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Thursday May 19, 10:56
US Airways finalizes merger with America West
(by Helen Snow)

US Airways finalizes merger with America West A merger agreement between US Airways Group Inc. and America West Holdings Corp. will be announced as early as today after a day-long talks to finalize the deal.

The deal is expected to create the nation’s No. 6 airline in terms of traffic with the possibility for US Airways to escape from bankruptcy-court protection. Some analysts predict that the company that is to emerge will see obstacles from labor unions, tough industry conditions and competition from budget carriers.

On Wednesday, board of US Airways met to discuss the deal, while the board of America West will meet Thursday. The deal, though, may be delayed due to the obstacles the companies face. People close to the deal said the two companies are hopeful to complete it as soon as possible.

Air Canada, regional carrier Air Wisconsin Airlines, two hedge funds and a rights offering are expected to be the source of $500 million for the two carriers that agreed to merge. The loan from Airbus will provide further $250 million.

The two carriers said they would probably restructure their $1 billion in loans guaranteed by the federal Air Transportation Stabilization Board.
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