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Airlines bailout status
CHICAGO, Sept 24 (Reuters) - Beleaguered U.S. airlines will begin this week to get their share of a $15-billion federal bailout package approved last weekend and designed to offset the devastating financial impact of recent air attacks in the United States on the airline industry.
Suicide attacks two weeks ago, in which U.S. commercial jets were used to crash into New York's World Trade Center and Washington's Pentagon building, led to a two-day groundstop for U.S. air traffic and have sharply reduced air travel demand.
The federal aid package includes $5 billion in cash and $10 billion in loan guarantees, with a formula for relief based on available seat miles that translates to market share. The legislation also includes provisions to limit the airlines' liability from the attacks.
Here is an update on where the 10 major carriers now stand:
AMR Corp.'s American Airlines <AMR.N>
Airline analyst Glenn Engel of Goldman Sachs says he sees the largest U.S. commercial carrier getting about $900 million in cash. American has reduced its flight schedule by 20 percent and has slashed 20,000 jobs, or 14 percent of its staff. On Monday, the Fort Worth, Texas-based airline said it would cancel three routes: San Jose/Taipei, Chicago/Stockholm and Chicago/Birmingham, U.K. on a seasonal basis.
UAL Corp.'s United Airlines <UAL.N>
A spokesman for United, the No. 2 U.S. commercial airline, told Reuters on Saturday that he estimates the company's cash stake of the bailout package to be 17 to 18 percent of the total, which translates to about $900 million. On the heels of a 20-percent reduction in flights, the Chicago-based airline last week said it would furlough about 20,000 workers, or about one-fifth its staff.
Delta Air Lines Inc. <DAL.N>
No. 3 U.S. commercial airline Delta will likely get about $700 million in cash aid, according to rating service Standard & Poor's. The Atlanta-based airline last Thursday put its workers on notice for expected cost-cutting moves, including layoffs. It didn't say how many employees would be cut, but in a phone message to employees, Delta President Fred Reid said, "We estimate the drop in size of operations will be in the range of 15 to 20 percent."
Northwest Airlines Corp. <NWAC.O>
Goldman analyst Engel expects Northwest to get roughly $500 million in direct aid. The fourth-largest U.S. airline on Friday announced staff reductions of 10,000, or 19 percent of its work force.. The Minneapolis-based carrier has reduced its flight schedule by 20 percent.
Continental Airlines Inc. <CAL.N>. On Saturday, Houston, Texas based Continental said it expects its cash portion of the federal aid to be about $300 million. "It's the lifeline that we need to take us through the fall as the industry restabilizes itself," spokesman Dave Messing told Reuters. Last week the airline said it would furlough about 12,000 employees. The company has cut flights by 20 percent and has eliminated service to 10 cities. On Monday it said it would reduce the number of flights between Hong Kong and New York.
US Airways Group Inc. <U.N>
Arlington-Virginia-based US Airways on Monday said it soon expected to release a statement on its share of the federal aid, which S&P estimates will be roughly $340 million. The airline is reducing its schedule by 23 percent and is laying off 11,000 workers. Last week, it said it had less than $1.2 billion in cash on hand.
Southwest Airlines Co. <LUV.N>
Dallas-based budget carrier Southwest sees its share of direct cash aid at about $225 million to $315 million, Chief Financial Officer Gary Kelly told Reuters Monday. "Those are very rough estimates," he said. The company recently drew down its full line of credit of $475 million for a total cash position of roughly $1.4 billion. Southwest has not cut employees or routes.
America West Airlines <AWA.N>
Phoenix-based America West will likely get in excess of $100 million in cash aid, spokeswoman Patty Nowack said Monday. The carrier has cut 20 percent of service to the 90 cities it serves and is slashing about 2,000 jobs. "We have been acknowledging that load factors (paying passengers) are definitely down and we've seen a decline in booking," Nowack said. Cash on hand, she said, "is not significantly different from what we had before (Sept. 11)."
Alaska Airlines <ALK.N>
Seattle-based Alaska Airlines, expects to receive between $90 million to $100 million in direct aid, spokesman Jack Evans told Reuters Monday. The airline, which drew down a $150-million credit line following the attacks for a total of about $600 million in cash on hand, is now going through cash at the rate of about $1 million per day. The company on Friday said it plans to operate 80 to 85 percent of its regularly scheduled flights.
Amtran Inc.'s American Trans Air Inc. (ATA) <AMTR.O>
Indianapolis-based ATA is estimated to receive about $80 million in direct aid from the bailout, according to S&P. ATA, the tenth-largest U.S. airline, said last week that it would reduce it schedule by about 20 percent and furlough 1,500 workers.
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