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US Airways ... Awaiting Fate

Fri Dec 19, 2003 3:52 pm


In recent days there has been so very much talk concerning US Airways and their inability to pull themselves out of financial doldrums. The airline now is seeking further funds from the U.S. Government and for some reason is continuing to build routes even though the airline is in a financial free-fall!

In regards to the financial aide given to the airlines by the U.S. Government aren’t the airlines supposed to pull themselves out of financial failure and prove to the government that they have used the money wisely and corrected their problems. It would seem as if any money given to US Airways at this juncture would be money thrown away as the airline has gotten itself into worse financial shape now than post 9-11!

Should United Airlines pull out of Bankruptcy will United Airlines play a hand and grab some of US Airways lucrative East Coast markets, not only United... But wouldn’t American Airlines, Continental Airlines, Delta Airlines, Northwest Airlines all want a piece of US Airways should the airline fail due to not securing additional government funds?

Philadelphia, Pittsburgh, and Charlotte have truly been made due to US Airways. It would seem as is the most to gain from this would be the lucrative Trans-Atlantic flights from Philadelphia. In addition would be the monopoly held at La Guardia, and Washington Reagan! Could we quiet possibly see America West, JetBlue, and Southwest Airlines move into Philadelphia, Pittsburgh, or Charlotte and take what would be abandoned by US Airways?

Any Thoughts?

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RE: US Airways ... Awaiting Fate

Fri Dec 19, 2003 8:57 pm

I disagree with much of your post. In fact it has been rumored that US will take some of UA's assets (gates and maybe planes) as UA continues to do everything necessary to emerge from bankruptcy. A reason US might want to close PIT, is they know they can move those assets west to maybe ORD or DEN.

Southwest is already coming to PHL. You will not see a monopoly at LGA or DCA, the government won't allow it. And after American West just anounced a mini-focus city at LAX, i think the chances of them of starting a focus city at PIT(was rumored) is slim to none.
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RE: US Airways ... Awaiting Fate

Fri Dec 19, 2003 9:14 pm

I hope US Airways don't go under. I've travelled their Transatlantic routes from LGW to PIT and PHL a few times and always found their service to be good.
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RE: US Airways ... Awaiting Fate

Fri Dec 19, 2003 9:36 pm

PanAm707320B I also hope that US Airways don't go under because I hate hearing about airlines have stopped flying. US Airways have had a wonderful history
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RE: US Airways ... Awaiting Fate

Fri Dec 19, 2003 9:55 pm

I would be nice to see them survive, I must admit. They are becoming a household name in the Caribbean. THey have indeed replaced AA in some islands. Their transatlantic serviceis great from what I hear, so it would be swell if they can build on that and become a major competitng carrier.
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 5:14 am

USAirways85: How could US possibly buy more gates and planes? They're in even worse shape than UA! A rumor...exactly that. It makes no sense whatsoever.

US management just reaffirmed it's intention to stay at and maintain its hub in PIT, so it won't be closing anytime soon.

US is going to have to do something drastic, soon, because if they are asking for MORE labor concessions (good luck) and more government loans (good luck) that clearly states their restructuring efforts have failed to turn things around so that they are operationally profitable (EBITDAR). Hopefully they can make it through the rest of the winter and spring, and reposition themselves to take full advantage of the summer 2004 travel season.

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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 5:18 am

I wasn't aware that they were asking for more government money.

I don't see US Airways moving anything to ORD or DEN. United has secured exit financing, and things are looking better (it seems). One would think UA would need those assets (ORD, DEN) to emerge from bankruptcy and still be a viable airline.

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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 5:27 am

It was Frontier that just announced the mini-focus city at LAX.

I think US is focused on a Star/UA tieup as a solution to their problems. Maybe Bronner thinks he'll buy part of UA on the cheap. But I think US needs to focus on becoming the Low Cost, Low Fare, High Value carrier of choice along the east coast and transatlantic. Right now they think the high fare paying pre 9/11 customer is just waiting to come back and drop $1000 for a day trip from PIT to ALB. Those days are gone.
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 5:29 am

There restructuring effors have failed. What have they done in the past year to get back on track, nothing. They had that brilliant RJ order, it's a shame the delivery dates keep getting pushed back, now at March.

Just from a business standpoint i just don't see how PIT and PHL can be maintained as major hubs, while only a few hundred miles away from each other. Granted i am not saying they should just leave PIT and move to PHL which would cause chaos at PHL, but it just seems to me that US cannot make enought money at the PIT hub to keep it profitable. They are asking a for a large cutback in costs at PIT and why receive those breaks(probably not as many as they want), then come back a few years down the road and once again complain that the costs of flying out of PIT are too high.

