US Airways Reconsiders Bankruptcy
Just how many times can one company file for bankruptcy? We may find out with US Airways. US Airways Group Inc. says it is considering yet another filing to reduce costs by at least 25%, to better position itself to compete with the low-cost carriers. US Airways emerged from Chapter 11 bankruptcy in March of 2003, and has not made a profit since. First-quarter losses were $177 million. During the initial bankruptcy, the airline cut about $1.9 billion in costs, the bulk of which came from employee pay and benefits. US Airways is under tremendous pressure to trim costs. Yesterday, it started flying head-to-head against Southwest out of its profitable Philadelphia hub. Without cost cuts and profits proved, it also risks defaulting on its agreement with the federal Air Transportation Stabilization Board, which backed $900 million of US Airways' post-bankruptcy financing.