Airbus, Barclays play key roles in US Airways' latest financing

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Airbus, Barclays Bank and Republic Airways Holdings are among "several" strategic partners contributing to the nearly $1 billion in financing and near-term liquidity commitments raised by Star Alliance member US Airways.

In a filing with the US Securities and Exchange Commission (SEC), US Airways reveals that on 20 October it agreed to amendments of its aircraft purchase agreements with the European airframer covering Airbus A320 family aircraft, A330s and A350 XWBs.

According to Flight's ACAS database, US Airways has well over 100 Airbus aircraft on order, including 18 A350-800s and four A350-900s.

In exchange for US Airways' agreement to the new amendments, Airbus "advanced to US Airways Group $200 million earned in consideration of aircraft deliveries under the various related purchase agreements", says the carrier in its SEC filing.

Also on 20 October, US Airways entered into an amended credit card agreement with Barclays Bank, which provides for, among other things, the pre-purchase of frequent flyer miles in an amount totaling $200 million.

Republic, in a separate statement today, reveals it has loaned US Airways $10 million. A further $25 million in funding may be provided during the first quarter, subject to certain conditions.

Specific details of these three arrangements have not been disclosed. Other partners involved in US Airways' new financing package remain confidential, said US Airways executives today during an earnings conference call to discuss the carrier's third quarter net loss of $865 million.

In total, US Airways has raised approximately $950 million of financing and near-term liquidity commitments from partners.

All but $150 million of this amount closed on 20 October. Proceeds were used to prepay the the company's bank debt facility and boost its cash position.

The remaining $150 in liquidity commitments are expected to close during the fourth quarter, with cash benefits realized through 2009.

In a letter to employees, US Airways CEO Doug Parker notes that the carrier has "raised liquidity in a world where companies like Lehman Brothers, Merrill Lynch and AIG no longer exist as they once were".

With that liquidity, he says: "Our total cash position relative to annual revenues is now among the highest of the major US airlines."