State of the Airlines

Friday, January 21, 2005

NEWS: US Airways Win Labor Concessions

US Airways Employees represented by the IAM have ratified a best and final contract offer. This contract covers around 8800 employees including mechanics, stock clerks and a few other groups. The contract will mean $353 million in annual savings for the next five years and puts US Airways over the $1 billion mark in total concessions to date...a major milestone in US Airways' plan to exit bankruptcy. And now...the reality check. Approvals percentages for most of the major groups represented ranged in the low 60% area. Not exactly a mandate...more of a begrudged "whatever".

While I admire the whole of US Airways for throwing down in an effort to save their airlines I still feel there is better than a 50% chance that US Airways will not last the year. Frankly I still don't think they will make the end of the first quarter. Too many factors remain that work against US Airways not the least of which is a need for more financial backing and a new way to do business. It will be a challenge to try and infuse energy and momentum back into their recovery effort.