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US Airways Chief To Call For Wage, Benefit Concess  
User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6126 posts, RR: 34
Posted (10 years 4 months 1 week 4 days 22 hours ago) and read 4558 times:

US Airways Employees to Hear Plea for Cuts
CEO Will Make Case for More Concessions in Internet Speech Today

By Keith L. Alexander
Wednesday, March 24, 2004;

The head of financially struggling US Airways plans to appeal directly to employees today to agree to more cuts in wages and benefits.

Executives from US Airways declined to give specifics on president and chief executive David N. Siegel's speech, which will be made during a meeting with about 75 employees and broadcast to others over the Internet. Spokesmen for the airline's pilot and machinist unions who have been briefed on the speech said they expected Siegel to share details of the airline's restructuring plan.

In his latest weekly recorded telephone message to employees, Siegel encouraged workers to watch the meeting.

"This is a truly important time for all of us here at US Airways," Siegel said in the recording. "We're faced with some very tough choices. That's why I urge all of you and your families to view this webcast. My hope is this information will help you make some informed decisions. "

US Airways is trying to cut costs by at least 25 percent because, the company said, cuts of nearly $2 billion made while in Chapter 11 bankruptcy reorganization last year was not enough to make it competitive with expanding low-fare carriers such as Southwest and JetBlue. So far, only the pilots have agreed to talks on concessions.

Last year, the Air Transportation Stabilization Board, which Congress created following the Sept. 11, 2001, terrorist attacks to help stabilize the weakened airline industry, granted US Airways a $900 million loan guarantee to help it reorganize. US Airways recently made an early payment on its loan, securing more time to repay the balance. But as part of that new agreement, the airline has to reduce its costs this year, accumulate a cash reserve of $700 million by June 30 and report a profit next year.

Other traditional airlines also are struggling to return to profitability. Delta Air Lines and Northwest Airlines are trying to secure pay and benefit concessions from its pilots. And United Airlines -- currently reorganizing under bankruptcy protection -- last week said it needed more time to cut costs and doesn't plan to emerge from Chapter 11 reorganization until late summer. United had planned to emerge by June.

Siegel was expected today to address the increased possibility that US Airways will sell one of the airline's most prized assets, such as its Northeast shuttle or one of its hub airport operations, to raise cash. The stabilization board this month gave US Airways permission to sell any assets the airline deems necessary to raise cash.

Siegel is also expected to outline several crucial problems facing the airline.

First, fuel prices have increased to record levels. That means that the second and third quarters -- which usually are among the strongest periods for airlines because of vacation travel -- could be much weaker than had been expected by the industry.

Also, in May, low-cost rivals Southwest and Frontier airlines will begin service at Philadelphia International Airport, one of US Airways' largest and most profitable operations. US Airways must cut costs quickly to fend off the new competition by lowering its fares, adding routes and flights, or both.

"This is kicking off a campaign to bring more specific proposals to organized labor and to justify them to the employees. He's laying the groundwork for substantive negotiations," said Standard & Poor's airline analyst Philip Baggaley.

Today's meeting will be the first company-wide employee gathering Siegel has held this year. The meeting had been scheduled for earlier this year but was postponed after union leaders objected to negotiating with Siegel in view of statements by US Airways executives that the airline needed additional concessions from employees.

Today's meeting will be the first for US Airways employees to be broadcast on the Internet, said David Castelveter, a company spokesman. He said using the Internet was less expensive than flying around the country to meet with employees, factoring in Siegel's time away from the office, equipment rental and other factors.

Spokesmen for the pilot and machinist unions said separately that US Airways "hand-picked" about 75 workers to attend Siegel's hour-long presentation in person and the question-and-answer period afterward. Only those workers present will be able to ask questions; however, the airline said other employees could e-mail questions before the meeting.

Castelveter denied that the airline's executives picked the attendees. Instead, he said, supervisors from various operations were asked to solicit volunteers.

