US Airways yesterday moved a step closer to a near-miraculous reemergence from bankruptcy, securing $125 million in financing from Indianapolis commuter carrier Republic Airways and Greenwich, Conn. investor Wexford Capital.

The new infusion, coupled with $125 million already committed by Air Wisconsin Airlines, will act as a cash cushion for the beleaguered US Airways as it tries to recover from the ravages of high fuel prices, low fares and widespread industry turmoil.

US Airways can also tap another $110 million by selling as many as 28 regional jets and 137 East Coast airport slots to Republic, which now carries passengers to and from smaller cities under the US Airways Express banner.

The arrangement also acts as a new financing strategy for US Airways, which has now turned twice to smaller, less-well-known regional carriers for help.

But Republic -- which flies for United Airlines, American Airlines and Delta Air Lines -- is profitable, something US Airways is not. It earned $44.8 million last year while US Airways lost $611 million.

Founded 32 years ago in Jamestown, N.Y., it now serves 70 cities in 30 states, with 650 flights per day.

But the money from Republic and its majority shareholder, Wexford Capital, is still contingent on US Airways' ability to raise another $100 million in additional outside financing, which would give it a total of $350 million; produce a business plan satisfactory to Republic; and put the Republic agreement before U.S. Bankruptcy Judge Stephen Mitchell for approval.

A hearing before Mitchell in Alexandria, Va. is set for March 31.

The filing of a new reorganization plan, due today, has been pushed back to April 15.

In return for its commitment, Republic wants several seats on the US Airways board and a new jet service agreement with Republic-owned Chautauqua Airlines allowing it to fly larger and newer Embraer 170 and Embraer 190 jets under the US Airways Express banner.

"The Republic management team has a proven track record and we look forward to an expanded relationship," said US Airways Chief Executive Officer Bruce Lakefield, in a prepared statement.

Republic, which relies on US Airways for a sizable chunk of its revenue, is using the financing agreement as insurance, guaranteeing itself a stream of revenue if US Airways survives. US Airways has the option of selling Republic 10 of its Embraer 170 regional jets, which are smaller than mainline jets, another three Embraer 170s on delivery, 113 commuter slots at Ronald Reagan Washington National Airport and 24 commuter slots at New York's LaGuardia Airport.

US Airways could also lease to Republic another 15 Embraer 170s and work with Republic to locate a heavy maintenance facility for the Embraer planes at an undisclosed location. Republic would lease back the airport slots to US Airways and operate the planes under the US Airways Express banner.

All that would provide US Airways with another $110 million no later than Dec. 31.

Or, to gain access the same $110 million, US Airways can sell Republic all 28 of its Embraer 170s, which would represent a sale of US Airways' MidAtlantic Airways operation to Republic. MidAtlantic, a division of US Airways, was supposed to be a home for US Airways' new line of smaller, more nimble regional jets, and the headquarters was supposed to be Pittsburgh. It was part of a 2002 strategy, conceived during US Airways first bankruptcy, to return the carrier to profitability, flying routes that could not be served by the larger mainline planes.

Now Republic could potentially run MidAtlantic under the US Airways Express brand, while owning it.

The federal government, backer of loans that propped up US Airways through two bankruptcies, would have to approve the sale of any assets to Republic.