Will USAirways Survive?
Mar 31, 2005, 6:13 am
#1
Original Poster
Join Date: Mar 2005
Programs: USAirways
Posts: 11
Will USAirways Survive?
Excuse me if this question has been answered in another place, but, I am new to FlyerTalk and would like to get a read from other frequent flylers. I have been with USAirways DM for many years - 10+ years at Silver and the last 3 at Gold.
During the last couple of years I have moved more of my travel to US as a small gesture of support to the ailing airline. I've come to know a lot of USAirways personnel over the years and I have been pulling for the airline's survival mainly because of them.
After looking over many of the threads and posts on this site I am left with a feeling that USAirways is all but dead - the only thing that is left is for the official word.
Am I reading this right?
Any comments would be appreciated.
Thanks,
Mike
During the last couple of years I have moved more of my travel to US as a small gesture of support to the ailing airline. I've come to know a lot of USAirways personnel over the years and I have been pulling for the airline's survival mainly because of them.
After looking over many of the threads and posts on this site I am left with a feeling that USAirways is all but dead - the only thing that is left is for the official word.
Am I reading this right?
Any comments would be appreciated.
Thanks,
Mike
Mar 31, 2005, 8:33 am
#2
Join Date: Sep 2004
Programs: US1, NW, AA, SPG...
Posts: 281
Mike,
Welcome to FlyerTalk. You're right, you'll be able to find a lot of competing perspectives here on USAirways' potential for survival.
One thing that's been interesting to me to see is the alignment of interests that keep airlines from failing. I think if USAir was a widget manufacturer rather than an airline, they'd be long dead by now, as would a number of others in the industry (we'd probably have the old triumvirate of three major national players surviving in the industry). However there are a number of interests that keep organizations on life support, whether or not it's objectively justified. There was a good article today in the Wall St Journal about just that, how GE (as one example) is propping up airlines like USAir and how that may or may not be good for the long-term health of the industry. GE is one example, you could make a similar argument about any counterparty that has been flexible with any of the bankrupt carriers.
I think the economic conventional wisdom is that this behavior merely postpones the inevitable and that when the shakeup comes, it'll be even bigger. However, the conventional economic wisdom would have had USAir and United amongst others long dead by now. So who knows?
Welcome to FlyerTalk. You're right, you'll be able to find a lot of competing perspectives here on USAirways' potential for survival.
One thing that's been interesting to me to see is the alignment of interests that keep airlines from failing. I think if USAir was a widget manufacturer rather than an airline, they'd be long dead by now, as would a number of others in the industry (we'd probably have the old triumvirate of three major national players surviving in the industry). However there are a number of interests that keep organizations on life support, whether or not it's objectively justified. There was a good article today in the Wall St Journal about just that, how GE (as one example) is propping up airlines like USAir and how that may or may not be good for the long-term health of the industry. GE is one example, you could make a similar argument about any counterparty that has been flexible with any of the bankrupt carriers.
I think the economic conventional wisdom is that this behavior merely postpones the inevitable and that when the shakeup comes, it'll be even bigger. However, the conventional economic wisdom would have had USAir and United amongst others long dead by now. So who knows?
Mar 31, 2005, 2:48 pm
#3
Join Date: Oct 2004
Location: DFW
Programs: AA EXP-1MM, SPG Gld, HH Silver, Skymiles, Marriott Silver, Hyatt GP Plat , CO Peon, Hertz 5 Star
Posts: 1,371
It seems that US is the little engine that could. The big problem that could possibly be the final nail is fuel prices. It could cause a couple of legacies to go under namely DL and US. I don't think UA will go anywhere. I think the gov would step in and keep UA from going under because if UA went under AA would become the true 800lb gorrilla that would dominate many of the nations busiest hubs including ORD, DFW, LAX, MIA, and not to mention AA would become the only legacy to offer three class service on transcon routes. DL's problem is if they have to declare Chap 11 they may not have enough cash to sustain themselves under restructuring thus having to liquidate. AA is ironically the healthiest of the legacies right now with over $3.5 billion in cash and equivelants on hand. CO and NW are in good shape as well. Another crux for US, with the exception of the east coast, is their route structure. All the other legacies seem to dominate in one or more international markets. AA dominates Latin America and the Carribean, NW and UA dominate Asia, UA and AA have a duopoloy on LHR flts. CO and DL have extensive European destinations. All the above legacies also have great domestic route structures as well. I am routing for US because I would hate to see anyone go out of business but unless fuel prices loosin, it doesn't look too good.