US Airways May Seek Chapter 11

US Airways Group Inc. said Friday that it would seek federal loan guarantees because of losses incurred since Sept. 11 and would consider filing for bankruptcy protection if it was unable to reach cost-cutting agreements.

The Arlington, Va.-based carrier had said it would seek the guarantees, but had not discussed the possibility of a Chapter 11 filing.

The No. 6 U.S. airline had cash reserves of $561 million at the end of the first quarter but has been burning about $3.5 million a day.

“The preferred path is a consensual agreement with our employees and our stakeholders to reach an agreement and to file [a loan] application,” airline spokesman Dave Castelveter said.

It will be the second major U.S. carrier to apply for loan guarantees under the $15-billion federal airline bailout approved after the terrorist attacks. America West Holdings Corp.’s America West Airlines was the first.

US Airways stock fell $1.35, or 27%, to $3.60 on the New York Stock Exchange.