Can This Reputation Be Saved?


US Airways
Will another Chapter 11
keep them off the ground?

The short answer: Probably not.

US Airways, fondly referred to as "US Scare" in some parts of the country, has had troubled times. A couple years ago it blamed 9/11 for its problems and declared bankruptcy, receiving a nice bailout from American taxpayers. Now it's declared bankruptcy for a second time as it tries to juggle escalating fuel costs, stiff competition and creditors who clearly want to get paid back at some point.

This is a company with problems Chapter 11 can't help. While many of the legacy carriers face similar challenges, US Air has had a harder time, mostly because its business model required it to have a virtual monopoly over air traffic in and out of its key cities. We all learned in Economics 101 that monopolies can't last forever, and so it goes with US Air. Carriers like Southwest Airlines have grown and passengers in many US Air cities now have alternatives. Maybe at a second airport, but certainly at lower costs. Now, as passengers hear more and more stories of US Air's troubles, they most certainly will go looking for more reliable flights.

Making matters worse, US Air is attempting to balance its books on the backs of the only people who might help them out of this mess: their employees. Let's hope management understands that their recovery depends upon positive and upbeat employees. That's because good employee morale is necessary for good customer service, and good customer service is key to profits. And without some profits soon, US Air will be grounded for good. -Katie Delahaye Paine

 

 

 

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