US Airways announced today that
Rakesh Gangwal has resigned from his position as President and Chief Executive
Officer of US Airways Group, Inc. and US Airways, Inc. Gangwal's departure is
based upon his decision to work in the field of private equity and venture
capital.

US Airways Group Inc. (news/quote) (U.N), the sixth-largest U.S. airline, said on Tuesday that chief executive Rakesh Gangwal has resigned and will be replaced by chairman Stephen Wolf, a move that comes amid speculation that the firm may be forced to sell its assets, or file for bankruptcy.

Gangwal became chief executive of the company in 1998, overseeing the firm's failed $4.3 billion takeover bid from UAL Corp. (news/quote)'s (UAL.N) United Airlines this year and a restructuring in which 11,000 jobs were slashed in the wake of the Sept. 11 jetliner attacks.

The Arlington, Virginia-based company posted a net loss of $766 million for the third quarter ended Sept. 30, as the air attacks and recession weighed on the airline industry.

Some analysts said Gangwal's departure suggested that the company may have little future as a stand-alone carrier. The CEO, who was also president of US Airways, was seen as an internal strategist who could help move the company's operations toward profitability.

http://www.nytimes.com/reuters/business/business-airlines-usair-ceo.html


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In general, chief executives don't resign when the getting is good. So today's departure of US Airways CEO Rakesh Gangwal is probably not a good sign that things are turning around for the airline.

The airline is in the midst of a massive Gangwal-led downsizing that it hopes will restore it to profitability. This summer, the CEO said US Airways would focus on regional travel and eliminate unprofitable routes. Gangwal has a reputation as a solid operations executive, but because of its consistently high costs, the company has struggled with profitability for a few years. In the third quarter, the airline lost $766 million, or $11.42 per share, on $2 billion in sales.

The official party line is that Gangwal is leaving to work in venture capital. He'll be replaced by Chairman Stephen Wolf. It's possible that Gangwal wanted to turn the airline around to try to maintain independence, and he may have clashed with Wolf, who seems to lean toward selling. US Airways' proposed merger with United Airlines was nixed by regulators in July.

http://biz.yahoo.com/fo/011127/1127usair_1.html

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Please also see:

http://www.flyertalk.com/forum/Forum51/HTML/001832.html

[This message has been edited by doc (edited 11-27-2001).]