Several airlines, large and small, have made offers for the major assets of US Airways, including its East Coast shuttle and gates at several airports, the New York Times said, citing sources who were briefed on the negotiations Tuesday night.
American Airlines, Delta Air Lines, JetBlue Airways and AirTran made preliminary bids last week in a process led by Morgan Stanley, the New York Times' sources said. Mesa Air Lines, a regional carrier serving the West Coast, has also said it was interested in bidding on US Airways' assets.
The board of US Airways is set to consider the offers at a meeting next month.
The airline, a unit of the US Airways Group, based in Arlington Va., emerged from Chapter 11 bankruptcy protection less than a year ago. But US Airways, the nation's seventh-largest carrier, has been struggling since. It is pressuring its unions for further concessions as it tries to cut more than the $200-million to $300-million it had planned to trim from its operations this year.
Late last year it said it had to revise its business plan to meet stiffened competition from low-fare carriers including Southwest Airlines, which plans to start service in May to Philadelphia, one of US Airways' three hubs.
US Airways operations in Philadelphia are among the operations the airline put up for sale, as well as its other hubs in Charlotte, N.C., and Pittsburgh; gates at La Guardia Airport and Logan Airport in Boston; its US Airways Express regional carrier; and its East Coast shuttle.
The shuttle was thought to have attracted the most interest among a group of carriers that made offers for the airline's assets, people briefed on the bids said.
US Airways has never said definitively what it would sell. And this month, David G. Bronner, the airline's chairman, said US Airways had retained Morgan Stanley "to help us see if anything makes sense."
Indeed, the bids may not be to US Airways' liking. For instance, the US Airways Shuttle was expected to bring only $100-million to $150-million, the New York Times' sources said, versus the $300-million bid that American made to purchase the shuttle in 1997.
US Airways has operated the shuttle since 1992, as part of a joint venture that ran the carrier, and took control of it in 1998.
Moreover, some of the airlines involved may encounter obstacles to completing the deals. For instance, while American, a unit of AMR, has been interested in buying the shuttle for years, it may have trouble winning the backing of its labor unions, which granted the airline deep cuts in wages and benefits last year when American said it was on the verge of Chapter 11 bankruptcy.
American or any other airline that purchases the shuttle would have to absorb US Airways' union members, who have vowed that a new buyer must honor their labor contracts. That could lead to sticky situations involving the seniority of pilots, flight attendants and other employees.
Robert W. Mann Jr., an industry consultant based in Port Washington, N.Y., saw two strategies in US Airways' efforts to find buyers for its assets. First, Mann said, the airline most likely wanted to put pressure on its labor unions, which granted the airline two sets of contract concessions in bankruptcy, but thus far have resisted any further cuts.
Since the assets were put up for sale in early January, US Airways' pilots agreed to hold discussions with the airline on its financial problems, although the pilots' union said the meetings were not formal contract talks.
Mann also said the company was most likely curious to see what its assets might bring in the industry's difficult economic climate. "It's almost as if they were dribbling out a little bit of honey to see whether any bees would arrive," Mann said.