QUOTE AND NEWS
TheStreet.com  Apr 10  Comment 
CHARLOTTE, N.C. (TheStreet) -- Recent changes to American's   frequent flier program are as notable for what the carrier didn't do as they are for what it did do, because American didn't move to price-based frequent flier awards. In announcing...
DailyFinance  Apr 10  Comment 
The Citi® Executive® / AAdvantage® World Elite MasterCard® is now the only credit card that comes with American Airlines Admirals Club® membership to nearly 40 clubs in major airports worldwide, and now includes access to...
MarketWatch  Apr 8  Comment 
American Airlines adds more baggage fees, adjusts frequent-flier rules.
TheStreet.com  Apr 8  Comment 
CHARLOTTE, N.C. (TheStreet) -- Four months after the completion of the merger of American Airlines and US Airways, all five of the US Airways unions said workers aren't yet seeing the benefits they expected. In a letter to American CEO Doug...
Reuters  Apr 3  Comment 
American Airlines Group said on Thursday that US Airways will join its venture with British Airways, Iberia and Finnair that operates flights between the United States and...
TheStreet.com  Mar 31  Comment 
Charlotte, N.C. (TheStreet) - To merge with American Airlines , management at US Airways worked closely with the carrier's labor unions to put together a bid that won over Wall Street and American's creditors committee. Other unions, particularly...
TheStreet.com  Mar 28  Comment 
Charlotte, N.C (TheStreet) --- US Airways pilots have asked a federal judge in Charlotte to lift a 2012 injunction that prevented them from engaging in any job actions because a merger with American brought an industry standard contract. Judge...
TheStreet.com  Mar 25  Comment 
CHARLOTTE, N.C. (TheStreet) -- It is rare for a U.S. airline to lose all contact with one of its aircraft, but it does happen. Flying from Charlotte to Rio about four years ago, US Airways Flight 800 lost contact with the carrier for about an...
TheStreet.com  Mar 21  Comment 
CHARLOTTE, N.C. (TheStreet) -- Officials from US Airways and its largest union met with the National Mediation Board on Tuesday and Wednesday, and the two groups went home with vastly different interpretations of what the board might do...
TheStreet.com  Mar 17  Comment 
CHARLOTTE, N.C. (TheStreet) -- US Airways' biggest union said it wants to be able to strike because its members are paid less than American workers who do the same jobs, despite the two carriers' merger on Dec. 9. The airline has said it wants...




 
TOP CONTRIBUTORS

US Airways (NYSE: LCC) is a major domestic air carrier, which as of April 2008 operates 3,800 flights to 230 destinations across the U.S., Canada, the Caribbean, Latin America and Europe[1]. The company’s finances suffered considerably due to reduced air travel following September 11th, forcing the airline to declare bankruptcy in 2002[2]. However, unlike other carriers that improved and emerged stronger following Chapter 11 protection, US Airways never fully recovered. The combination of high fuel costs and tough labor negotiations forced the company into a merger with America West in 2005. While the US Airways name was maintained for brand purposes, the merger actually left America West executives and stockholders with more control over the new company[3].

US Airways has responded to the low fare revolution in domestic air carriers by attempting to cut costs and revise its route structure. The company has adopted increased point-to-point flights along the east coast and instituted fees for basic amenities (headphones, food, etc.). The airline's ability to continue to manage its costs is less certain, however. In 2008, the company's 30,000+ employees formed a coalition to demand higher wages and better benefits. Normally, airlines negotiate with their employees through separate unions (flight attendants, pilots, service workers, etc.). By forming a single body to negotiate on their behalf, the employees will be able to exercise greater bargaining power. During the same period, fuel prices reached an all time high.

Business Overview

Business & Financial Metrics[4]

In 2009, LCC incurred a net loss of $205 million on revenues of $10.46 billion. This represents a whopping 90.7% reduction in net income against a 13.7% decrease in total revenues from 2008, when the company lost $2.22 billion on $12.12 billion in revenues.

Business Segments[5]

US Airways operates through a single reportable segment. 79.2% of the company's revenue in 2009 came from flights in the United States.

IMAGE:LCC-Geography2009.jpg[5]

Key Trends and Forces

Competition from Low Cost Airlines

US Airways has long been structured as a legacy carrier; the company has existed for decades, operating a hub-and-spoke network as well as a separate regional airline. This business strategy was the industry standard until the middle of the 1990’s, when US Airways and other legacy carriers began to face pressure from low cost airlines. US Airways responded by adopting a new “Metrojet” service, which operated limited single class no-frills flights quite similar to those offered by Southwest. However, the company’s broader business model remained the same, and the “Metrojet” service proved to be short lived. Thus, the competition from discount airlines remained, forcing US Airways to search for new ways to cut costs, especially as operating profits dropped in the post-September 11th period. In an attempt to reduce expenses, US Airways moved away slightly from the hub-and-spoke structure and began offering more point to point flights. However, the high costs continued and will continue, especially with respect to labor expenses. Moreover, the company has announced plans to introduce improvements to their in-flight service, which brings into question the carrier’s ability to sufficiently reduce costs.

Increased Government Regulations

The Federal Aviation Administration (FAA), an agency of the federal government, is charged with providing oversight for airlines operating in the United States. In 2008, it was revealed that the FAA was not active enough in ensuring airline compliance with safety inspections. As a result, there has been a strong Congressional backlash, which will likely force the FAA to become stricter in guaranteeing airlines perform safety checks. [6]. While US Airways has not been forced to cancel flights in order to comply with the new demands from the FAA, the increased intensity of inspections will probably result in an enduring increase in expenses for the airline and the industry in general.

Competitors

US Airways's competitors include:

References

  1. US Airways 10K, Item 7, pg. 34
  2. US Airways 10K, Item 1, pg. 5
  3. US Airways 10K, Item 7, pg. 38
  4. LCC 2009 10-K pg. 31  
  5. 5.0 5.1 LCC 2009 10-K pg. 104  
  6. “Fliers Fume as American Airlines Grounds Another 595 Flights Friday” Fox News April 11, 2008
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