AMERICAN AIRLINES has agreed to buy the US Airways Shuttle - if US Airways decides not to buy the New York-Boston-Washington high-frequency operation, which it manages under a ten-year contract signed in 1992. US Airways has previously said that plans to buy the Shuttle are on hold until it negotiates cost-cutting agreements with its unions.

The airline's contract to manage the former Trump Shuttle, after it was taken over by creditors in April 1992, required US Airways to indicate after Ìve years whether it intended to buy the operation. The carrier says that it set in motion in April a procedure to value the Shuttle, which analysts estimate to be worth around $300 million.

Its agreement gives US Airways the option to purchase the Shuttle at the established price. If it rejects the valuation, it still has the right to purchase the operation by matching any offer made by a third party. American says that it has signed a binding agreement to purchase all of the Shuttle, including US Airways' 47% stake, but does not disclose a price.

American says that it would operate the service - which involves 12 Boeing 727-200s - as an integral part of the airline, increasing its presence in the north-east USA. Delta Air Lines operates a competing shuttle service, also with 727s.

Source: Flight International