Is this the end of USAirways?

[PghUSA]

2 Bankruptcies, 3 CEOs since 2000 and now a Federal investigation and missing xmas presents. Is it the end????

Will 'meltdown' finish US Airways?

Leaving thousands stranded over Christmas weekend further damages airline's already troubled reputation

Tuesday, December 28, 2004

By Dan Fitzpatrick and Mark Belko

PITTSBURGH POST-GAZETTE

Murali Singri won't be flying US Airways again.

A crew shortage and a bad winter storm grounded Singri's connecting flight to Orlando on Friday and left the Detroit traveler stranded inside Pittsburgh International Airport on Christmas Eve.

Singri finally made it to Florida on another airline, but the delay cost his family a precious day of leisure time, ruining the start of their vacation.

"This is very disappointing," Singri said.

Many passengers no doubt are thinking similar thoughts -- and worse -- after a weekend of mishandled luggage and flight cancellations and a high number of employee sick calls from flight attendants and baggage handlers ruined Christmas for thousands and produced what Bruce Lakefield, US Airways chief executive officer, called an "operational meltdown" at the airline.

The nation's seventh-largest carrier canceled 455 flights between Thursday and Sunday -- as many as are canceled in a typical month -- leaving an untold number of travelers unable to make it home for the holidays and 10,000 bags separated from their destinations on one of the busiest travel weekends of the year.

The beleaguered, bankrupt airline tried to dig out from the mess yesterday, ferrying bags by truck and plane from a chaotic Philadelphia International Airport to Charlotte and Pittsburgh, sorting them and trying to reconnect them with angry passengers across the country. By the end of the day, airline officials said flights and staffing levels were returning to normal.

U.S. Department of Transportation Secretary Norman Mineta said yesterday he had launched an investigation into the disruptions at US Airways and Delta subsidiary Comair, which cancelled hundreds of flights over the holiday weekend due to a computer failure.

The service breakdown was another body blow for US Airways, which is fighting for its life in bankruptcy court and trying to cut another $1 billion in pay and benefits from its unions. The travel problem -- which received national coverage throughout the holiday weekend -- could convince more customers to avoid the airline in the months ahead, robbing it of desperately needed revenue and increasing the likelihood that it will not be able to re-emerge from bankruptcy.

The sick calls, which union officials denied were part of an organized campaign, could foreshadow more labor unrest in the months to come.

The airline is trying to wrest concessions from the International Association of Machinists, the lone holdout in the company's pursuit of new cuts and the last union to strike at the carrier.

The IAM -- which includes 9,000 baggage handlers, mechanics, stock clerks and cleaners -- is being asked to give up more than $353 million in annual cuts, including the outsourcing of thousands of jobs. If the IAM does not agree to the make cuts, a federal bankruptcy judge could void its contract on Jan. 6, allowing the airline to impose its own terms on the union.

"I am very, very concerned about the machinists union's reaction to all this," said local airline analyst Bill Lauer.

Lakefield, who blamed problems of the past weekend on the "irresponsible actions of a few," told employees on Sunday that low morale and anger with management over pay cuts do not "pass the test" as excuses for what happened.

"We all have our jobs to do," he said. "Let's not forget who pays our salaries -- our customers. And this weekend did nothing to earn their confidence or future business."

Experts and employees were divided yesterday over the origins of the weekend meltdown, which came to a head in Philadelphia. The airline has long had staffing and baggage problems at Philadelphia International Airport.

Ramp workers in Philadelphia were among those who called in sick over the weekend, along with more than 300 flight attendants across the system, according to Teddy Xidas, president-elect of the US Airways flight attendant union.

Xidas said employees and management share in the blame for what happened. "We are all equally responsible," she said.

"Either we come together or we will implode," she said.

Over the holiday weekend, 39 flights from Pittsburgh were cancelled by US Airways and other carriers. Yesterday morning, there were long lines and long waits for passengers clearing security at the airport.

US Airways has been struggling with customer-service problems since it filed for bankruptcy in September, ranking near the bottom of all airlines in customer complaints and mishandled baggage. But industry analyst Terry Trippler called last weekend "one of the worst baggage messes I have witnessed in my 36 years in this business" and said: "Don't fly US Airways -- anytime."

"Stick a fork in them, folks," Trippler wrote in a e-mail to reporters. "They're done."

But Lauer, the local airline analyst, said US Airways can recover, as long as it does not happen repeatedly.

Both the flight attendants and the machinists union denied that the sick calls, which the company said exceeded normal levels, were part of any orchestrated job action. Xidas said it is normal for employees to call in sick over the holidays and the company should have been better prepared.

