Scarcely more than one year after emerging from bankruptcy, U.S. Airways
To stop its tailspin, U.S. Airways is rushing to put its strategic plan in place. It recently introduced a simplified fare structure in Philadelphia, called GoFares. The new scheme eliminates the need for weekend stays and round-trip purchases. In addition, the firm's intention to build out its regional jet service into lower density markets makes a lot of sense.
Still, it seems doubtful that U.S. Airways can avoid Chapter 11. In addition to changes in marketing and distribution, a key element in its cost-cutting agenda is to negotiate more compensation reductions with union employees. During bankruptcy, the firm managed to wrangle huge concessions out of workers. As a result, it's unlikely that its employees are in the mood to suffer another wave of pay decreases.
With the high price of fuel dogging the industry, only the strongest will survive. For U.S. Airways, that will probably mean a white surrender flag will soon replace its American flag logo.
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Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.