Decision Expected for Airline’s Federal Loan

A decision on the first airline application for a federal loan guarantee could come as early as this week.

America West Airlines, the nation’s eighth-largest carrier, is seeking a $400-million loan backed by Uncle Sam and so far is the only airline to have sought part of the $10 billion in loan guarantees available to the airlines.

The decision will be made by the Air Transport Stabilization Board, which was created when the aviation industry secured a federal bailout--totaling $15 billion overall--after the Sept. 11 attacks.

America West Airlines, a subsidiary of Phoenix-based America West Holdings Corp., said the guarantee would unlock $600 million in other pending financing and concessions from vendors and other parties.

The case is being watched closely not only as it affects America West’s long-term survival, but also because its application and its outcome could set a precedent for how other airlines seek loan backing.