By AP Business Writer
updated 5/31/2005 12:03:29 PM ET 2005-05-31T16:03:29

A bankruptcy judge on Tuesday granted US Airways' request to establish a 30-day window for other parties to make bids to supplant its proposed merger with America West.

Bankrupt US Airways Group Inc. sought the window to "shake the tree and see if there's any higher, better offer."

If no other suitors emerged, the two air carriers would exclusively negotiate a merger.

US Airways, which filed for bankruptcy last year, has proposed a marriage with America West Holdings Corp. based in Tempe, Ariz., that would allow it to emerge from its second trip to bankruptcy court since 2002

In another order Tuesday, U.S. Bankruptcy Judge Stephen Mitchell allowed a provision that either airline receive a $15 million breakup fee if either party walks away from the deal.

The Pension Benefit Guaranty Corp., the largest US Airways creditor, had objected to that provision, saying it would stifle potential competing bids.

Mitchell also struck language that would have prohibited the airline's unions from speaking out or taking action in opposition to the merger. The unions said in court Tuesday they do not oppose the merger but simply want to preserve their rights in the future.

US Airways had said it had not intended for the specific provision to impinge on the unions' advocacy rights.

Tuesday's hearing was scheduled to establish a framework and timeline for approval of the proposed merger between the nation's seventh- and eighth-largest airlines.

The two airlines have a combined fleet of about 400 jets.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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