Sign in to follow this  
Guest

US AIRWAYS BANKRUPT! Decline of Commercial Avaition

Recommended Posts

I've always flown my FS planes in US Airways Livery so this hits close to home. The airline lost $2.1 Billion in just 2001 alone. Luckily they will be continuing flights through loans. Losses like this have been around the airline industry since Sept 11th. Countless other airlines are in this situation or on the brink. Will commercial aviation ever really recover? How does a decline in interest in commerical flight affect FS itself...will interest be affected? (doubtful if current sales figures for FS keep up) but aviation in general has taken a serious black eye and one wonders how this will affect the future of flight simulation and the industry itself? What carrier might be the next to go?

Share this post


Link to post
Help AVSIM continue to serve you!
Please donate today!

Lets not blow things out of proportion. US Airways was a poorly managed airline. Sept.11 did not help them but their demise was mostly self inflicted. And, btw, they will keep flying so not sure what the fuss is all about.Michael J.

Share this post


Link to post

As long as there are people who need to fly, there will be commercial aviation.Supply and Demand is great!Peteman_RBoise, Idaho

Share this post


Link to post

I was shocked to hear US Airways was filing for Bankruptcy. :'(. never got to fly them, but I heard they were a good airline. regarding the Decline of Commercial Aviation.. this goes for North American Carriers such as DL, AA, COA, and ofcourse my fav. UA. will be able to get some money from the GOV as the gov uses those airlines to transport officals and well, in return for cheaper tickets, they give you some help. well, I'm a bit rusty on that, my friend told me that, that's the case, if so, COOL!! :-outtahttp://ftp.avsim.com/dcforum/User_files/3d51a5440e3ce469.jpg"come fly our friendly skies" (by friendly, we MEAN FRIENDLY ;)

Share this post


Link to post

This was not unexpected US Airways has been in trouble for several years. The last hope to stay out of Chapter 11 Bankruptcy protection was for UAL to purchase the airline. But Thank god for the DOT and the Fed govt as well as the employee unions at United to say no. Then 9/11 struck and U had no other choice.What U has going for it now are the employee unions willing to do what it take to help the airline emerge from Chapter 11. Only time will tell if business picks up and the economy improves U should emerge from Chapter 11 in 12-24 months if we hit a double dip recession U is done.Management of the mid to late 90's took advantage of the airline by rewarding them selves and not the employees as well as doing what it could to protect itself. The management at both U and UA pretty much dropped everything and all concerns for the airline when a deal was struck between Wolf and Goodwin. Unfortunately allot of back door deal making was in the works and in the end the result was one of disgrace. Taking the number 1 airline in the world and turning it into the laughing stock of the industry (UAL) and U's management was negligent in the fact they did nothing to protect U if the buyout was not granted by the DOT.

Share this post


Link to post

Big airlines have gone bankrupt and/or folded (now-mighty Continental went bankrupt in the early 90s I believe) and it never signaled the "Decline" of commerical aviation.

Share this post


Link to post

interestingly, it turns out the same company that bailed out continental in the early 90's plans to do the same with US Airways. Texas Pacific will receive 38% of the shares and an undetermined amount of (but probably near controlling) seats on the board. I am curious to see how this turns out in 5-10 years

Share this post


Link to post

The airline industry is in a "death spiral" right now. Even though the load factors are as high as they've ever been,the fares are so low that no one can make money.If things remain as they are,US Airways will not be the last airline to seek bankruptcy protection.The industry cannot continue to absorb multi-billion dollar losses without there being some significant fallout. As another person said,US Airways has been a badly managed company for quite a while.How do I know? I'm a US Airways employee. The employees will do what we've always done and suck it up to save the company. We've done it before,we'll do it again. US Airways is not going away,so I hope you will continue to fly on our airline.Mike W

Share this post


Link to post

I was very sad and depressed when I heard the news. I hope US Airways will recover. I live near PHL and I know that a lot of people including me depend on US Air for domestic flights. Hopefully the gov't can bail them out of this mess.Sherv

Share this post


Link to post

That company (Texas Pacific) isn't Frank Lorenzo, is it? For the sake of US Air, I hope not.Bruce.

Share this post


Link to post

The airline industry has always been boom or bust. Good times roll around, and the airlines are like drunken sailors on shore leave, bellying up to the Boeing and Airbus bars upgrading their fleets and buying new planes and spending like the party will never end. Then the bust hits, some go under, some get bought. Interesting though, that Southwest didn't lay off a soul after 9/11, and that their market cap is greater than the top three other ailines combined. Hate flying them - respect them though for understanding their brand and having the best safety record in the biz. No fatal accidents. Impressive given the number of take-offs and landings each day with all those short hauls.

Share this post


Link to post

I have never said that Commercial Aviation is going away, i just think that it is in one of its valleys and it may never peak to where it once was, especially with the new aviation innovations coming in the future, the industry lost $12 billion last year alone, and today airline stocks took a big tumble, so really the question is when does the freefall end?

