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CNN Live At Daybreak

US Airways to File for Chapter 11

Aired August 12, 2002 - 05:05   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL COSTELLO, CNN ANCHOR: It comes as no surprise, later this morning US Airways will head to bankruptcy court. It's the first major carrier to declare bankruptcy since the September 11 attacks.
Patty Davis has details.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT: After months of trying to lift itself out of its financial troubles, US Airways filed for Chapter 11 bankruptcy protection.

CHRIS CHIAMES, SENIOR V.P., U.S. AIRWAYS: Our customers shouldn't notice anything different. Our flights are operating. We plan to operate a full schedule through this process.

DAVIS: The airline has been hard hit by the recession and a cutback in travel after the September 11 terror attacks. A major hub, Washington's Reagan National Airport, didn't fully reopen until months later. The airline lost more than $2 billion last year.

DARRYL JENKINS, AVIATION INSTITUTION, GEORGE WASHINGTON UNIVERSITY: This they will get rid of at the same time massive amounts of debt, which they don't need. So they will come out of this a very trim competitor. For the first time, US Airways will be a strong competitor on the East Coast.

DAVIS: US Airways has been trying to engineer a turnaround. Its pilots and flight attendants recently OKed wage concessions. But the company says there could be some job cuts and that has some employees nervous.

UNIDENTIFIED MALE: It has to go pretty deep to get to me, so it all depends. I have coworkers with less seniority, so I'm concerned about that, too.

DAVIS: Also crucial to the airline's comeback plan, $900 million in loan guarantees it's trying to secure from the federal government.

(on camera): US Airways says it plans to emerge from bankruptcy early next year stronger and ready to compete.

Patty Davis, CNN, Washington.

(END VIDEOTAPE)

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