America West Applies for Loan Guarantee

America West Holdings Corp.’s America West Airlines applied for $400 million in U.S. government loan guarantees to help recover from reduced demand and higher security costs after the Sept. 11 terrorist attacks.

America West, which said it was close to bankruptcy after the attacks, is the first major U.S. carrier to seek the guarantees provided under a $15-billion federal bailout plan for the airline industry.

The carrier said the government aid would trigger almost $1 billion in financial support and concessions negotiated by America West and contingent on receiving the guarantee.

The Phoenix-based company’s shares fell 1 cent to close at $1.69 in New York Stock Exchange trading. The stock has fallen 80% since Sept. 10.

America West would use such a guarantee to secure a $426-million loan it has negotiated with a group of unidentified lenders.