Siegel says-SW to kill USAirways

[storminpilot]

http://biz.yahoo.com/rf/040324/airlines_usairways_2.html

Reuters
UPDATE - US Airways still needs major cost cuts - CEO
Wednesday March 24, 4:41 pm ET

CHICAGO, March 24 (Reuters) - US Airways (NasdaqNM:UAIR - News) Chief Executive David Siegel on Wednesday said the airline still needs to slash costs dramatically to survive, adding that he was willing to make sacrifices as the company seeks a new round of concessions from workers.

Siegel in a company update broadcast to employees over the Internet said US Airways needs to reduce unit costs from 10 cents to 6 cents and have new labor agreements in place by this summer to compete with low-cost carriers that are rapidly gaining market share.

The No. 7 U.S. airline, which emerged from bankruptcy a year ago, still has among the highest unit costs, or costs per available seat mile, in the industry. Low-cost carriers have unit costs in the 6-cent range.

"Southwest is coming to Philadelphia in May ... and they're coming for one reason: they're coming to kill us," Siegel said. "They beat us on the West Coast, and they beat us in Baltimore. If they beat us in Philadelphia, they're going to kill us."

Southwest Airlines (NYSE:LUV - News) is scheduled to start service in May in Philadelphia, where US Airways has one of its three main hubs.

"We're going to lose more money as Southwest comes into Philadelphia, but we're going to have to match up with them. We don't have a choice. We can't give our customers away," he said.

US Airways lost $98 million in the fourth quarter. Its shares closed down 15 cents, or 3.2 percent, at $4.50 on the Nasdaq on Wednesday before Siegel's comments.

 

[learjetguy]

CUSTER'S LAST STAND

 

[SWA/FO]

Wow.... just had a family friend (in Philly) email me about how we (SWA) are putting US Airways out of business. Do they all believe that?

Yep, its all SWA's fault. No other reason.

 

[Cpt. Over]

I hate to say it SWA/FO, but I strongly believe you will get a lot of that sentiment. Nothing against SWA, but people in these communities will see Southwest's move into Philadelphia as a strong arm play. The funny thing is they will also love the great low fares that you offer them. I'm fairly new at jetBlue (we all are). I spoke with one of our chief pilots and he mentioned management doesn't want to go into markets right now that will have the company look like it is out to get another airline, e.g. USAir in Charlotte, etc. But from Southwest's perspective, you have to continue to grow and Philadelphia is a perfect market for that growth (high fares etc.) Good luck. Its good to see the growth over there and the increased hiring.

 

[Ty Webb]

The obvious thing here is that USAir can't "out Southwest" SWA, nor should they try to. Focus on being USAirways:

Don't match their prices, offer better service. SWA doesn't fly to many of the places USAirways goes, focus on service, direct flights, FF miles and a good (Assigned) seat at a reasonable fare.

You may cut a bunch of flights that compete directly, but I think that this strategy would be more likely to succeed than trying to slash it to the bone and go head-to-head . . . . but, what do I know? I'm just a yoke and throttle operator from sector 7-G.

 

[Midnight Mike]

Ty Webb

Well said, that is a problem with some, or even a majority of the major airlines, they offer lousy service.

 

[On Your Six]

Have you seen their terminals lately? Seats are torn and the PHL terminal is a mess. I really wonder how much longer USAirways can survive.... With fuel prices still climbing, how much time does it realistically have left? Not much time unless the employees accept MESA-level wages IMMEDIATELY...

If I were a current or ex-USAirways pilot, I'd be looking for JetBlue or Virgin America applications right now...

 

[G4G5]

Seigel advises USAir employee to leave if they are not happy.

http://news.morningstar.com/news/DJ/M03/D24/200403241816DOWJONESDJONLINE001125.html

 

[skirt]

I'm fairly new at jetBlue (we all are). I spoke with one of our chief pilots and he mentioned management doesn't want to go into markets right now that will have the company look like it is out to get another airline, e.g. USAir in Charlotte, etc.

I have heard at the monthly chats that while JB management is constantly assessing the situation at USAir "we don't want to be the ones who put the nail in the coffin." Thus JB has not expanded into Charlotte, PIT or PHL. This seems to be strong personal sentiment of Dave Barger. He truely is looking at the human side of things, and does seem to care about crewmembers who don't even work at Jetblue. Will this sentiment last forever? Who knows, but for the timebeing, JB management appears to be waiting to see what happens at USAir, rather than make life even tougher for them.

Skirt

 

[a320drivr]

I find that hard to believe. This business is all about the all mighty dollar and providing results to share holders. If it means going into a city that will hurt Airways, oh well. Its called "doing business". I dont want to see Airways go under but they do need to get with the program if they want to survive. I think employees at Airways have given enough and its time for mgmt. to give.