Airlines are consistantly adding and dropping flights at airports and hubs:
AA has added quite a few flights this winter to BOS and MIA
AA just cut STL in half
Delta over the years eliminated their PDX hub and as transfered much of their DFW hub to RJ's
US has done nothing to take advantage of its route structure. Way back when they rejected the PIT leases, they should have transferred some planes at PIT to BOS, LGA, and DCA to take advantage of those profitable northeast markets. What did we do...we waited and now there is a LCC craze at these airports. Song and Jetblue have jumped on BOS and Airtran is jumping on DCA.
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 5:40 am

I'm only saying this on what I've read, and my own observations...

Not that US has nothing to worry about, but I believe that UA will go down before US does.
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 6:06 am

US' outlook is not good. Their employees have valianty given all that they can reasonably give. I'm not sure that US mgmt's plan has been failed as much as the whole competitive situation has just deteriorated under US. The east coast has become an extraordinarily brutal battleground - not unlike what existed on the west coast 10 years ago. In this business, being wounded is an invitation for everyone else to come in and beat the living downlights out of you and then pluck anything valuable from your hands.

I'm not sure that there are any good answers left - except perhaps an acquisition by someone who sees a PHL and CLT hub as valuable - but w/ alot less of the corporate overhead that adds costs to those hubs.

My take on possible acquirers:
1. a European airline - several are possible; US is well positioned to support a European airline
2. UA - while rumors swirl that UA might get pulled into the mix to protect RSA's investment, I doubt if the rest of UA's creditors are interested in taking on any more risk as part of UA's restructuring. UA will be hindered in its ability to expand for years after getting out of bankruptcy.
3. AA - my top choice. AA should have not wasted its efforts on TW. CLT is exactly what AA has tried to do in the SE for 15 years. AA is pretty badly damaged financially. Fleet integration etc is a huge issue.
4. NW - could be a surprise savior. If NW decided to break away from CO and DL, CLT and PHL would go a long ways to making NW a viable standalone airline w/ a strong network and compatible fleet. No balance sheet superhero.
5. CO - same for partnership w/ DL. only CLT would be of interest. no fleet commonality; financially strapped. PIT could work in place of CLE w/ a heavy RJ focus; PIT would be willing to give alot of concessions if US failed.
6. DL - ditto on partnerships; only PHL would be of interest. ditto on fleet. While DL hasn't turned things around operationally, it could support a PHL related asset acquisition and would probably downsize JFK - at least internationally.
7. Joint acquisition by CO/DL/NW w/ a willingness to dissolve their partnership.

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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 6:26 am

For everyone in here who is dreaming about US Airways become some kind of glory airline, regaining the good old days... Dream On!

Why on Earth would US Airways be looking at buying gate space at O'Hare of Denver?

Why would they be looking into buying part of United Airlines?

US Airways has been near broke for some 3 or more years now! US airways keeps asking its workers for wage concessions, and the government for more money! If US Airways is going in any direction it is down the cutting back direction. US Airways the other day made a statement that they have no plans what so ever to dismantle the Pittsburgh hub.... One problem though.... Where are they getting all of the money to keep Pittsburgh operational as a hub destination?

US Airways keeps delaying the order or aircraft both maniline and regional! Us Airways keeps adding more routes with lack of funds! How is this airline even keeping its head above water!

To those of you that say United Airlines will go before US Airways will go think twice. United Airlines can sell of its London/Heathrow routes and Asian routes. They would make a enormous bundle on the sale... problem... United Airlines will sell neither one of the route structures as they are the most profitable! United Airlines has maintained a presence on the West Coast and continues to make a profit as well! US Airways bought PSA and then ran back to the East Coast! Bad idea.... What US Airways left on the West Coast has become the sucess of Southwest Airlines!

Look for example at airlnes and their recent cost-cutting reductions-

American Airlines
St. Louis capacity reduced to near half of TWA original route structure. Many maniline American Airlines flights are reduced to American Eagle. International and Hawaii services from St. Louis have been discontinued!

Delta Airlines
Dallas Ft. Worth reduced to nearly all Delta Connection service. The Dallas/Ft. Worth hub no longer feeds service to Hawaii. The hub is now more of a focus city!

Portland reduced to near nothing. Asia services have been totally discontinued!

