any hope for USAir?

Comcast Mail wrote:
Actually, it is beginning to look like US Airways will be out of bankruptcy
by this summer. They've got their wage and operating cost cuts in place,
and should be out before United. So I wouldn't worry about them anymore. I
wouldn't have said that last week, but the unions have now all agreed to
more givebacks.

They said the same upon emerging from their Bankrupcy V1.0 and within a
yera, they plan had clearny not achieved anything.

They were supposed to reveal their real restructuring plan by Feb 15th,
but now this has been extended to march 31st (although US Air said they
may still be able to release it by Feb 15th).

Wages alone don't make a low cost carrier. US Air has had many years of
bragging about becoming a low cost carrier without doing much about
their operations.

They've only now announced that they will concentrate their call centres
into one location. That is a good sign. But if they just emerge from
bankrupcy without any real changes to the way they opertate, then it is
just a matter of time before they go back in bankrupcy.

Right now, all they have done is appease creditors with wage cuts. It
remains to be seen what they can do to really restructure themselves
with what they have.

nobody wrote:

Comcast Mail wrote:

Actually, it is beginning to look like US Airways will be out of bankruptcy
by this summer. They've got their wage and operating cost cuts in place,
and should be out before United. So I wouldn't worry about them anymore. I
wouldn't have said that last week, but the unions have now all agreed to
more givebacks.


They said the same upon emerging from their Bankrupcy V1.0 and within a
yera, they plan had clearny not achieved anything.

They were supposed to reveal their real restructuring plan by Feb 15th,
but now this has been extended to march 31st (although US Air said they
may still be able to release it by Feb 15th).

Wages alone don't make a low cost carrier. US Air has had many years of
bragging about becoming a low cost carrier without doing much about
their operations.

They've only now announced that they will concentrate their call centres
into one location. That is a good sign. But if they just emerge from
bankrupcy without any real changes to the way they opertate, then it is
just a matter of time before they go back in bankrupcy.

Right now, all they have done is appease creditors with wage cuts. It
remains to be seen what they can do to really restructure themselves
with what they have.



One thing that they have now managed it to significantly extend the
timetable for concern. They are now safe for the short term.

"Frank F. Matthews" wrote in
news
nobody wrote:
Wages alone don't make a low cost carrier. US Air has had many years
of bragging about becoming a low cost carrier without doing much
about their operations.

They've only now announced that they will concentrate their call
centres into one location. That is a good sign. But if they just
emerge from bankrupcy without any real changes to the way they
opertate, then it is just a matter of time before they go back in
bankrupcy.

Right now, all they have done is appease creditors with wage cuts. It
remains to be seen what they can do to really restructure themselves
with what they have.

One thing that they have now managed it to significantly extend the
timetable for concern. They are now safe for the short term.


I agree that they've extended the time table. And I think cutting wages
leads to significant cost savings. But I also wonder what the next step
is. Their weakened position, scaled-back route structure and poor
service do not make me think they can get back significant numbers of
business travellers. Also I doubt they will ever be efficient enough to
compete on price with WN, Fl, B6, etc. Maybe they still fly a few
routes that no one else wants, and can keep that core business, but the
result will be a much smaller airline, much smaller than the current
scaled-back one.

I know I've voted with my dollars. I'm mainly a leisure traveller these
days, so I won't represent much profit to any airline, but I can't see
myself giving any money to US. There's too much risk of a liquidation,
or a service outage by a disgruntled work force. On top of that, the
cost cuts they've made do not seem to have translated to price cuts, and
I recently did price them on a itenerary for travel in the next few
weeks. On the other hand, WN has some beautiful non-stop flights that
go right where I want to go, the lowest price, and has a work force that
wants to be there, brain-washed or not.

--lw--

Lee Witten wrote:
I agree that they've extended the time table. And I think cutting wages
leads to significant cost savings. But I also wonder what the next step
is.

Everyone wonders what their next step is.

OK, lets assume you enter Bankrupcy V1.0 and during this process, you
decide you will become a low cost carrier.

So, you look around and make a list of all areas where your current
airline is not competitive and announce a plan to fix every item on that
list and a new planned route structrure, fare structure etc.

US Air emerged from Bankrupcy V1.0 with no real plan to become a LCC and
it emerged simplyu because it had gotten financing to allow it to
emerge. Without a real restructuring, the airline had to quickly get
into Bankrupcy V2.0.

And now, it is talking about emerging from V2.0 and still no plan on how
it will transform itself into an LCC.

Since Bankrupcy V1.0, US Air should have had a plan on what it really
wants to become, somethint that works, not something that pleases
investors. (For instance, Air Canada buying 100 regional jets pleases
investors even though it raises average seat mile costs).


If they had had a clear plan of what they wanted to become, they would
have then listed specific items they needed from the workers to allow
this plan to be implemented (for instance, getting FAs to help cleanup
aircraft to lower number of cleaners and reduce turn around time to 30 minutes).

This is the core of the problem.

But for US Air, this seems to be just an afterthought, some necessary
evil, some 500 page report someone has to do to please the judge even
though as soon as it emerges from bankrupcy, that report is filed in a
rectangular metal container that is emptied every night.

The restructuring plan should have been the very first thing US Air did,
even before going into Bankrupcy V2.0. Not only would it have been
easier to convince employees that more givebacks were important, but it
would have shown employees exactly where the management intend to take
the airline.

In both US Air and United cases, management seem to be totally clueless
on how to make the airline ultra efficient and seem to only focus on
asking for wage concessions. It is natural that the employees don't
think that their management is very competent.


or a service outage by a disgruntled work force. On top of that, the
cost cuts they've made do not seem to have translated to price cuts,

In fairness to the airline industry, the high price of oil plays a big
factor in this.