Nearly every company that walks into bankruptcy court expects to emerge from the court's protection stronger and more vibrant than ever. Of course, the stockholders who find that their shares are worthless and the employees who find themselves jobless may not see the demise of what they thought was their future in quite the same way as optimistic CEOs. But that goes with the territory. And these days, that territory is getting broader and broader.
We wish we could be optimistic, too -- as we were with PharMor, LTV and all the others. And even though US Airways, the latest major corporation to declare bankruptcy, is not a Mahoning Valley company, plenty of area residents have been working for the airline as pilots, flight attendants, mechanics and reservation personnel. We can recognize the terrible situation they're in and with them, hope for the best.
But the troubles at US Airways also have a significance for the entire Western Pennsylvania-Eastern Ohio region. With Pittsburgh as the airline's principal hub, its loss could cast a shadow over an already troubled economy.
The airline industry has been a particularly hard-hit sector of that economy. Especially, after the terrorist acts of Sept. 11.
Others in the same boat
US Airways is not alone in its troubles. United Airlines is teetering on the brink of bankruptcy, and American Airlines just announced a 7,000 worker layoff. The only major airline that has managed to stay profitable over the past year is Southwest Airlines, a no-frills carrier that has a younger fleet and far greater flexibility in its operation.
The older aviation companies are saddled with older aircraft and expensive union contracts. US Airways employees had already given the company $576 million in wage concessions, but the airline still needs $261 million more. It is also seeking as much as $300 million more in savings from lenders, suppliers and equipment lessors.
US Airways Chief Executive Officer David Siegel said yesterday that his company plans to build commuter jet service while reducing long-distance service. US Airways' newly formed MidAtlantic Airways will be based in Pittsburgh and fly as US Airways Express. Should this strategy be successful, employment and business in Pittsburgh will be maintained and could expand.
Although aviation history is littered with such defunct names as Pan-American, Braniff, TWA and Eastern Airlines, there have been some success stories: notably Continental Airlines.
US Airways can survive. But it won't be easy.