When US Airways began trading as “LCC” following its September 2005 exit from bankruptcy and merger with America West Airlines, the carrier wanted all and sundry to believe it deserved the distinction of being called a low-cost carrier.
Fast-forward to December 2007, and it’s clear that the carrier has a long way to go before its ticker symbol matches its credentials. Major summer disruptions, significant labor issues and an attempted gate grab at Philly led to plenty of negative press for US Airways in 2007.
That said, I have got to hand it to the carrier for admitting that it fouled up this year, and showing a taste of the casual corporate culture normally attributed to true low-cost carriers like Southwest Airlines.
A few weeks ago, I received an invite to attend US Airways’ annual media day on February 28 in Tempe, Arizona. In it, US Airways' corporate communications team assures: “Yes, we are still here and kicking...and still LOVING our jobs in spite of spiraling Britney Spears-like during the past year!
“With res migration, operational challenges in the Northeast and the slow pace of labor contracts (just to name a few). At least we didn’t shave our heads, though.”
I’m grateful they didn’t shave their heads too. But let’s look at what they did shave – costs! US Airways saw a sharp improvement in its third quarter earnings, posting a net profit of $177 million versus a net loss of $78 million for the year-ago quarter.
The $255 million year-over-year improvement was achieved on a 2.3% rise in revenue to over $3 billion, and a 4% reduction in expenses to $2.8 billion.
US Airways might not yet be a low-cost-carrier in the classic sense (is there a classic sense anymore?…a question for another time) but if it can keep a tight control on costs, its LCC ticker symbol might not seem so out of place. (Photo from BritneyZone.com)