US Airways, the sixth biggest airline in the United States, has filed for bankruptcy protection.

US Airways will continue to operate while we complete our financial restructuring

Chief executive David Siegel

Under the so-called Chapter 11 procedure, the company will continue operating while it attempts to restructure its business and return to financial health.

Like other US airlines, US Airways suffered badly as a result of the recession and the downturn in the aviation industry following the 11 September terror attacks.

But it is the first of the major US carriers to file for bankruptcy since that time.

Over the past financial year, the airline is reported to have lost more than $2.1bn (�1.38bn).

"US Airways will continue to operate while we complete our financial restructuring," chief executive David Siegel said.

"Our customers should be confident that we will continue service to the more than 200 communities in our network," he added.

Hub closed

Last month US Airways pilots agreed to pay cuts amounting to $465m a year, in an effort to keep the company afloat.

The airline recently has asked the government to back a $1bn loan.

It is also seeking to save $1.3bn in annual expenses from labour, suppliers, lenders and creditors.

US Airways did not lose any planes on 11 September.

But the airline's business was severely affected when Reagan National Airport, its main hub near Washington DC, was shut down for three weeks and reopened with only a limited schedule.

Plans for emerging from bankruptcy include Texas Pacific Group investing $200m in return for a 38% stake in the company. Failed merger

In 2000, US Airways was set to be taken over by UAL Corporation, owner of domestic rival United Airlines.

But the deal was called off the following year because of indications regulators would block it and concerns about economic conditions.

Both airlines have since reported heavy losses.

US Airways had said a merger with United was its best chance for remaining profitable in an increasingly competitive industry.

Analysts expressed doubt whether the carrier would survive, saying its best prospects were either finding another merger deal or selling itself off in pieces.

In its bankruptcy filing, US Airways listed assets of $7.81bn and liabilities of $7.83bn.

It said it aimed to emerge from bankruptcy in the first quarter of 2003.