Salt Lake City reduced more and more every month as more flights are being turned over to Delta Connection. No plans what so ever for any international growth from Salt Lake City.

Northwest Airlines
Los Angeles-Hawaii services have been moved to Seattle!

San Francisco, Seattle and Honolulu to Tokyo/NRT have had the equipment size drop significantly from 747 to DC-10 operations!

United Airlines
Los Angeles routes to Auckland, Hong Kong, Osaka, Melbourne, and Paris have all been discontinued. In addition Los Angeles has been de-bunked as a United Airlines hub in comparisson to the ongoing growth that United Airlines is focusing on San Francisco its original West Coast operational base!

Chicago slated service nonstop Chicago to Delhi has been postponed indefinitely! Chicago however has seen the resumption of service to Hong Kong and Beijing! Chicago is also due to restore the 747-400 on service to London/LHR!

Denver is to eb the homebase of TED , a new low fare airline that lies within the United Airlines route structure. TED, is due to be a competitior to both Song, Jet Blue, Frontier, and Southwest Airlines. United Airlines has discontinued service from Denver to Frankfurt in lieu of the Lufthansa daily nonstop service to Frankfurt.

San Francisco to Sydney has been reduced from daily to 3 x weekly! San Francisco is slowly but very surely retaining its one time mega-fortress feel for United Airlines. Recently plans have been put in place to restore the 747-400 on services to London/LHR. In addition the Asian routes that were discontinued post 9-11 are being restored!

Washington D.C. has seen the discontinuation of service to Zurich, Milan, and Dusseldorf. Furthermore United Airlines has maintained that Washington/IAD will remain their primary gateway to Europe.

It would seem that even though united Airlines is having financial problems... US Airways has a lot more to do! US Airways cannot be compared to United Airlines as US Airways route structure is limp and pathetic compared to United Airlines. US Airways has no presence in South America, Asia, Hawaii, Alaska, Australia or London/LHR! Furthermore US Airways s now relying very heavily on United Airlines to feed its West Coast traffic. US Airways focus city at Los Angeles has now been reduced to only a few mainline services a day.. Nothing special!

GOOD LUCK US AIRWAYS.... you have a mighty mountain to climb!

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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 12:01 pm

I aggree, US has done nothing to improve it's route structure. While other airlines have adjusted to move operations where the money is, US does nothing. US does have the shuttle and LGA/DCA slots don't forget.

Just one correction, US never had a focus city at LAX. The only flight that i can think of that has been discontinued is LAX-BWI. PHL/CLT/PIT-LAX all remain and operate several daily
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 12:15 pm

I hope that US Airways survives. We need the competition and I want the flying public to have as much choice as possible when it comes to choosing airlines.

US Airways' problems go back about twenty-five years. It is essentially a conglomerate of regional carriers--Allegheny, Mohawk, Lake Central, PSA and Piedmont with an extensive route network in the Northeast that has a low profit margin, a hub (PIT) that is just not working and poorly placed--PIT always seems to be having weather problems, more so than ORD or even New York City. In addition, taking over Piedmont was not a good idea--it just gave the airline more unprofitable routes that it has to fly, under the terms of the merger.

What should have happened was this: When Allegheny changed its name to USAir in 1979, it should have dropped a number of its commuter routes, such as to Ithaca and Elmira and focused on trunk routes. It should have closed its hub at PIT and moved those operations to PHL. In addition, it should have established additional hubs in the South and Midwest. It also should have simplified its fleet early on and purchased the 757 and 767, to keep the fleet up to date. Finally, I would never have retired the old triple-red color scheme. That was a classic and easily recognizable.

Again, I hope that US Airways makes it, but the chances of it once again being a successful carrier are slim unless it gets a leader who can reinvent the airline from the ground up.
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 12:22 pm

I used to fly US alot. They forgot their F/C passengers...they only want to fly regional jets. USAirways will not last....
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 12:35 pm

Say goodbye to US Airways ... their days are numbered!
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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 12:36 pm

a hub (PIT) that is just not working and poorly placed--PIT always seems to be having weather problems

Ha! Pittsburgh doesn't experience nearly the weather problems (especially during the winter) that cities like Philadelphia experience. For one, PIT doesn't have to deal with several noreasters each winter. Plus, PIT is not in the congested NE ATC corridor.

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RE: US Airways ... Awaiting Fate

Sat Dec 20, 2003 1:38 pm

USAirways85...US did have a heavy regional operation out of Southern California up until the mid-to-late 1990;s, and LAX was a major part of that...

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