US Airways May Liquidate by February

U.S. Airways Inc. may have to liquidate by February if a judge does not enforce a provisional 23 percent pay cut on its union workers by October 14. Without these cutbacks, the airline’s cash reserves will drop down so low by February, when it has to make $260 million in debt and lease payments on its aircrafts, that its lenders will probably withdraw their financing. Consequently, without the financial backing of these lenders, the company will no longer have the ability to continue operating while in bankruptcy. The U.S. Airways bankruptcy court filing also signified that it will now take $950 billion in permanent yearly cost reductions from its union workers pay. As a result, the drop in pay of the average U.S. Airways Inc. employee would put U.S. Airways Inc. seventh among major U.S. airlines. A court date is set to hear this issue on October 7.