Maybe Ed Shapiro is crazy for investing more money in the troubled, money-losing airline industry. But the partner with Boston equity fund PAR Capital Management has "great confidence" in the $100 million he devoted to the merger of US Airways and America West Airlines.

The investment is the largest single amount ever dedicated at one time by PAR, which controls a $1 billion portfolio and once was America West's largest shareholder. "We have done well historically despite the fact that the industry has not -- by taking contrarian positions," Shapiro said.

No matter the risk, some investors keep coming back to the beleaguered airline industry, looking for deals.

The proposed merger of US Airways and America West is yet another example.

PAR is one of five companies to devote a total of $500 million in new equity to the union of the nation's seventh- and eighth-largest carriers.

A $150 million stock rights offering, giving investors the right to purchase future shares at an agreed-upon price, also is planned. Partners and suppliers are expected to supply an additional $1.1 billion in the form of loans, debt refinancing and a potential signing bonus from credit card providers.

The new investors, including PAR, will own 41 percent of the new airline and control three of the 13 board seats.

The syndicate financing approach is different from the white-knight investment strategy used during US Airways' first bankruptcy, when lone investor Retirement Systems of Alabama came up with $240 million -- enough to bail the airline out of bankruptcy and set up the Alabama pension fund as majority owner of the airline and controller of most board seats.

The multibillion-dollar fund, which wrote off the $240 million investment last year, is not currently a participant in the proposed merger with America West. Fund manager David Bronner, who could not be reached for comment, told The Associated Press that, "They just want your money and don't want you to have any control."

Also absent from the deal is $20 billion investment outfit Texas Pacific Group, which bid $200 million for US Airways in 2002 but lost out to Bronner.

Some thought it might make another bid. But so far, the only commitment made by Texas Pacific, which owns 55 percent of the controlling shares at America West, is to convert its preferred shares into common stock once the merger is complete and collect a $6.4 million fee for advising America West.

"There are no deep pockets involved here," said local airline analyst Bill Lauer.

Two of the five investors willing to provide US Airways with new equity capital are airlines -- Air Canada ($75 million) and Air Wisconsin Airlines ($125 million). Both made the investment hoping to get work from the merged carrier -- Air Wisconsin wants to fly smaller jets for US Airways on a contract basis and Air Canada wants the right to bid for outsourced maintenance work.

The other three are investment funds hoping to make a return, and all are longtime investors in the airline industry.

The largest is Boston-based Wellington Management, which manages a portfolio worth $470 billion and serves as an investment manager to several Vanguard funds. It already owns 10 percent of Northwest Airlines, 13.8 percent of Continental Airlines and 8.3 percent of American Airlines, and is willing to put up $150 million to support the US Airways-America West merger. It declined comment this week about its investment choice.

Shapiro, the PAR vice president, worked at Wellington for seven years. It was Shapiro who also persuaded Ted Weschler, managing partner of Charlottsville, Va.-based Peninsula Investment Partners, to take a look at the merger.

Weschler came through with $50 million -- the smallest stake of the five new investors.

Shapiro and Weschler talk frequently about the airline industry, which led to the discussions about US Airways and America West. Of the two, Shapiro is more heavily invested industry-wide, with his equity fund owning 7.2 percent of American, 6.5 percent of Independence Air and smaller stakes in JetBlue Airways, AirTran Airways and Alaska Airlines.

PAR began buying America West stock not long after the 9/11 terrorist attacks. After adding to it in 2002 and 2003, the fund became the company's largest shareholder, owning 15 percent of its shares. It began selling its stake in 2004 and sold the remaining 600,000 shares earlier this year, well before the merger talks between US Airways and America West were disclosed.

Shapiro, who is expected to get a board seat, said he has no interest in controlling the new airline. "We are not planning on doing any airline maintenance in our office. It is purely a financial transaction ... We were attracted to the combination and the value we thought it might be able to create."

Weschler, who runs the $946 million Peninsula portfolio, has been following America West for 11 years -- he first bought stock in the company after it emerged from bankruptcy in 1994. He has since sold that stake.

Weschler currently owns no stock in any airline, according to federal documents, and he does not expect to get a board seat at the new US Airways-America West with his $50 million investment.

But he wanted to be part of the merger because he has so much confidence in the America West management team, led by Chief Executive Officer Doug Parker. "I like to back management teams that really do what they say."