ALEXANDRIA, Va. – A federal judge Thursday approved bankrupt US Airways' (search) cash finance deal with a federal government board and another arrangement allowing the airline to take delivery of nine regional jets.
The Air Transportation Stabilization Board (search) (ATSB) decision to let US Airways use cash from a federal loan through June 30 is crucial to the carrier's plan to emerge from bankruptcy this summer.
"Our customers should book us with confidence, knowing that we have sufficient cash to operate, as well as to implement the many changes that are already under way," said Bruce Lakefield, chief executive of US Airways.
Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia also allowed the No. 7 U.S. airline to take delivery of nine regional jets -- six from Brazilian manufacturer Embraer SA (search) and three from Canada's Bombardier Inc. (search) .
US Airways has been operating with the help of ATSB cash collateral since it filed for Chapter 11 protection in September, its second trip through bankruptcy protection in two years.
An initial ATSB pact was extended until Jan. 15. The airline said the provisions of the new extension are consistent with the previous deal, as well as the company's agreement with the General Electric Capital Aviation Services , that it maintain minimum weekly cash balances and sufficient liquidity.
Achieving these cash requirements depends on the carrier winning the cost savings it proposed to its machinists union. Last week, the airline won court permission to throw out the machinists' contracts if they do not agree to concessions quickly.
US Airways shares were up 10 cents at $1.18.