Complain about a product or service

January Crucial for US Airways

January 3, 2005
The news for bankrupt US Airways is not getting any better. In the wake of a Christmas Weekend that saw massive employee absenteeism, cancelled flights and lost luggage, the airline faces a January of increased competition and creditor demands that could spell its demise.

US Airways • Consumer Complaints • Christmas Complaints • An Insider's View --- News • Bankruptcy Exit Plan Ready • No More Pretzels In Coach • US Airways, America West Merger On Course • US Airways' Loss Worse Than Reported • US Airways Misses Another Bankruptcy Filing • US Airways, America West Talking Merger • US Airways Gets a Little More Time From Creditors • Report Slams US Airways Christmas Performance • US Airways Wins Concessions from Machinists • US Airways Turns In Jets, Cancels Flights • Florida: Treatment of Quadriplegic Passenger "Callous" • Loan Extension Provides More Turnaround Time • Attendants Accept Cuts, Machinists Still Hold-Outs • Machinists May Walk • January Crucial for US Airways • A Christmas Nightmare • Breathing Room • Turnaround Plans • US Air Deathwatch

The airline faces one such test this week. It must show its creditors that it has secured at least $1 billion in labor savings by cajoling employees to give up some provisions of their union contracts. Much of the concessions have already been won, but as last month's Christmas debacle revealed, employees are less than thrilled.

Three unions, including the Airline Pilots Association, have already approved over $500 million in givebacks. Flight attendants vote Wednesday on a revised contract saving the airline about $150 million. That leaves the union representing mechanics, baggage handlers and fleet service workers, who are trying to agree on $350 million in contract reductions.

Assuming US Airways is able to cut its costs enough to satisfy its creditors, it still has to survive in the increasingly competitive airline sector. And major players have already signaled it's about to get even more competitive.

Newcomer JetBlue, which offers low fares and high service, is cutting its fares even more. This month the airline is rolling out a cross-country fare as low as $85. Southwest Airlines, another low fare competitor, has indicated that it will match the new low fares. Even one of the so-called "legacy" airlines, Delta, is reportedly poised to offer a new round of fare reductions as it tries to compete with JetBlue and Southwest.

Keeping its planes flying will also be a challenge for US Airways because of rising fuel prices. The airline has budgeted for fuel based on oil prices of $44 a barrel. Even though prices have fallen from recent highs, industry analysts say every dollar oil prices above $44 costs the airlines an additional $2 million a year.

In the first three months of the year US Airways is scheduled to make major aircraft lease payments and renegotiate $700 million in loans. If it falters in any of these steps, the nation's seventh-largest airline could face immediate liquidation.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |

Terms of Use Your use of this site constitutes acceptance of the Terms of Use

Advertisements on this site are placed and controlled by outside advertising networks. ConsumerAffairs.com does not evaluate or endorse the products and services advertised. See the FAQ for more information.

Company Response Welcome If complaints about your company appear on our site, we welcome your response. Please see the Response Form for more information.

For more information, see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice.  ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof. 

Copyright © 2003-2009 ConsumerAffairs.com Inc.  All Rights Reserved.    The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission.