Case 7-2 U.S Airways

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Maureen Abajah LOG 125 Chapter 7 Case 7-2 U.S. Airways Overview: US Airways is and has been beleaguered with a myriad of issues, from financial issues to consistently below average ratings when it comes to baggage handling and customer service. They have filed bankruptcy several times and merged with other airlines and now have to work on a way to get to a competitive edge in the industry with all issues facing air carriers in general. Case Questions: 1. If you were the CEO of US Airways, what would you do to confront the competition from its low cost competition? Based on the summary table provided in the text book – the first thing that jumps out is how disproportionate the labor volume/number of employees is to the number of aircraft that the company has. The company has to make some tough decisions in streamlining the labor force to reduce the cost of labor and make itself more competitive with its peers in an industry where competition is stiff at the least. In addition to this the idea that they will be using more regional jets e.g. Mesa Air in medium markets may help alleviate operating costs that are also currently very high. US Airways may also want to look into the option of merging/working with one of the more successful low cost carriers as a strategic partnership 2. Can US Airways survive by remaining the same carrier it is today? Absolutely not. If this airline continues on the same path that it is currently following they will definitely end up closing shop and liquidating assets to pay back creditors. Clearly something is broken and it has to be fixed and status quo is not going to bring them to where they need to be. Three times since 9/11, US Airways workers have agreed, after great outcries, to big pay and benefits cuts, the outsourcing of thousands of jobs and the shutdown of their pension plans. How long with this

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