© 2004 The Washington Post Company


Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
33 replies: All unread, showing first 25:
 
User currently offlineAsuflyer05 From United States of America, joined Feb 2004, 2371 posts, RR: 3
Reply 1, posted (10 years 4 months 1 week 4 days 21 hours ago) and read 4503 times:

There was a meeting between the CFO and employees @ 1500 EST.

They are going to webcast the meeting at:
http://usairways.internetstreaming.com/

Matt

Edited becuase I am dyslexic

[Edited 2004-03-24 23:41:20]

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13518 posts, RR: 62
Reply 2, posted (10 years 4 months 1 week 4 days 20 hours ago) and read 4461 times:
Support Airliners.net - become a First Class Member!

Didn't we just leave this party?

Does Siegel expect employees to forego ALL pay and benefits and just do this on the side, sorta like a hobby?



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineAa717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 3, posted (10 years 4 months 1 week 4 days 20 hours ago) and read 4440 times:

Concessions are the path to true job security... Insane TC


FL450, M.85
User currently offlineAsuflyer05 From United States of America, joined Feb 2004, 2371 posts, RR: 3
Reply 4, posted (10 years 4 months 1 week 4 days 20 hours ago) and read 4415 times:

Highlights:

"...Southwest is gonna kill us...He wants our jobs..." - CEO of US
'Southwest killed TWA in STL with 8 gates. They are going to have 4 in PHL. They killed them because TWA waited too long. '

Following America West
- Comp. from Southwest
- Similar Fleet
- Fixed their company, making money, and growing again

Simplified fleet
- Get rid of turboprops, more Embraers
- Increased Utilization
- Dual class or Single Class?
- Growing the network, start being more offensive

Philidelphia is going to become a 'rolling hub'
- More point to point from LGA and DCA
- Less Cities
- Sticking with UA & Star

Inflight Product
- Considering Direct TV, Wireless Internet, etc.

Greater Technology
- More Internet Usage
- New website by end of year
- More kiosks
- bar code readers

and yes, lower employee costs.

I was impressed, he was serious but very hopeful. If I were an employee I would feel a little more confident because it gave some direction. Direction is something they seemed to be lacking. Sorta like a beached whale.

Matt

[Edited 2004-03-25 00:17:39]

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13518 posts, RR: 62
Reply 5, posted (10 years 4 months 1 week 4 days 19 hours ago) and read 4335 times:
Support Airliners.net - become a First Class Member!

'Southwest killed TWA in STL

No, Karabu and TW800 killed TWA.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineScootertrash From United States of America, joined Aug 2001, 569 posts, RR: 9
Reply 6, posted (10 years 4 months 1 week 4 days 17 hours ago) and read 4246 times:

Oh brother...

Nope, sorry Dave. The concessions stand is closed. This airline needs to look at productivity oriented improvements to save cash. If I am asked to give for a third time, my answer is NO.

Scooter


User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 7, posted (10 years 4 months 1 week 4 days 16 hours ago) and read 4182 times:

Hey Scooter what kind of puddlejumper do you drive for US??? Ive probably loaded one of your flights at one point or another depending on what part of the country you fly in. Yeah I believe the upper people have to take a huge cut, I could understand employees giving into cuts once, two times was asking a bit much, and now a third time i'm not to sure about that one either. I didn't like Seigal from day one and never felt secure with him in charge

User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 35
Reply 8, posted (10 years 4 months 1 week 4 days 16 hours ago) and read 4175 times:

You US Airways employees do realize do you not that by failing to agree to concessions you'll make yourself obsolete? This is Eastern Air Lines all over again. If you can't understand history enough to see how employee gread (on the part of the mechanics) killed EAL and realise that now is the time to agree to short term concessions in order to secure the long-term future of your jobs, then to be frank you deserve to be out of work. The company is no. 1, not your paycheck.

-WGW2707


User currently offlineAlpha 1 From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 4 months 1 week 4 days 16 hours ago) and read 4155 times:

As much as I'm not a fan of unions, I have to agree with Scootertrash on this one. US simply can't go to the well any longer and ask employees for even more. Siegel isn't a bad manager, but he inherited a mess, and it's way beyond control now.

I don't know what the answer is for US, but there's only so often you can go to the employee well, without it being bone-dry.


