the carrier had until Sept. 30 to prove it was not in default on a number of loans (CRAN, Aug. 2). The carrier in a cost-cutting move has followed through on its plans to downsize its Pittsburgh operations. US Airways will end service to 20 locations - four foreign and 16 U.S. locations. Except for flights by the mainline carrier to London and Frankfurt, US Airways Express carriers have flown all the other routes. There may be additional routes canceled by code-share partners when the November schedule is finalized in early September. US Airways will continue to provide service to more than 50 markets and will remain the largest carrier in Pittsburgh.
• US Airways' PSA Airlines will fly the Embraer [ERJ] 170 now that its pilots have reached an agreement with the carrier. The pilots, members of the Air Line Pilots Association, have agreed to participate in US Airways' Jets for Jobs program. In the program, half of the pilot positions for the Embraer aircraft will be awarded to furloughed US Airways pilots and the PSA pilots will fill the remaining slots. PSA currently flies 26 50-seat Bombardier [BBD] CRJ 200s and four 70-seat CRJ 700s. US Airways has 85 Embraer 170s on order. To date, US Airways has assigned the new plane only to its MidAtlantic Airlines unit. PSA is scheduled to retire its eight Dornier 328 turboprops in September.
• Brazil's Embraer is part of a team lead by Lockheed Martin [LMT] that recently won an $879 million U.S. Army contract to build battlefield surveillance planes. Embraer's ERJ 145 will be the base platform for this next-generation airborne surveillance system. The initial contract calls for five outfitted planes to be delivered in 2006 for testing. The planes will be assembled in Jacksonville, Fla. A low-run production contract is possible in 2007 if the initial tests are a success. A full, 20- year production contract could be awarded in 2009 valued at $7 billion. Embraer has already built more than 800 planes based on the ERJ 145 platform for both civilian and military purposes.
• Acting as the lender of last resorts, the Canadian government has provided three U.S. regional airlines with loans to buy Bombardier aircraft. The loans are the first from a $900 million account established last year in the wake of a financing dispute with Brazil and its support of the Embraer jet. The announcement from the Canadian government did not provide details on the number or type of planes to be purchased. Each carrier is in the midst of an ongoing fleet expansion. Neither did the announcement provide the specific loan amounts, but instead listed a range for the loan values. Delta Air Lines' [DAL] Comair received the largest loan: $76 million to $187.9 million. SkyWest [SKYW] obtained a loan, which ranged from $37.5 million to $75 million. Horizon Air, a unit of Alaska Air Group [ALL], received a loan, which ranged from $3.7 million to $11.2 million.
• All Nippon Airways [ALNPY] has placed an order for two more Bombardier Q400 turboprops. Once the order is filled, All Nippon will have 14 Q400s in its fleet. The Japanese carrier placed its first order in 2002 and it now has four Q400s in its active fleet.
• California-based AeroCentury has purchased a Bombardier Q300 turboprop, which will be leased by Caribbean Star Airlines through 2007. Based in Antigua, Caribbean Star flies about 100 daily flights to 13 Caribbean destinations.
• Mesa Air Group [MESA] employees participating in its bonus program earned bonus payments based on the carrier's third quarter profits. The participants in the program have agreed to a 5 percent reduction in wages for one year. In return, participants are paid back their salary reduction plus an additional 5 percent for each quarter Mesa posts a profit. The program has paid bonuses to participants for the last 10 fiscal quarters.
• CAE [CGT] recently signed a number of training and simulator contracts valued at $11.2 million. The deals include a multi-year training pact for Skyway Airlines, a unit of Midwest Airlines [MEH]. Skyway pilots will be trained on a Dornier 328Jet trainer in Dallas.