Benzinga  Aug 26  Comment 
The U.S. Air Force has named Raytheon Company (NYSE: RTN) as one of the prime contractors on the Training Systems Acquisition III (TSA III) contract. This allows Raytheon to bid on delivery orders on this multiple award, indefinite...
Financial Times  Aug 21  Comment 
White House says Fadhil Ahmad al-Hayali died while travelling in a vehicle near Mosul on Tuesday
TheStreet.com  Aug 17  Comment 
NEW YORK ( TheStreet) -- The last US Airways flight will have the flight number 1939, commemorating the year the airline was founded, and the designated aircraft will make a final tour on Oct. 16. US Airways predecessor All American Aviation...
Clusterstock  Aug 11  Comment 
The US Air Force's push to develop operational flying saucers 60 years ago laid the conceptual groundwork for one of the variants of Lockheed Martin's F-35, MIT Technology Review reports.  The F-35 comes in three variants, with key mechanical...
Forbes  Jul 28  Comment 
With a little modification, of course. And a few of its friends. At least, that's what the US Air Force found out.
OilVoice  Jul 24  Comment 
Cuadrilla plans to appeal Lancashire County Councils LCC Development Control Committees decisions last month to refuse planning consent for two applications for temporary shale gas exploration sit
Times Online  Jul 22  Comment 
A delivery driver planned to carry out a Lee Rigby-style attack on US military personnel at an air base in East...
Financial Times  Jul 17  Comment 
Latest problems with KC-46 programme for US air force relate to spending on integrated fuel system
The Australian  Jul 12  Comment 
The union representing air pilots has thrown its weight behind an audacious move to adopt a safer US air traffic control model.
TheStreet.com  Jul 10  Comment 
NEW YORK (TheStreet) -- Now the end for US Airways has a date: Saturday, Oct. 17, 2015. That is when the 76-year-old airline, which began flying as mail-carrier All American Aviation in 1939, will fly its last flights, when all of its kiosks will...


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.


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.


US Airways's competitors include:


  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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