US Airways files for ch 11

[markalot]

US Airways filed for Chapter 11 today, its second round in bankruptcy in two years, after workers refused to grant $800 million in cuts the company had sought to reduce its costs to the level of low-fare airlines.

...

The employees know this is probably the end for US air as they can't compete with the smaller low-fare airlines, yet they refuse concessions anyway. So boo hoo, pretty soon instead of making less they will be out in the un-employment lines. No jobs were sent overseas this time, it's all about competition and what the consumer is willing to pay for.

Competition is good.

[markalot]

http://www.washingtonpost.com/wp-dyn/articles/A16445-2004Sep12.html

I agree with you if the corporate types are getting raises and not making concessions themselves.

[mistergugi]

what does this mean to flights for USAir? I went to their website and was looking at flights. Their routes and prices and all were still listed, as if there's nothing going on or nothing to worry about.

I know that Continental filed for bankruptcy in the 90s and was able to turn their ship around, so perhaps USAir will still be okay? I ask b/c I noticed that they fly out of a particular airport (through a partner airline, of course) that no one else seems to. Will this route fall off the face of the map with this bankruptcy? Should I worry if I buy a ticket? The flight will still happen, right?

[Seattle93]

Originally posted by mistergugi
what does this mean to flights for USAir? I went to their website and was looking at flights. Their routes and prices and all were still listed, as if there's nothing going on or nothing to worry about.

It all depends. Barring a strike, flights will continue:

'Customers should not notice any changes to flight operations or customer service because of this filing,' the airline said in a statement on its Web site. 'All bookings will be honored and there are no changes to our ticketing policies.'


If something can be worked out between the company and their empoyees' unions, things could possibly turn around.

If the negotiations completely fall apart and they can't find funding & sponsors, USAir may have to shut down completely and begin liquidating assets. However:

'Liquidation is something that happens rarely in the airline industry,' said industry economist David Swierenga, president of consulting group AeroEcon. 'We've seen in the past, they can last for a long time even when they're losing money.'

Quotes from here (http://feeds.bignewsnetwork.com/?sid=841aabc403e937cf).

[mistergugi]

Thanks!

[AngelV]

Here's the letter I received via e-mail:


Dear ANGEL V,

I want to make you aware of an important but necessary step our company has taken. US Airways has filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. This action is intended to provide the airline the opportunity to implement its Transformation Plan built on lower costs, a simplified fare structure, a strong position on the U.S. East Coast, and a growing presence in Europe, the Caribbean and Latin America.

You should understand that US Airways is not going out of business. The Chapter 11 process will allow US Airways to complete its restructuring initiatives while we continue normal day-to-day operations. There will be no changes to our flight schedule as a result of this filing. Every ticket will be accepted and honored in accordance with current US Airways policies; refunds and exchanges will be made as usual. Reciprocal agreements with other air carriers, including affiliates, Star Alliance and codeshare partners, will remain fully intact and continue without interruption.

I want you to know that this announcement has no impact on your Dividend Miles account and the many benefits you receive as a member. While our restructuring efforts focus on achieving a competitive cost structure, there will be no direct impact on our ability to professionally serve you. This action will not affect your ability to earn or redeem Dividend Miles to the more than 750 worldwide destinations we offer as a Star Alliance member airline. Additionally, the US Airways Club network continues to operate without interruption for its members.

We remain committed to our Transformation Plan, which provides many positive benefits to customers, including better service, more flights and low fares. We continue to expand GoFares, which provide lower, simpler fares while not compromising amenities like seat assignments, First Class cabins and airport clubs that you have come to expect from US Airways. Enhancements to http://www.usairways.com as well as airport technology improvements will make traveling even easier. Our strong positions in Boston, Charlotte, New York, Philadelphia, and Washington D.C., allow us to offer even more service to the most popular destinations, and with our new international gateway in Fort
Lauderdale, our Caribbean and Latin America expansion continues, offering even more choices for customers.

We have established http://www.transformingusairways.com as a dedicated Web site with information about our transformation. As this process continues, the site
will be updated regularly.

Thank you for your continued support. We are proud that you are our customer, and we are ready to serve you on your next US Airways flight.

Sincerely,
Bruce Lakefield
President and Chief Executive Officer

[SteelTown Boy]

USAirways is dead,no way they can become a low cost carrier...nfw.

FAQs about US Airways (http://www.post-gazette.com/pg/04257/378231.stm)