Much of US Airways' predicament is entirely of its own doing, though! It appears that management's "strategy" is based primarily on getting the lowest pay rates in the industry -- below Southwest, jetBlue, AirTran, etc. -- to help balance out their high average seniority due to years of shrinking the airline. And the airline's management has pursued very questionable tactics in dealing with its unions.
For example, the company is trying to outsource the heavy maintenance of its Airbus narrowbodies, in what the mechanics view as a violation of their collective bargaining agreement. Given that the Airbus narrowbodies will, in future, be the vast majority of the fleet, it's clear that the company is trying to eliminate most of its mechanics from the payroll. Now, how likely is it that the mechanics would vote to grant concessions to a management team that doesn't even seem to be interested in honoring the terms of the existing contract? Similarly, it's been reported that the company has become more heavy-handed in its dealings with the flight attendants; again, how likely is it that employees who see a near-complete lack of respect by management will vote to grant concessions to that same management team?
What I find baffling as well is that US Airways management claims that it will find $700 million in annual cost savings/revenue improvements by restructuring contracts, streamlining operations (like depeaking PHL
, strengthening focus operations at BOS
), fare restructuring, etc. If they can improve the bottom line by nearly $200 million per quarter, I simply cannot see why this wasn't done six months or longer ago! "GoFares" have largely been a knee-jerk competitive response to WN
in Philadelphia and Independence Air in Washington; where's the innovation here? If GoFares are the future of US Airways, why are they noticeably absent in PIT
? Why hasn't US introduced GoFares on potential WN
routes from PHL
, JAN, STL
, ORF, JAX
, etc.) in order to deter WN
from adding service to those places in the future? Why is it that US is willing to sell a connecting itinerary from BDL
, or BUF
for $98 round-trip, and yet the lowest available BDL
fare (on the same flights!) is $302 round-trip? Wouldn't it make more sense to sell BDL
for $98 round-trip and simply not bother with eating losses between BDL
, US Airways has 19 mainline departures scheduled between 1515 and 1550, with a whopping two scheduled between 1555 and 1725 (to BOS
, which is hourly and PIT
, which is a hub). There are 32 scheduled between 1730 and 1815, and then 5 between 1820 and 1950. Does this appear to be a de-peaked hub?
If the market opportunities for the focus cities at BOS
, and DCA
are so attractive, why hasn't US Airways moved to exploit them? If Independence thinks that it can make money with high-cost RJ
's at reasonable fares from IAD
, why can't US Airways prosper with slightly higher fares (on lower-CASM mainline jets) from DCA
It's not just the cost of fuel and poor yields that are the problem; Continental has faced the same conditions with substantially more direct competition from LCC's and fairly heavy debt load, and yet seems to have not taken the "beatings will continue until morale improves" approach with its organized labor groups. They've had no qualms about attacking employee pay and retirement and yet have been perfectly willing to honor tens of millions of dollars in severance and retirement packages for upper management. What kind of message does that send?
"I read on this website that Dr. Bronner would do it whatever it took to keep US going..."
Don't believe everything you read on the web. He's also said that he'd be willing to shut the whole thing down without getting the concessions that management has requested. Twelve months ago, most analysts believed the network carriers would finally show a profit this year. Bronner's not going to continue throwing money into a pit in the hope that he might someday recover his investment. Remember that he has other ways of recouping at least part of his capital investment in UAIR -- leases that the company kept post-bankruptcy and income from the ATSB-guaranteed loans.