PS Group’s Executives Outline Plans

PS Group will become a profitable aircraft leasing and energy exploration and sales company with about $315 million in annual revenue after it receives $280 million in cash for its 83% stake in Pacific Southwest Airlines, PS Group executives told shareholders during Thursday’s annual meeting.

However, PS Group Chairman J.P. Guerin cautioned that PS Group will not automatically remain profitable because “none of (PS Group’s) businesses are simple businesses.”

PS Group will use some of the $280 million in cash that it will receive on May 29 to pre-pay $184 million in debt and pay $40 million in state and federal taxes.

Guerin hinted at a future expansion, either in the holding company’s existing aircraft leasing and energy businesses or in an unrelated business. “This is not a good time to sit around with a lot of cash,” Guerin said.

Guerin and PS Group Chief Executive Paul C. Barkley told shareholders that PS Group executives had foregone planning during the last five months in order to complete the sale of PSA to USAir.

“I think everybody’s intention has been to catch this rabbit before they started thinking about making rabbit stew,” Guerin said.

Passengers won’t notice any immediate changes following the sale of Pacific Southwest Airlines to USAir on May 29, according to Guerin, who added that PSA executives will retain their jobs for a while after the merger.

USAir hopes to “provide continuity” while it merges PSA into its fleet. The airline holding company also has agreed to acquire Piedmont Airlines.

USAir is expected to mail checks to PSA shareholders on May 29, Barkley said.