Share this post


Link to post

I think it's quite healthy, if a bit overloaded. And it used to be quick and cheap, now it's quicker and cheaper to drive from Cincinnati to Chicago. (including check-in etc etc). My grandfather always said that the railroads "lost it" when they forgot what they were in business FOR. Hmm, air freight is flourishing. I don't know if that has any bearing but it echos in my head. And X number of passengers with X+Y aircraft capacity? My own personal opinion is that anyone who could drive USair into the ground has special skills.

Share this post


Link to post

Its the law of the land. Conditions change, business models have to adapt...those that do not are left behind. See PA and EAL as good examples. The ones that are most capable of change, will change and will capture the market share left in the wake of those that cannot cope with change. They in turn will grow and show profits until the next shake up occurs...the process will then repeat.CO did file chapter 11 twice and managed to survive and is now doing well..in relative terms.This like everything else will pass, and there will be airlines to pick up the pieces...airtravel will exist for many many more years to come.Regards,Jay

Share this post


Link to post

Sad day for US Airways employee's. I have 7 close friends that are aircraft technicans and pilots. They have been threatened by this for a long time. Just more of Steven Wolf's airline mis-managment. Republic, United, now US Airways, he is just about now as bad as Frank Lorenzo. :-fumeTexas Pacific are some investment bankers here in Dallas that is loaning them $500 million. This is the group that also help America West and Continental turn things around.

http://ftp.avsim.com/dcforum/User_files/3d50255b4990a9e4.jpgJay....:-waveNWA Line Maintenance KDFW NW KLM WORLDWIDE RELIABILITY

Share this post


Link to post

** you all heard of Air FLorida? well one of my dad's BEST friends created that airline..http://ftp.avsim.com/dcforum/User_files/3d51a5440e3ce469.jpg"come fly our friendly skies" (by friendly, we MEAN FRIENDLY ;)

Share this post


Link to post

They told us at Colgan that it is busness as usual :)

Share this post


Link to post

it is really sad to hear that an airline who i am as close to as i am with delta has gone bankrupt, especially for the people of pittsburg too, pit is a big hub for usair, i hope they dont go under like the others before them

Share this post


Link to post

"Losses like this have been around the airline industry since Sept 11th"Although Sept. 11th didn't help, the airline industry was headed for hard times well before Sept. 11th. Let's not make the terrorists think they single handedly hurt the airline industry--nothing could be further from the truth. Even prior to September 11th, airlines were hit with a recession, combined with rising fuel costs. Since travel is a fair part of my profession, I can tell you a number of instances, well ahead of 9/11, where I tabled a trip in order to save costs. We were a bit more liberal with our travel budget prior to the recession. The one 9/11 related issue that did cause a problem was the closing of Reagan airport. This will be debated for a long time, especially if USAirways does fold. I'm not qualified to offer an opinion as to whether Reagan's prolonged closure was justified, but in my own company's case, we began to use Southwest and BWI rather than Reagan, which was our airport of choice for projects in and around D.C."How does a decline in interest in commerical flight affect FS itself...will interest be affected?"In light of the potential for lost jobs whenever an airline folds, I feel it a bit selfish to worry about FS and flight simulation. My hopes and thoughts are with USAirway's employees. "What carrier might be the next to go?"USAirways ain't gone yet....

Share this post


Link to post

John makes good points, yes there were indicators that showed the airline industry would be headed for a downturn before 9/11, but what is particularly troubling this time around is the kind of losses the industry is taking, if the losses keep up then eventually more and more airlines will go under, Midway and USAir( even though USAir is still operating) could be symptoms of a greater problem to come, downturns mean less jons for pilots and less demand for flight schools and etc...sure there will be an upturn eventually, but who will be left to enjoy it?

Share this post


Link to post

I don't know if we compare in age, but I have to say that in my lifetime I've seen numerous cycles in the airline industry. I have to feel aviation will come out stronger, as airlines retool their business models. When I first started my business travels back in the 80's, many markets served today simply weren't. Often, I'd be assigned to a project, with a 3-4 hour drive in blinding snow after a 4 hour flight. Today, more markets are served than ever, and perhaps the airline industry grew in such a way that it couldn't support these markets amidst the combined crisis of a recession and 9/11. But times improve--they always do. Recessions and economic downturns are a study in Psychology. Why did the recession start when it did? Why have business managers in this "recovery" shied away from spending as they did in the boom times of the late 90's? The answer has to do with a healing psyche....and it will recover, as it always has. The fundamentals are still sound--if anything, 9/11 proved Western culture can take quite a shock, and still function and grow (and learn). Sooner or later, our economy will be hit with a "prozac" that causes the tide to change--it may be as simple as the discovery of Bin Laden stuffed in a tomb, or as complex as a successful rollout of a fuel cell vehicle. Whatever it is, don't worry--I've seen worse, and I expect better.

Share this post


Link to post

>who will be left to enjoy it ?Most of us I suppose. And those few well managed and well positioned airlines to benefit from the upturn. Again, as some correctly stated, if there is demand for air traffic there will be some airlines to fulfill this demand. Demand-supply balance is the key. Michael J.

Share this post


Link to post

Yep. The employees of US Airways, and their long time customers said "thank God!" that the merger didn't go through, too. :)

Share this post


Link to post

Frank Lorenzo NEVER "saved" an airline - he only killed them....

Share this post


Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this