The Deal: Seabury and the promise of a soft landing

by Lou Whiteman

When bankruptcy grounded U.S. Airways and Air Canada, they turned to John Luth for help.

John E. Luth left Continental Airlines Inc. in 1995, intent on forming an aviation-focused investment bank geared to profit from the industrying's notorious booms and busts. Little did he know that it would take the biggest downturn in airline history for his bank, Seabury Group LLC, to really make its mark.

The New York firm has participated in three high-profile airlines restructurings since Sept. 11, including serving as exclusive bankruptcy adviser for US Airways Group Inc. and Air Canada Inc.

Through his role as adviser first to Pheonix-based America West Airlines Inc. and more recently to US Airways, Luth has overseen restructurings that have shed nearly $9 billion in combined debt and reduced annual labor costs by billions. And although US Airways is only the nation's seventh-largest airlines, observers say the changes Luth has engineered are being felt industrywide. "US Airways is the template other airlines are using to figure out their own finances," says one attorney representing holders of debt issued by United Airlines parent UAL Corp. and other airlines. "It is the starting point for the entire industry's reorganization."

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