PHOENIX – America West Airlines, a unit of America West Holdings Corp., said on Tuesday it applied for $400 million in federal government loan guarantees, the first major U.S. airline to do so in the wake of the Sept. 11 attacks.
America West, the No. 8 U.S. carrier, said the aid would be the catalyst for nearly $1 billion in financial support that the airline has arranged conditioned upon the guarantees.
The carrier said the loan, if granted, would be repaid from 2005 to 2008 while it maintains ``comfortable cash balances.''
Shares of America West were down almost 3 percent on the New York Stock Exchange, trading 5 cents lower to $1.65.
The U.S. government rushed through a $15 billion bailout package for the airline industry days after four commercial airliners were hijacked and crashed in New York, outside Washington and in Pennsylvania. The attacks sent the industry into a tailspin.
America West flies to 90 destinations in the United States, Canada and Mexico. In the days immediately after the attacks, the airline said it could file for bankruptcy protection without government aid.
Shares of the airline have dropped 86 percent this year, falling a stunning 80 percent since Sept. 11 alone. America West has underperformed the American Stock Exchange airline index by 22 percent this year.
The airline said it has negotiated a $426 million loan with unnamed lenders. It wants the $400 million in guarantees from the Air Transportation and Stabilization Board to secure a loan tranche in that amount. The guarantees would be supported by an ''at-risk'' $26 million loan tranche, $135 million of additional aircraft financing, and another $450 million in concessions, financing and assistance from key constituents, it said.
As part of the application package, America West said it submitted a detailed, seven-year business plan.
The plan includes about $600 million of concessions from parties like aircraft lessors, manufacturers, creditors, vendors, key state and local governments, shareholders and employees.
The plan also assumes a conservative recovery for the industry.
``The plan assumes the economic rebound is slow and gradual,'' the airline said. ``America West's industry revenue assumptions are below current Wall Street expectations.''
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