User currently offlineSydscott From Australia, joined Oct 2003, 2930 posts, RR: 20
Reply 10, posted (10 years 4 months 1 week 4 days 16 hours ago) and read 4122 times:


Following on from Asuflyer here is an article from forbes.com

If they're 40% more expensive than their competitors then US Airways will die.


US Airways still needs major cost cuts - CEO
Reuters, 03.24.04, 4:14 PM ET

CHICAGO, March 24 (Reuters) - US Airways (nasdaq: UAIR - news - people) Chief Executive David Siegel said on Wednesday the airline still needs to reduce costs dramatically, adding that he is willing to make sacrifices along with employees at the No. 7 U.S. airline.

In a company update broadcast to employees over the Internet, Siegel said US Airways needs to reduce unit costs from 10 cents to 6 cents and have new labor agreements in place by this summer to compete with low-cost carriers that are gaining market share.

US Airways, which emerged from bankruptcy a year ago, still has among the highest unit costs, or costs per available seat mile, in the industry. Low-cost carriers have unit costs in the 6-cent range.


User currently offlineNIKV69 From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 4 months 1 week 4 days 15 hours ago) and read 4096 times:

When are the executives going to start taking pay cuts? They make me laugh, going to the people who bleed and sweat for the airline over and over again. I am also sick of this "think of the company before yourself" crap. How in the world are they going to compete with WN and Blue? There is no way. I don't see it, unless the pilots, FAs and ground crew all work for $8 an hour with no benefits and Embraer decides to just give them 50 planes. Long term I think USAirways is doomed. They can not fly for the same fares as WN, Blue, Song, Ted, Frontier or any others and if someone doesn't want to fly the LCC they will just fly CO or someone like that. I know this is terrible to say but it's time USAirways went belly up, at least they will be put out of their misery.

User currently offlineScootertrash From United States of America, joined Aug 2001, 569 posts, RR: 9
Reply 12, posted (10 years 4 months 1 week 4 days 15 hours ago) and read 4067 times:

Freshlove1:

I drive the Dash 8 for one of the Wholly-Boneds... I mean Owneds. If you have chucked bags on a Dash, chances are we have exchanged greetings over an OF-11 or two.

WGW2707:

I am well aware of the possible consequences of refusing yet another round of painful concessions. I am out on the pointy end of the spear every day, and if I thought for one second that US Airways Group had made every productivity oriented change that was necessary, I would be allot more likely to pony up the cash. Siegel only knows one song it seems: It is the employees fault our CASM is as high as it is. Nope, not entirely accurate Dave. Not by a long shot.

Now, here is where I part company with my mainline brethren. I do think there is something that the unions can and should do to save this company. If the employees of US Airways mainline need to concede anything, it is some of their inefficient and costly work rules. A good example is this: Southwest employees about 4 mechanics per airplane as where US Airways employees 12. This is due to the work rules provided under the mechanics contract. All of the major employee groups at the mainline demonstrate equally startling inefficiencies. While I feel for the furloughees, it is time we nodded to the new economic reality: Do more with less and for Pete's sake be as efficient as you can. Simply slashing pay and benefits is not the answer because it does not cure the core problem with this company: Systemic inefficiency.

Note that I am talking only about US Airways mainline employees here. At my part of the company, one of the wholly-owned express carriers, our pilots fly more than any other pilots in the industry, no exaggeration. We fly double the hours of the mainline pilots. We are leaner and meaner, and our part of the company has never lost a dime. Asking Express employees to give again is not just unnecessary, it's immoral. We were doing this LCC thing long before anyone was talking about LCCs.

Another thing US Airways could do to save cash? Institute rolling hubs... NOW! Nothing would go further to save fuel, and that is our biggest variable cost right now. Especially in Charlotte... There should never be a time it takes me more than six minutes to get off the ground after leaving the gate. Yet for months I have been stuck in the last two pushes of the day, waiting for 20-40 minutes to get off the ground. That is burning cash, a whole lot of it.

In conclusion WGW2707: Short term wage concessions won't do jack to save this place. Only fundamental changes in how we do business will.

