US Airways files for bankruptcy protection

US Airways Group Inc., the nation's seventh largest airline, announced Sunday it had filed for bankruptcy protection, the second time in two years.

The filing came after US Airways' key unions rejected wage and benefit cuts amid skyrocketing fuel prices and cut-throat competition from low-cost carriers.

"We have come too far and accomplished too much to simply stop the process and not succeed," said Bruce Lakefield, US Airways' president and chief executive. "A restructured US Airways with lowcosts and low fares will be a dynamic competitor."

Lakefield said the carrier had managed to cut expenses by almost 2 billion US dollars during its restructuring process, but was eventually undercut by competition from low-cost airlines, andunabated fuel price increases.

The company projects its 2004 fuel costs to be approximately 300 million dollars higher than previously expected.

US Airways said it had an agreement in place with the government and with other lenders to use some of its cash reservesto continue operations while in bankruptcy.

In its filing, the company listed 8.8 billion dollars in assetsand 8.7 billion dollars in liabilities.

US Airways first filed for bankruptcy protection in August 2002after the Sept. 11 attacks devastated the airline industry as a whole and US Airways in particular. The company lost 2.1 billion dollars in 2001 as it dealt with the prolonged closure of Washington's Reagan National Airport, where it was the largest carrier, after September 11, 2001.

The company emerged from its first bankruptcy in March 2003.

Economists say the filing for bankruptcy by US Airways signaledmultiplying problems for the US airline industry, which is still struggling with the legacy of the Sept. 11, 2001, attacks.