Alphascan From United States of America, joined Nov 2003, 937 posts, RR: 13 Posted (10 years 2 months 6 days 22 hours ago) and read 3119 times:
Linked below is an interesting article on US Airways' new survival strategy. I applaud their efforts to concentrate on improving the service on the mainline and not taking their eye off the ball by creating an "airline within an airline" again.
That being said, I was shocked to see their CASM is still over 10 cents NOT including fuel expense. I have no idea how they rank in labor costs but it seems odd to me that their CASM is still considerably higher than DL's after the much publicized wage cuts. How do wages at US compare to UA and AA? Is there any more fat to be cut out of other expenses?
One thing is for sure. They won't survive with CASM that high and WN coming into their markets to cut their yields considerably.
Ssides From United States of America, joined Feb 2001, 4059 posts, RR: 21
Reply 1, posted (10 years 2 months 6 days 21 hours ago) and read 3038 times:
USAirways has consistently had the highest labor costs in the industry, primarily because their focus is in the Northeast. Three factors make this region a difficult place to do business, particularly for an airline: (1) unions are very powerful, especially in Pennsylvania, home to two US hubs; (2) the cost of living in the region is higher than just about anywhere in the United Staets, meaning higher wages; and (3) the region has been stagnant economically over the past decade, at least when compared to the rest of the country. All these things make it difficult for US to turn things around. A few years ago, USAirways flight attendants threatened to strike, rejecting a "Parity +1" pay package that would have made their pay 1% higher than flight attendants throughout the rest of the industry. With labor costs like these, it's no wonder their CASM is so high.
TOLtommy From United States of America, joined Dec 2003, 3276 posts, RR: 4
Reply 7, posted (10 years 2 months 6 days 14 hours ago) and read 2502 times:
US is facing the same problem. They've had the highest costs in the industry for years. But it was offset by the high revenue biz traveller. But like all the legacy carriers, they killed their golden goose. Their quest for lower distribution costs open all their fares to public scrutiny over the web. The public had begun to find ways around those last minute full Y fares when 9/11 occured. Thet drove the remaining biz travellers into their cars. The smart carriers are the ones who can be profitable carrying leisure travel. The biz travel is gravy.