Scooter


User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 13, posted (10 years 4 months 1 week 4 days 15 hours ago) and read 4052 times:

Good point Scooter, why don't we kick sweet dave and his boys out and put you in charge. Your right Express , no matter what compnny has never lost any money for US and we do work twice as hard. I used to work for mainline in MDT, i'm an express guy now thank god!! and those guys were the laziest guys I knew. 20 sumthin' bucks an hour to read the paper and do nothing and they were proud to talk about it, while the new hires at 9 bucks an hour are moving airfrieght, baggage from a 734/733, running mail, ect. Ask them for help and it was like pulling teeth. I remember one very very cold A.M in MDT, we were loading a 737 to PIT and it was full, we needed some help putting the bags on the belt loader, so we asked the guy, who was a ramper, in the push back tug if he could help, he was like "no i've been here way longer then you and paid my dues, I don't load bags anymore I just push em' back". All of us were like "F-YOU!!". Maybe if he got off his 20+ dollar an hour ass and helped it would have gone out on time. Thats the type of people we don't need in this company, oh yeah he carried that union book around like it was a bible, and when ever he was asked to do something he looked in it to see if it was under his work description.

User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 4 months 1 week 4 days 14 hours ago) and read 4017 times:

The company is no. 1, not your paycheck

How many airline employees (regardless of airline) do you think believe this, and what is the likelihood that they would start to believe that?

No. These days, people vote with their paycheck, whether it's for wage concessions or in a presidential election. Bottom line. The days of company loyalty are long, long over.

I like my company, (not an airline) but I'm only looking out for me. At the end of the day, I have to look at myself in the mirror and answer to only me, no one else, and sure as hell not my company.

US Airways employees have done their part already. They got shorted because they weren't given a solid business plan, and the initial wage cuts they gave the company were squandered. Plain and simple. They're right by saying the concession stand is closed.

US Airways made it's bed, now it has to lie in it.


User currently offlineFreshlove1 From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 4 months 1 week 4 days 14 hours ago) and read 4017 times:

Nice to see that the guy in reply 11 would like to see us all lose our jobs. He obviously has a personal hate for US. Well if you don't like US then go and fly WN with the rest of the trailor trash/drunks that do and watch your show "airline" every monday. Maybe you can go fly CO, which you seem to think is the best airline out there and become buddy-buddy with your boy Gordon, i'm sure he would love to hear what you have to say considering you seem to know so much about the airline industry. Your a golf "professional" you say, so stick to golf and try to get under par and keep your useless comments off A.Net

User currently offlineWGW2707 From United States of America, joined Aug 2003, 1197 posts, RR: 35
Reply 16, posted (10 years 4 months 1 week 4 days 14 hours ago) and read 3990 times:

I agree with FreshLove, and to some extent, with Scootertrash. Improvements in efficiency are neccessary. I'd also state that concessions should be more heavily required from employee groups who are less productive or who have given fewer concessions than employee groups such as the Express pilots who currently achieve such high marks in terms of productivity and efficiency. The goal should be to trim the wages where they should be trimmed, as opposed to causing a drop in moral by trimming all wages equally, which would not be fair to some employees who work harder than others.

-WGW2707


User currently offlineNorthwestair From Poland, joined Jul 2001, 648 posts, RR: 5
Reply 17, posted (10 years 4 months 1 week 4 days 13 hours ago) and read 3962 times:

Dob't worry US employees your not alone in this I know NW is asking us for paycuts. I think Upper Management needs to stop and think we (airline Employees) have a family to support. The Company can cry wolf only so many times. And I think US has Cried Wolf one to many times. Good luck US Employees I know you guys will survive if you stick together.


I don't care who you fly just as long as you fly
User currently offlineAsuflyer05 From United States of America, joined Feb 2004, 2371 posts, RR: 3
Reply 18, posted (10 years 4 months 1 week 4 days 13 hours ago) and read 3942 times:

The entire meeting is 60 minutes long. In it Siegal addresses some of the very issues you are all addressing not just wage cuts. He mentions more flexible work rules to increase productivity. The other thing he mentions is product differentiation. They are looking at how they are going to separate US Airways from the rest of the industry. They need to give customers a reason to fly US over Southwest, CO, etc. This is a fundamental shift in the vision US has had for its operation. It's the same corner HP and CO turned. They are refocusing on their customers!

