phillyd2
Dec 6, 04, 12:23 pm
US Airways says time is running out without more cost-cutting
Flyers who depend on US Airways should keep an eye on the news over the next few weeks, because the beleaguered airline is coming down to the wire in its efforts to stay in the air. At least, that's what its lawyers told the bankruptcy court last week, when US Airways asked for permission to void its labor contracts if it can't secure more wage and work-rule concessions from some of its restive unions. The biggest remaining obstacles are the machinists and the flight attendants unions. The former are reportedly making little progress in talks with management; the latter are said to be getting somewhere in negotiations, but the flight attendants also sent out a ballot to members asking them if they will strike in the event talks fail, or the court voids their current contract. US Airways also asked the court for permission to end its employee pension plans in 2005.
US Airways attorneys told the court flatly last week that the company is still losing money, and its options are quickly running out. They said the airline won't be able to stay in business beyond mid-January unless it gets some significant relief in the form of lower employee wages - whether that comes from negotiated reductions or a court order.
There's another irony at work here: The very fact that US Airways is publicly warning of its own possible demise (although it is doing so in an effort to prevent it) is likely to have the unintended effect of driving away nervous passengers, and thus drying up much of the little revenue it still has. If anyone ever needed a Christmas miracle, US Airways certainly does.
Flyers who depend on US Airways should keep an eye on the news over the next few weeks, because the beleaguered airline is coming down to the wire in its efforts to stay in the air. At least, that's what its lawyers told the bankruptcy court last week, when US Airways asked for permission to void its labor contracts if it can't secure more wage and work-rule concessions from some of its restive unions. The biggest remaining obstacles are the machinists and the flight attendants unions. The former are reportedly making little progress in talks with management; the latter are said to be getting somewhere in negotiations, but the flight attendants also sent out a ballot to members asking them if they will strike in the event talks fail, or the court voids their current contract. US Airways also asked the court for permission to end its employee pension plans in 2005.
US Airways attorneys told the court flatly last week that the company is still losing money, and its options are quickly running out. They said the airline won't be able to stay in business beyond mid-January unless it gets some significant relief in the form of lower employee wages - whether that comes from negotiated reductions or a court order.
There's another irony at work here: The very fact that US Airways is publicly warning of its own possible demise (although it is doing so in an effort to prevent it) is likely to have the unintended effect of driving away nervous passengers, and thus drying up much of the little revenue it still has. If anyone ever needed a Christmas miracle, US Airways certainly does.