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Last updated March 14, 2007 9:09 p.m. PT

US Airways wants 60 new jets

BLOOMBERG NEWS

US Airways Group Inc., restarting a push to retire its oldest jets, will order 60 aircraft valued at almost $5 billion by the end of April.

The airline is evaluating proposals from The Boeing Co. and Airbus for narrowbody, single-aisle planes, Chief Financial Officer Derek Kerr said in an interview.

Tempe, Ariz.-based US Airways also will decide by April 30 on the future of a pending order for 20 Airbus A350 widebody jets, Kerr said.

Newer jets would save money on maintenance and fuel. US Airways, the seventh-largest U.S. airline, suspended talks with aircraft manufacturers in November to pursue a hostile bid for Delta Air Lines Inc. and resumed talks after dropping the offer Jan. 31.

"There's a certain optimism linked to this kind of order," said Richard Aboulafia, vice president of Teal Group, a Fairfax, Va.-based consulting firm. A purchase of new mainline planes would be US Airways' first since its 2005 merger with America West Holdings Corp., he said.

For its narrowbody jets, US Airways will chose between members of the Boeing 737 and Airbus A320 families, Kerr said. The airline hopes to replace 55 737-300s with the new planes between 2008 and 2010.

For longer-range aircraft, US Airways will choose between Boeing's 787 Dreamliner and the Airbus A350, Kerr said. The airline ordered 20 A350s, valued at $3.2 billion, in November 2005 in exchange for a $250 million loan that helped finance the merger of US Airways and America West.

"The A350 today is not the plane we ordered," Kerr said, referring to delays and redesigns since 2005. "We need to know what the plane is going to cost and when it will be ready."

The delays have reached the point that US Airways has the right under its contract to cancel the earlier order, Kerr said.

US Airways must make a decision on the 787 soon or risk losing slots in Boeing's production line.

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