The company is no. 1, not your paycheck.

NO customers are No. 1. When front line employees show the customer they are appreciated, they automatically help the company. Incentive pay is something that succeed for CO and now HP. Why can't it be implemented at US? Wanna see ramprats and CSRs work their butts off to push a flight on-time, give them $50 for every month US is in the top 3 in on-time performance. It works for HP and CO. Want to improve employee attendance? Give each of them who doesn't miss a day of work an entry into a drawing for a new Ford Explorer each quarter. It worked for Continental.

Need other suggestions? Give an employee $10,000 every time they recommend a cost savings program that reduces costs by more than $500k. It worked for the U.S. military.

Want to see US execs and MBAs work their butts off to turn the company around? Tie their pay to company performance.

But most importantly, they need to set realistic goals. Everytime they achieve a goal, they set the bar higher. It is something I learned from running my company.

Matt


User currently offlineDC10GUY From United States of America, joined Feb 2000, 2685 posts, RR: 6
Reply 19, posted (10 years 4 months 1 week 4 days 12 hours ago) and read 3909 times:

I'm sure there are lots of things that could be done to save US airways. But the truth is Usairways is the new Eastern. Simply put they need to go. The 12 mechanics per plane is a good reason. They have so many different types of aircraft it makes all parts of the operation too bogged down to be worth fixing. Southwest only flies 1 type of airplane and Usairways couldn't match there ground operation in 5 + years even if they had the cash to try. Pull the plug let them die. If nothing more for the health of the rest of the "high cost carriers"


Next time try the old "dirty Sanchez" She'll love it !!!
User currently offlineH53Epilot From Israel, joined Mar 2004, 177 posts, RR: 2
Reply 20, posted (10 years 4 months 1 week 4 days 12 hours ago) and read 3900 times:

"Thats the type of people we don't need in this company, oh yeah he carried that union book around like it was a bible, and when ever he was asked to do something he looked in it to see if it was under his work description."

IMHO, that union philosophy is a major reason why employees will never win long term in this industry.


User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 21, posted (10 years 4 months 1 week 4 days 11 hours ago) and read 3873 times:

Anyone ever tell this joker that having the thrust of your service based at two hubs less than 300 miles a part is a bad thing?

User currently offlineUsair330 From United States of America, joined Mar 2002, 820 posts, RR: 1
Reply 22, posted (10 years 4 months 1 week 4 days 10 hours ago) and read 3855 times:

Ok, many of you will see that I am young if you look at my profile. I'm only 18 years old and really started learning about aviation in 2000. I've liked US Airways ever since I joined Airliners.net, at first because of the colors and the fact that they're the dominating airline in Philadelphia. But the more I got hooked to this forum the more I learned about US Airways. And although I've only been on this forum since 2000, I can honestly say that alot has changed. When an airline was on the verge of liquidation (TWA comes to mind) It was a sad thing to see that airline go. Now all I see in alot of these post is *US Airways days are numbered". Alot of yaw don't realize that these are peoples jobs we're talking about. It's not easy now and days for an employee from a liquidated airline to say "Hey that's ok the other guy will hire me". But back on the subject.

Again I'm no airline CEO but by watching that 1 hour clip, David Siegel looks very confident about his plans for US Airways in the future. He's not gonna run off and let the other guy win the fight, they're gonna play chicken until one turns. In that clip he mentions how he himself will take a paycut and make the same amount as a CEO for a low cost carrier. He understands that there's a problem and he's gonna fix it to the end. I like the fact that he says "Everyone is gonna participate" in the restructure of the airline "There are no exceptions". That's good that he isn't gonna play favorite! The paycuts is definately something that has to be done for the 3rd time.... maybe it can either be 3 strikes your out or a full count and hitting a home run with bases loaded! Now I don't work for US Airways at all but I don't understand how some of these employees (No disrespect to ScooterTrash) wont take the paycut again. Yeah I'm sure its gotta be frustrating but its either take the paycut and make less money or end up in the unemployment line or as I seen on a 777 documentary, go on walfare.

