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Old 02-04-2004, 12:04 PM   #1
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Join Date: Aug 2003
Location: ATL
Posts: 267
US Airways on Final Approach? In AirTran's Crosshairs?

US Airways in trouble again
Airline has lost about $200 million since emerging from bankruptcy

The Atlanta Journal-Constitution
Published on: 02/03/04

Only 10 months after emerging from bankruptcy, US Airways' future is in doubt once again...

Inevitable failure?

Since 9/11, many analysts and airline executives have felt that the failure of one big carrier is almost inevitable.

Should US Airways be that carrier, its departure could help rival airlines along the Eastern seaboard, where its routes are concentrated.

Atlanta-based Delta Air Lines, which competes heavily with US Airways, might be able to raise fares and pick up some useful assets such as landing slots at Washington's Reagan National Airport.

But growing discounters such as Southwest, AirTran and JetBlue also would fill any void left by US Airways, offsetting the benefit to big carriers. Already, Southwest is setting up shop in Philadelphia, a US Airways hub.

US Airways' exit could be a mixed blessing, Delta Chief Executive Gerald Grinstein recently told airline analysts.

"You may tend to get a short-term improvement [in fares] but over the long term, experience tells us that capacity flows into those markets," he said. "And if some of those assets end up in the hands of low-cost carriers, you're going to have another bigger [problem]."

AirTran is window shopping US Airways' assets and watching for new markets to jump into, as it did in Baltimore after a US Airways' regional unit shut down in late 2001.

"We have the ability to move pretty fast," said Joe Leonard, chairman of the Orlando-based discount carrier, although he declined to say what US Airways assets his company would look at.
I completely understand that everyone is in business to make as much money as possible, but I just love these CEO characters. Don't they realize the public reads this stuff. Notice how Delta's Grinstein calls the rising ticket prices an "improvement in fares" and also mentions that if US Airways' assets end up in the hands of low-cost carriers, "you're going to have another bigger problem." Notice that he said "you're", not "we." Naturally, to me, higher ticket prices are definately not an "improvement" in fares and low-cost carriers getting their hands on US Airways planes/landing slots doesn't sound like a problem to me. I'm being fecitious, of course :P
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