Among the Pittsburghers stranded over the weekend were members of the Oakland Catholic girls basketball team. They ended up in San Diego Sunday without their luggage after connecting through Philadelphia on a US Airways flight. For a game tonight, the players have their uniforms, which they brought in their carry-on bags, but no other clothing other the warm-ups they wore on the flight, said Tom Benic, a parent to one of the players.

They will be in San Diego until Friday, but, as of yesterday afternoon, the team had no idea when the luggage would be arriving, Benic said.

Singri, the passenger stranded at Pittsburgh International, said he first was told his Orlando flight was canceled because of weather, not the lack of flight crews. And despite the inconvenience of the canceled flight and the lost vacation time, he said US Airways, which wouldn't have been able to get him to Orlando until yesterday, refused to re-book him through another airline until he raised such a fuss that he was threatened with arrest.

"Those are things I dislike very much," he said.

"Any breakdown in customer service is unacceptable, and we apologize if in fact that was the case," US Airways spokeswoman Amy Kudwa said yesterday.

Singri said he plans to ask US Airways to reimburse him and his family for an estimated $600 in losses caused by the cancellation and the delay in arriving in Orlando.

He added he does not intend to fly US Airways again, other than for the return flight home New Year's Day.

Given what happened last weekend throughout the US Airways system, that holiday flight already is making him nervous.

But airline spokesman Chris Chiames said the company will be sending more managers to Philadelphia in the next few days to boost staffing levels and ensure that travelers do not experience on New Year's what they experienced over Christmas.

"We let some people down this past weekend," said Chiames, who spent much of the day appearing on national television and defending the carrier.

"We will be taking steps to ensure it is not repeated. Our job now is to go out and serve our customers and earn back the trust and confidence of those we let down."

--------------------------------------------------------------------------------

(Dan Fitzpatrick contact: [email protected] or 412-263-1752.

Mark Belko contact: [email protected] or 412-263-1262.)

[monsoon]

[Brickell]

I've never flown with them, but I agree with metro. It's time to let some of these airlines die.

[uptownliving]

I have flown with them, as recently as October 2004...and all of my experiences were good ones and compared well with my experience on other airlines.

USAirways has 2 weeks to figure all of this out...I will go ahead and say this airline will make it another year.

[Spartan]

I agree. We should let the airlines die. New ones will come along, because we know that there is demand.

[Delta]

On a practical note, what are employees supposed to do in the meantime if this one folds?

The CEO and immediate subordinates would be AOK but what of the flight crewes, reservation staff and baggage handlers? Those who don't care for taking part in any boycott.

[wolfdawg54]

I don't really know but I think that the airline will make it a least a couple of more years. The size of USair is huge. What might end up happening may be a merger. That sounds more realistic.

[uptownliving]

On a practical note, what are employees supposed to do in the meantime if this one folds?

The CEO and immediate subordinates would be AOK but what of the flight crewes, reservation staff and baggage handlers? Those who don't care for taking part in any boycott.

<{POST_SNAPBACK}>

Well they won't be able to work at another airline...unless its a startup and in that case they will be back at the bottom of the totum pole so their pay will suck....they are damned if they do and damned if the don't.

[uptownliving]

I don't really know but I think that the airline will make it a least a couple of more years. The size of USair is huge. What might end up happening may be a merger. That sounds more realistic.

<{POST_SNAPBACK}>

Merger is not going to happen...their last merger partner...United is in bankruptcy...and all the other airlines...even if they wanted to merge...could not as they don't have enough cash to do it....but none of them want to merge with USAir.....if they do go under expect parts of the airline to be bought piecemeal.

[PghUSA]

True that,

Merging is not going to happen, not when a buyer could buy the cherry assets of USAirways "on the courthouse step" for pennies on the dollar. Sick and dying companies DON'T get bought out they get picked over by corporate vultures and what they dont steal at liquidation is left to rot.

[monsoon]

[monsoon]

[BigCityAttitude]

USAirways is now asking its employees to work for free over the New Years Weekend.  Wonder how well that concept will be accepted by the Unions?

<{POST_SNAPBACK}>

Hehe I have a flight with US Airways New Year's Eve. Wonder how hectic that will be... But I do think USAir will fail in 2005. Despite it being one of the most pleasant air experiences of my life (I'd never flown USAir before a couple weeks ago) the circumstances are too much.

[PghUSA]

Hehe I have a flight with US Airways New Year's Eve. Wonder how hectic that will be... But I do think USAir will fail in 2005. Despite it being one of the most pleasant air experiences of my life (I'd never flown USAir before a couple weeks ago) the circumstances are too much.

