The airline industry in the United States is beset with an oversupply of airlines, a number of which have been wallowing in chapter 11 while unsecured creditors try to come to terms with the fact that their claims will never be paid. Here are prior posts from over the past year that examine the battered condition of the U.S. airline industry.
But US Airways Group Inc. may have done the rest of the American airline industry a favor — its management and employees outraged thousands of its customers by providing inadequate staffing, canceling flights and losing large amounts of luggage over the hectic holiday weekend.
US Airways pulled this stunt while operating in a chapter 22 bankruptcy case that it filed earlier this year after emerging from its prior chapter 11 case less than two years ago. While a big winter storm in the Midwest and Northeast complicated travel, US Airways’ incredibly poor performance alienated thousands of customers, many of whom will never even consider a US Airways flight again. Already faced with crucial financial deadlines in its bankruptcy case for reducing labor costs and persuading various lenders to provide additional forbearance, US Airways’ weekend performance should be the straw that breaks the camel’s back and pushes the company into a liquidation.
For its part, US Airways blamed more than 450 canceled weekend flights and thousands of pieces of stranded luggage on the winter storm and higher-than-usual numbers of sick calls during the crucial travel period. Over the weekend, US Airways’ flight-attendant sick calls ran around 300 a day instead of the usual 100 and that staff shortages were common among ramp workers at its big Philadelphia hub. As a result, unclaimed baggage continued to sit at Philadelphia International Airport and Washington’s Reagan National Airport, although the carrier had fewer than 1,000 pieces of luggage left to deliver on Monday, down from a peak of 10,000 lost bags over the weekend. The federal Transportation Department has already commenced an investigation into whether the staff shortages were a deliberate attempt by employee groups to undermine US Airways’ operations over the holiday weekend.
Is there any compelling reason for US Airways to continue operating?