Wellington to Invest in America West Merger

The proposed merger of America West and US Airways got a boost late last week when Wellington Management Co. said it would invest $150 million in the combined airline.

Wellington, which controls $470 billion in assets, joins other investors, including Air Canada parent ACE Aviation Holdings Inc., which have offered $350 million to help finance the deal.

Tempe, Ariz.-based America West Holdings Corp. and US Airways Group Inc. announced plans to combine May 19.

The outside capital is needed to complete the merger and bring US Airways, the No. 7 U.S. airline, out of bankruptcy protection. America West, the eighth-largest U.S. carrier, didn’t have enough cash to acquire US Airways on its own.

The airlines, which plan to operate under the US Airways name, said they expected to save about $600 million a year.

The Wellington investment brings the total new equity secured for the deal to $500 million. Other commitments include $125 million from a prior funding agreement with Eastshore Holdings, $100 million from Boston-based Par Capital Management Inc., $75 million from ACE and $50 million from Peninsula Investment Partners.

When the deal was announced, the airlines said they had raised a total of $1.5 billion, including the $350 million in new equity investments.

US Airways, based in Arlington, Va., disclosed the Wellington investment in a U.S. Bankruptcy Court filing Friday. Wellington is based in Boston.