Republic supplies $35 million loan to US Airways

Washington DC
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After inking financing deals worth up to $108 million with three other carriers, Republic Airways Holdings has agreed to give US Airways a $35 million loan in two instalments.

Republic gave $10 million to the Star alliance member on 20 October. Remaining funds may be provided during the first quarter of 2009, subject to certain conditions.

The US Airways loan is the fourth financing deal Republic has brokered since August when it partnered with two fellow unsecured creditors to supply $75 million in debtor-in-possession financing to Frontier Airlines. The deal carried an immediate commitment of $30 million, with additional funding dependent on terms such as the revision of union collective bargaining agreements by 15 November.

Then in September, Republic agreed to give Midwest Airlines $15 million in financing as part of a 10-year deal in which it will fly 12 Embraer E-170s as Midwest Connect effective this month. The loan is for one year, but the Indianapolis, Indiana company also committed $10 million more to Midwest based on the achievement of certain milestones.

Earlier this month, Republic announced it will give up to $8 million in financing to Mokulele Airlines as part of a deal in which Republic subsidiary Shuttle America will operate four E-170s for the Hawaiian carrier. The agreement gives Republic the right to acquire up to 45% of Mokulele's common stock.

Interest in the US Airways arrangement will be paid quarterly, with the principal amounts to be repaid between October 2009 and October 2011.