With its customers' confidence shaken, its employees nervous and competitors cutting fares, US Airways is entering a critical two-week period that may determine whether the airline...
PHILADELPHIA — With its customers’ confidence shaken, its employees nervous and competitors cutting fares, US Airways is entering a critical two-week period that may determine whether the airline survives.
The nation’s seventh-largest air carrier is bankrupt, and its financial problems revealed themselves to the public last week when the company was unable to handle a combination of bad weather and employee no-shows over the Christmas holiday.
The airline was still working this week to deliver the last of an estimated 10,000 bags that piled up at its hub in Philadelphia when too few workers were available to handle them. Some bags weren’t expected to reach their owners until the weekend.
Most Read Business Stories
Flight schedules were largely back to normal by Monday, but other major tests are coming quickly.
US Airways has said that if it can’t lower labor costs immediately, it likely will begin liquidation after an interim financing deal with the government’s Air Transportation Stabilization Board expires Jan. 15.
Pilots, reservations agents and gate agents have already agreed to salary cuts, but agreements with unions representing other workers aren’t yet complete.
Flight attendants have been voting by telephone for several days on ratification of a new contract that would slash their pay too. Results are expected to be announced next week.
Negotiations with baggage handlers and mechanics are continuing, but the airline has asked a bankruptcy court judge to summarily cancel current union pay deals if a new deal can’t be reached soon. The court is expected to rule next week.
Another key hurdle will come this weekend, when US Airways experiences another surge of travel around the New Year’s holiday.
The company took the unusual step Tuesday of asking employees around the country whether they would be willing to travel to Philadelphia International Airport between now and Jan. 3 to work as unpaid volunteers supplementing the airport’s regular staff.
The company stressed that employees already scheduled to work this weekend would be paid their regular rate, but said it hoped to find volunteers willing to donate time greeting passengers, answering questions, serving coffee, directing foot traffic through the terminals, and lending a hand in baggage claim.
“We have been getting many offers from employees who want to help, and this effort will allow them to assist our customers and provide some support for the Philadelphia station,” the company said in a recorded message to employees.
Company spokesman David Castelveter said the airline’s managers planned to be among those volunteering their time. He couldn’t immediately say how many people had responded to the call for volunteers.
Meanwhile, two of US Airways’ competitors, the low-cost carriers Southwest Airlines and Jet Blue, announced this week that they would cut fares on many routes in January and February.
Southwest was charging $178 yesterday for a round-trip flight from Philadelphia to Los Angeles in late January. US Air matched that price, as it has been doing since Southwest began flying out of Philadelphia last spring.
A Southwest spokeswoman said the airline had planned the fare sale far in advance to spur travel during the winter.