QUOTE AND NEWS
Financial Times  Oct 8  Comment 
Activists say hundreds of civilians remain trapped
BBC News  Oct 1  Comment 
The US air safety regulator has ordered airlines to replace cockpit displays in more than 1,300 planes because of fears that wi-fi signals can make them go blank.
Forbes  Sep 28  Comment 
.Two unions and a series of federal judges have tried unsuccessfully to fix the problems unleashed by a controversial arbitrator’s pilot seniority ruling following the 2005 merger of America West and US Airways.
Times Online  Sep 27  Comment 
An American air traffic control centre employee started a fire at his workplace before attempting to slit his own throat,...
TheStreet.com  Sep 26  Comment 
DALLAS (TheStreet) -- American has painted its second heritage aircraft, and this one honors Pacific Southwest Airlines, always known as PSA and best remembered for the smile painted on the nose of its airplanes. Painting of the A319 with...
TheStreet.com  Sep 25  Comment 
DALLAS (TheStreet) -- American Airlines flight attendant leaders were ready to send a tentative agreement out to members Wednesday morning when they learned that Delta awasagiving its employees a 4% raise in April. So Laura Glading, president...
The Hindu Business Line  Sep 24  Comment 
US air strikes in Syria left Asian stock markets jaded on Wednesday, setting the stage for another soft session for European shares. The dollar was kept in check after US yields fell on g...
The Economic Times  Sep 24  Comment 
Returning from a market holiday on Tuesday, the Nikkei average fell 0.1 per cent to 16,192.02, slipping further from a seven-year peak of 16,205.90 hit on last Friday.
Financial Times  Sep 23  Comment 
The targeting of non-Isis groups, such as the Jabhat al-Nusra, in US-led air attacks sparks concern among anti-Assad forces




 
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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