src='/AM/Images/headlines/headline.gif' />
May 31, 2005
Hawaiian Airlines Approaches End of Two-year Bankruptcy
Hawaiian Airlines is preparing to pay off its creditors on June 1,
the Associated Press reported. The Honolulu-based airline, which filed
for chapter 11 reorganization in March 2003, will exit its second
bankruptcy since 1993 on Wednesday. The company is now in better
financial shape than it had been in 2003. The airline has cheaper leases
on its aircraft and more than $100 million in unrestricted cash as of
April. President Mark Dunkerley will take over as CEO on Wednesday when
trustee Joshua Gotbaum steps down. Dunkerley says he’s looking to
expand the company in California, the East Coast and possibly Asia.
US Airways
Pilot Union Files Objection in US Airways–America West
Merger
The Air Line Pilots Association has filed an objection to a provision
in the proposed merger between US Airways and America West,
Airline Industry Information reported. The motion, filed in
the U.S. Bankruptcy Court, is not an objection to the merger but seeks
to preserve the rights of the union as the merger goes forward, the
Associated Press reported. The union filed the objection to a provision
that it believes would limit its rights in contesting the merger. A
judge is expected to hear the arguments in the matter today and is also
expected to establish a timeline and framework for the proposed merger
between the two airlines.
US Air May Draw More Bidders for Reorganization
A bankruptcy court decision expected as early as today could allow
other bidders to compete to fund a reorganization plan for US Airways
Group Inc., which already has agreed to merge with America West Holdings
Corp., the Wall Street Journal reported. With the addition
of a fifth investor—Wellington Management Co. LLP, which late
Friday pledged $150 million of new equity—the terms of the merger
call for $500 million of new equity from outside investors, plus $150
million more from a planned rights offering, as well as a cash injection
of $1.1 billion from vendors, suppliers and others, the online newspaper
reported.
United Airlines
UAL Fails to Reach New Terms with Lessors, Will Return Four
Planes
As UAL Corp.’s United Airlines faces an important day today in
its pursuit of new labor agreements, the company acknowledged it must
return four Boeing 767-300 aircraft to leasing companies because the
airline and the lessors couldn’t agree to new rental terms, the
Wall Street Journal reported. Earlier this month, UAL was
dealt a setback when the U.S. Seventh Circuit Court of Appeals reversed
a November 2004 order by United’s bankruptcy judge, who barred
lessors from repossessing 14 of the airline’s 460 jetliners. The
three-judge panel ruled the planes could be taken back unless the
airline makes the full rental payments.
Threat of Strike Looms over United, Union
Threat of a strike loomed over last-minute talks between United
Airlines and its largest union, under pressure to reach a new contract
agreement by a judge’s Tuesday deadline, the Associated Press
reported. Negotiations between the airline and the International
Association of Machinists and Aerospace Workers continued into early
today as another union representing United's 7,000 mechanics ended
electronic voting on a proposed contract deal, the newswire
reported.
Cost Cuts Dominate Air Transport Meeting in Tokyo
The air travel industry’s growing battle to cut costs dominated
international talks that ended today, as the business tackles rising oil
prices, high security costs and the threat from new budget airlines, the
Associated Press reported. In recent years, major air travel industry
players have been hit by big losses and sometimes bankruptcy, as
concerns about terrorism and competition from discount airlines have
combined with the recent oil price surge to put a crunch on jet travel.
Representatives at the meeting also demanded that governments lower
taxes and relax regulations to lower costs, the newswire reported.
Calpine Sells U.K. Plant to International Power
U.S.–based power producer Calpine Corp. has sold a British
power station to the U.K.’s International Power PLC and
Japan’s Mitsui & Co. Ltd. for 500 million pounds ($912
million), the Financial Times reported on Monday.
International Power will take 70 percent of the Saltend unit under a
partnership which will hand the other 30 percent to the Japanese trading
house, the newspaper reported.
New Trump Casinos Strong, Competitors Stronger
Trump Entertainment Resorts Inc., which recently emerged from
bankruptcy, now has a stronger balance sheet and lower debt cots but its
stock is no bargain when compared to competitors, Barron’s
reported. The company entered chapter 11 protection in November and
emerged on May 20. The new company began trading last week on the
over-the-counter (OTC) bulletin board.
Satmex Evaluating Bankruptcy Alternatives
Troubled Mexican satellite operator Satmex said it is evaluating its
options after certain creditors filed an involuntary chapter 11 petition
of the US bankruptcy code against the company in a New York court last
week, Satmex said in a statement, Nameriacs.com reported. “Satmex
anticipated this filing as one of several likely scenarios. The company
is currently evaluating its options and will respond appropriately in
the near term.”
Alstom Cuts Losses after Restructuring
French engineering company Alstom SA said today that it more than
halved its full-year net loss and reiterated plans to return to profit
in the current fiscal year, the Associated Press reported. For the 12
months ending March 31, Alstom’s net loss shrunk to €865
million (US$1.08 billion) from a loss of €1.84 billion in fiscal
2003–2004.
XM Satellite Radio Drops Boeing, Places an Order With Loral
Space
XM Satellite Radio Holdings Inc. dropped supplier Boeing Co. and
instead placed an order for a roughly $200 million satellite with Loral
Space & Communications Ltd., the Wall Street Journal
reported. The decision is a setback to Boeing’s campaign to revive
its formerly unprofitable satellite-making unit. Read the full article
at www.wsj.com (subscription
required).