Airline flying despite bankruptcy filing

June 29, 1991|By Agis Salpukas | Agis Salpukas,New York Times News Service John H. Gormley Jr. of The Sun's business desk contributed to this report.

America West Airlines, which filed for bankruptcy court protection late Thursday, is one of the few carriers created after deregulation that is still flying.

The airline, the nation's ninth largest, said it would continue in service while seeking to reorganize its finances and business under Chapter 11 of the Federal Bankruptcy Code.

America West, which was one of the early success stories of deregulation, is given a fairly good chance of survival if it can develop a plan to continue without outside help. Given the state of the industry and antitrust factors, there is little chance that another carrier, either foreign or domestic, would buy it.

Working in America West's favor is that most passengers have become inured to bankruptcy filings and continue to book as long as service is not interrupted. Indeed, Richard Shimizu, a spokesman for the airline, said bookings were running at normal levels yesterday.

The airline was forced to file when it failed to get the leaseholders of its planes to put off payment for up to three months to ease a cash squeeze. It had announced earlier this month that it would suspend its lease payments on the 87 aircraft it rents in its fleet of 109.

"We have explored many alternatives in the last few months to arrange financing to see us through the most difficult time in the airline industry's history," said Edward Beauvais, chairman of the carrier. "Unfortunately, these endeavors have not been successful thus far."

The airline offers three flights a day from Baltimore-Washington International Airport -- two to Phoenix and one to Las Vegas. America West also operates two flights daily from Washington National Airport, one to Wichita, Kan., and the other to Omaha, Neb. Both flights continue to Phoenix. The airline has no flights from Dulles.

America West said the Federal Bankruptcy Court issued an order allowing the continuance of all its interline agreements, its frequent-flier program, ticket-refund policies and travel agent compensation.

There appeared to be little chance that a stronger carrier would come tothe rescue. Kevin Murphy, an airline analyst with Morgan Stanley, said carriers such as Northwest and USAir, whose route structures would mesh well with America West's, had been weakened financially and were not in a position to make an acquisition.

Other major airlines, such as American, United and Delta, he said, would face antitrust problems if they tried an acquisition, because many of their routes overlap with those of America West.

Mr. Murphy said help from foreign carriers was also a long shot because most have said they do not want to invest in troubled U.S. airlines.

The best chance for America West to survive, he said, was to develop a reorganization plan acceptable to the various creditor groups.

Public airline, bankruptcies

Airlines filing bankruptcy petitions:

America West Airlines .. .. .. .. 6/27/91

Midway Airlines .. .. .. .. .. .. 3/25/91

Pan Am Corp. .. .. .. .. .. .. .. .1/8/91

Continental Airlines Hldgs. .. .. 12/3/90

CCAIR, INC. .. .. .. .. .. .. .. . 7/5/90

Presidential Airways .. .. .. .. 10/26/89

Braniff, Inc. .. .. .. .. .. .. . 9/28/89

Eastern Air Lines, Inc. .. .. .. . 3/9/89

Royale Airlines, Inc. .. .. .. .. .9/9/87

Frontier Airlines .. .. .. .. .. .8/28/86

Prov./Boston Airline .. .. .. .. .3/13/85

Capitol Air, Inc. .. .. .. .. .. 11/26/84

Air One .. .. .. .. .. .. .. .. .10/26/84

Air Florida Systems .. .. .. .. .. 7/3/84

Continental Airlines .. .. .. .. .9/24/83

Braniff International, Inc. .. .. 5/13/82

Flight Transportation Co. .. .. .. 1/1/82

Airlift International .. .. .. .. .6/4/81

Frontier Airlines, Inc. .. .. .. . 1/1/81

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