<{POST_SNAPBACK}>

have fun uptown sure it will be an event to remember

A US Airways baggage handler, who declined to give his name without permission from management, checks a list after locating a piece of missing luggage at Pittsburgh International Airport yesterday. His list contained 360 pieces of missing luggage that he was trying to find during his shift.

http://www.post-gazette.com/journal/photos...ay.asp?ID=14491

[PghUSA]

http://www.post-gazette.com/pg/05005/437240.stm

Pittsburgh Post-Gazette:

"Rival carriers, though, may view the winter months as an opportunity to attack a weakened competitor coming off a Christmas weekend fiasco in Philadelphia that stranded thousands of passengers, left 10,000 bags of luggage unclaimed, and alienated many fliers.

The other airlines "smell blood in the water," said local airline analyst Bill Lauer."

[PghUSA]

For the love of God, there are too many flights and too few passengers even now with bargain bottom ticket prices . . . the industry will lose 2-3 companies by the end of 2005, just let them die in peace and lets move forward!!!! Why is our hard earned tax money going to this corporate welfare BS, how much did the CEO cut his pay???? This makes me sick.

When my small business starts to fail I GET A BAILOUT FROM UNCLE SAM RIGHT!!!!

Federal cash to keep flowing to US Airways

Thursday, January 13, 2005

By Dan Fitzpatrick, PITTSBURGH POST-GAZETTE

US Airways, in a big boost that could help the nation's seventh-largest airline survive bankruptcy, convinced the federal Air Transportation Stabilization Board to extend the carrier's use of day-to-day cash through June 30.

A U.S. Bankruptcy Court judge in Virginia approved the extension at a hearing today.

The airline's access to ready cash was due to expire tomorrow. To keep the new agreement in place, US Airways must maintain weekly minimum cash balances and meet other milestones.

US Airways hopes to emerge from bankruptcy by June 30.

Airline Chief Executive Officer Bruce Lakefield hailed the new agreement as evidence that "our most difficult period is behind us."

"Our customers should book us with confidence, knowing that we have sufficient cash to operate as well as to implement the many changes that are already under way."

The federal airline board, created after the crippling terrorist attacks of Sept. 11, 2001, has been a key part of US Airways' survival plan. It backed a $900 million loan that helped US Airways out of its first bankruptcy, in 2003. The airline still owes the board more than $600 million, and most of its assets are pledged as collateral against the loan. When US Airways filed its second bankruptcy last September, the ATSB allowed the airline to access the loan money again as day-to-day operating capital.

Among the hurdles still remaining for US Airways is ratification of a new, $268 million cost-cutting agreement with the International Association of Machinists, the only union not to agree to new concessions. The rank-and-file will complete their vote by Jan. 21.

The airline's proposed cuts show 2,500 positions being pared from the 8,800-member union, including 2,000 from the unit that represents mechanics, stock clerks and cleaners and another 500 from the unit representing baggage handlers. The company is hoping to diminish the number of furloughs by encouraging early retirements and offering to transfer some employees to vacancies elsewhere in the system.

[urban addict 20324]

The airline industry has suffered too much from the fatal blow of 9/11; though ridership is bouncing back in the airlines and there's a improving economy, it still hasn't fully recovered.

[PghUSA]

^^ agreed its not 1999 anymore . . . the business is shifting and right now there are too many seats in the air and less and less customers in the airports. Economics 101 dictates that some of the companies are going on the chopping block, why linger in their misery and subsidize them with OUR money. Let them go the way of the buggywhip shop across from River Rouge in 1900. The future belongs to the low cost carriers.

[urban addict 20324]

SF's International Airport SFO, was once the 5th busiest before the dot-com crash and 9/11, but then it dropped to 19th. I think the airline industry will rebound nicely, but slowly.

[PghUSA]

The Industry overall will, but the pool is not expanding as it once did and with the Southwests and JetBlues growing by 10-15-20% that means theres just not enough passengers left for a United or USAirways. Too many airlines are in the sky, not enough $$s in the industry to support all of them. No more tax money to let them limp along is my view.

[urban addict 20324]

Too many airlines= too much competition= the feeble airlines would be weeded out by the florishing, powerful airlines- Social Darwinism.

[PghUSA]

^^ I'd agree to that but Washington keeps giving the weak ones our money!?!

[urban addict 20324]

!!!!!!!!

[ATLBrain]

^^ Amen, brother. Enough with the federal handouts already! When I read this, I thought "Oh damn! There go the pols up in DC again trying to keep their frequent flier miles with US Scareways. RR National Airport is sacred to those idiots!" I wonder if any of them has considered that another airline would move right in to fill most (if not all of the service).

Does this mean that the pension of the airline is now in big time jeopardy?

[PghUSA]

About the pension I would rather see tax money go to that then to the corporate coffers, good question to which I don't know the answer right now, I'll be sure and post it, chances are though that everything is up in the air on this USAirways thing.