alphascan
Posts: 795
Joined: Mon Nov 24, 2003 12:04 am

US Airways New Survival Strategy

Sat Feb 14, 2004 5:00 am


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.


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"To he who only has a hammer in his toolbelt, every problem looks like a nail."
 
ssides
Posts: 3248
Joined: Fri Feb 09, 2001 12:57 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 5:31 am

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.
"Lose" is not spelled with two o's!!!!
 
AA717driver
Posts: 1502
Joined: Tue Feb 12, 2002 8:27 am

DL Ch. 11 Counsel?

Sat Feb 14, 2004 7:03 am

I believe U's pilot pay is about the same as UAL's. Plus, they aren't paying out retirement benefits.

The labor costs cannot possibly be the root of the high CASM. If they are, their bankruptcy lawyers and CEO should be shot.TC
FL450, M.85
 
NIKV69
Posts: 10889
Joined: Wed Jan 28, 2004 4:27 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 8:20 am

It's an uphill battle, this spring will be key for USAir, I think WN starting service in Philly this May is going to be the final nail in their coffin. If they can survive that well who knows..
Hey that guy with the private jet can bail us out! Why? HE CAN AFFORD IT!
 
ConcordeBoy
Posts: 16852
Joined: Thu Feb 01, 2001 8:04 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 8:25 am

Its costs per available seat mile, or ASM -- a common benchmark in the industry -- were $10.22 in the fourth quarter of 2003

hmm, a ten dollar CASM.... correct me if I'm mistaken: but aren't Eastern's, PanAm-I's, and Vanguard's CASMs all lower than that?  Big thumbs up


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[Edited 2004-02-14 00:26:56]
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
N670UW
Posts: 1441
Joined: Mon Jul 21, 2003 9:55 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 8:38 am

Its costs per available seat mile, or ASM -- a common benchmark in the industry -- were $10.22 in the fourth quarter of 2003



Clearly a mistake in the syndicated article. The real article from the PIT PG is here...

http://www.post-gazette.com/pg/04044/272452.stm

...which displays 10.22 cents.




670
 
elwood64151
Posts: 2410
Joined: Fri Feb 08, 2002 10:22 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 9:16 am

Actually, NJ's CASM was lower than 10.22 cents per mile. The real problem was revenue...

Cheers!
Those who fail to learn history are doomed to repeat it in summer school.
 
toltommy
Posts: 2463
Joined: Tue Dec 09, 2003 9:04 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 12:06 pm

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.
 
USAir734
Posts: 56
Joined: Fri Jan 09, 2004 6:12 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 12:14 pm

Pretty refreshing considering the last news i heard from USAir; selling off shuttle, possibly a hub and certain Express routes.
 
NWAFA
Posts: 1843
Joined: Wed Dec 31, 2003 10:30 pm

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 12:16 pm

I just hope US makes it! WN saw a week place and pounced on it..as much as I dont like WN, it was a strong business move.

Keeping my fingers crossed for US! They can do it!
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toltommy
Posts: 2463
Joined: Tue Dec 09, 2003 9:04 am

RE: US Airways New Survival Strategy

Sat Feb 14, 2004 12:21 pm

Posted by NWAFA-

"as much as I dont like WN"

----------------------------------------------

Yet in another thread you talk about how you've commuted on them for years. How nice of you to spit on the hand that flies you to work.

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