FROM THE OFFICE OF PUBLIC AFFAIRS

March 12, 2004
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ATSB Statement on Agreement with US Airways

The Air Transportation Stabilization Board (ATSB) announced today that it reached an agreement with US Airways, Inc. under which the company has repaid $250 million of the $1 billion term loan which is backed by a $900 million ATSB guarantee. This repayment benefits taxpayers substantially. At the same time, the ATSB took steps to provide US Airways with flexibility to adapt to changing conditions in the airline industry. Specifically, the ATSB granted US Airways additional flexibility to sell certain assets, provided that the sale does not adversely affect the ATSB’s credit position, among other conditions. Additionally, the ATSB granted the company limited relief under its financial covenants through the end of 2005 and a waiver in connection with the 2003 auditors’ report. US Airways also agreed to an increase in the minimum amount of cash that the company must have on hand. Further detail is available in the 10-K that the company filed today.

Following the Board’s decision, the Chairman of the ATSB, Federal Reserve Board Governor Edward M. Gramlich said, "In our view, these changes significantly benefit taxpayers and give US Airways the flexibility to continue working toward success in a challenging industry environment. This agreement accomplishes both of these goals, without undue government involvement in US Airways’ business."

This action was taken by a vote of 2-1. Voting in favor were the Chairman and Department of Transportation Under Secretary for Policy Jeffrey N. Shane. Acting Treasury Under Secretary for Domestic Finance Brian C. Roseboro voted against the action.