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October 19, 2004
US Airways Details Plan to Be Low-Cost Carrier
Bankrupt US Airways detailed plans yesterday for becoming a low-cost
carrier, saying it will overhaul its flight schedule and sharply boost
aircraft turnaround times beginning in February, Reuters reported. With
steep court-imposed labor cost cuts assured and a fixed amount of cash
from loans accessible through mid-January, the airline will try to
weather the slowest period of the year before proceeding with an
unprecedented transformation ahead of spring travel. The changes take
effect on Feb. 6, 2005, and also affect service offered by US
Airways’ regional partners, the newswire reported.
KMart Names Yum Marketing Maven as CEO
Kmart Holding Corp. yesterday named a new president and CEO in a move
that could signal the start of a campaign to revamp the discount
retailer’s image, Reuters reported. Troy, Mich.–based Kmart
hired Aylwin Lewis from restaurant company Yum Brands Inc., effective
immediately. He replaces Julian Day who will remain on Kmart’s
board of directors to help with the leadership transition. Analysts said
Day succeeded in stabilizing the chain’s financial position, but
the company needed a marketing specialist to expand its customer base to
younger shoppers. Lewis spent 26 years in the restaurant trade and 13
years at Yum—owner of the KFC, Pizza Hut and Taco Bell
chains—as president, chief operating officer and chief
multibranding officer, the newswire reported.
MCI Planning to Write Down Phone Assets
MCI said yesterday that it planned to take a $3.5 billion charge in
the third quarter to better reflect the loss in value of its phone and
data networks, the New York Times reported. At the same
time, MCI said it would pay a dividend of 40 cents a share in the third
quarter, payable on Dec. 15 to those who held shares on Dec. 1. The
dividend, approved by directors in August, is part of the
company’s reorganization and comes from excess cash left on its
balance sheet.
ATA Flight Attendants Ratify Giveback Deal
Flight attendants at struggling low-cost carrier ATA Airlines on
Monday said they approved a contract that would save the airline $24
million over the next two years, Reuters reported. Indianapolis-based
ATA’s 1,900 flight attendants ratified the cost-savings
deal—to be financed in part by a 10-percent cut in hourly
pay—after rejecting a request for $8.9 million in pay givebacks in
July. ATA faces a liquidity crisis that some industry analysts say could
push it into bankruptcy by the end of the year. In an August filing with
the Securities and Exchange Commission, the airline warned it would
likely run out of cash in early 2005 and might sell some assets or
restructure, the newswire reported.
Continental Posts $16 Million Third-quarter Loss
Continental Airlines Inc. today reported a $16 million third-quarter
loss, which included $22 million in special charges related to
retirement of leased MD-80 aircraft, the Associated Press reported. The
airline also said it expects to post “significant” losses
for all of 2004 and 2005 unless the current environment improves.
Continued high fuel prices and government regulation were also cited as
factors contributing to the loss of 24 cents per share in the quarter
for the airline, which is based in Houston. The carrier posted earnings
of $133 million, or $2.04 per share, for the same quarter one year
earlier, the newswire reported.
Equus Gaming Affiliates File for Chapter 11 Bankruptcy
Equus Gaming Co. L.P. said three of its affiliates filed separate
voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the
District of Delaware, the online Wall Street Journal
reported. According to a Form 8-K filed today with the Securities and
Exchange Commission, the three affiliates are El Comandante Management
Co., Housing Development Associates S.E. and El Comandante Capital Corp.
Each of the affiliates will continue to manage over its assets and
business as a debtor-in-possession, the online newspaper reported.
SunTrust Says Florida Housing Project Files Chapter 11
SunTrust Bank, trustee for $14.7 million of housing project debt from
a Florida issuer, on Monday said the borrower had filed for chapter 11
bankruptcy protection and bond payments due Oct. 1 were not made,
Reuters reported. SunTrust previously warned holders of the 2002 revenue
bonds sold by Capital Trust Agency for the River Bend Apartments Project
that the project had not generated enough revenue to cover expenses and
payments due on its bonds, the newswire reported.
ABI to Hold Educational Press Briefing on Bankruptcy and Pension
Reform Today
ABI will hold an educational press teleconference on bankruptcy and
pension reform at 11:30 am EST today. The event is free and is open to
ABI members and the public, beyond registered press. The conference will
address whether companies in bankruptcy should be required to maintain
their pension plans, legal issues surrounding termination of pension
plans, implications for employees and retirees and other stakeholders,
status of pension reform legislation to reform the system of traditional
“defined benefit” pensions and more. Speakers include Vince
Snowbarger, Assistant Executive Director, Pension Benefit Guaranty Corp.
(Washington, D.C.), Hon. William T. Bodoh of Frost Brown Todd LLC
(Columbus, Ohio), Mary Lou Savage of the Association of Flight
Attendants (Washington, D.C.) and Robin E. Phelan of Haynes and Boone
LLP (Dallas). For information on how to register contact Karim Guirguis
at
href='mailto:kguirguis@abiworld.org'>kguirguis@abiworld.org.