All I'm really trying to say is that it would be sad to see another airline go, especially US Airways. I wish all the employees the best outcome, hopefully a certain spot will be taken back and US Airways can be the #6 airline again or even #5,4,3 etc.


User currently offlineNIKV69 From , joined Dec 1969, posts, RR:
Reply 23, posted (10 years 4 months 1 week 4 days 7 hours ago) and read 3814 times:

FreshLove,

Give me a break please, my Dad worked for EAL for 30 years and I am training to get my pilots license so don't even think I do not know what I am talking about. USAirways has become the biggest drain on everyone, your debt is HUGE, your fares are a joke and the LCCs are killing you. If it wasn't for all that money the government gave you after 9/11 you would have been a memory a long time ago. If all the employees took huge cuts again it would make no difference. As for CO maybe your CEO should buy Gordons book, he may learn a thing or two because at this point USAirways is a sinking ship. To just take more and more from it's employees will not solve a thing. I do not fly WN regularly and if you are going to group all their pax as trailer trash you are showing your naivete. Yes CO is one of the best airlines going so don't hate Gordon for being a success. Maybe you should get your resume together and send it to him, could be a good career move. CO has new planes, great service and great fares. Need I say more?



User currently offlineIfly2eat From United States of America, joined Apr 2008, 8 posts, RR: 0
Reply 24, posted (10 years 4 months 1 week 4 days 6 hours ago) and read 3786 times:

Mr. Siegel is being paid $600,000 a year by USAirways. I ask you all this, if a pilot crashes an airplane, a ramp agent always forgets to load the connecting bags on the plane, or a reservation agent books passengers on the wrong flight, how long would they have their jobs? In my opinion he is not doing his job. Siegel is just another in a long list of "fish oil salesmen" in this industry. How many times have you heard this, give up some pay and stick with me and we'll make it." It is never quite the same line but always a version on the same theme. I have had countless friends lose their jobs at US and it even caused a very good friend of mine a divorce. So while I am not directly involved, this whole issue is very real to me. Eventually, it will be better financially for USAirways employees to take unemployment than to go to work for Siegel's company. Every quarter since he took over (check it out for yourself) Siegel issues a press release when the company loses money. Every press release is the same, low cost carriers are killing us, fuel prices are high, and the economy is bad. I suggest Mr. Siegel look inwardly for a fix and quit blaming other carriers, employees, fuel prices, and the economy. Here's an idea, get rid of Siegel, that will save US at least $600,000 a year.


Fly the friendly skys and stay out of mine.
25 FraT : "As for CO maybe your CEO should buy Gordons book, he may learn a thing or two because at this point USAirways is a sinking ship." NIKV69, correct me
26 NIKV69 : Mr Siegel is not totally to blame, you are right FraT, USAirways simply can not compete with WN or B6. Not to mention they have a mountain of debt. I
27 TOLtommy : Ifly2eat - I'll accept your statement that Siegle makes $600,000/year. I'll also accept that he's probably not the person to lead the turnaround at US
28 Spoon04 : It's very easy for individuals who have not worked in the airline industry to express themselves pertinent to what they perceive as very clear-cut "b
29 Bicoastal : Maybe the request/threat/demand for wage and benefit concessions is a bargaining ploy to get the necessary productivity and work rule changes? If I we
30 Ramerinianair : Karabu and Ichon Killed TWA; WN helped. EA CO AS, Good Call -S.R.
31 Beltwaybandit : Spoon04: When the two "sides" (labor/management) cannot get past the "whose-fault-is-it?" debate, they are both doomed. The sins of past and current m
32 Spoon04 : Beltwaybandit: "The sins of past and current management have no bearing". With all due respect, again, the question remains: Exactly how many rounds o
33 NIKV69 : There comes a time when you have to realize that it's time to fold. At this stage even if the employees gave everything USAirways can not survive. I t
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