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Fri, Dec 31, 2004 - Page 12 News List

Next two weeks critical for US Airways

AP , PHILADELPHIA

With its customers' confidence shaken, its employees nervous and competitors cutting fares, US Airways is entering a critical two-week period that may determine whether the airline survives.

The seventh largest US air carrier is bankrupt, and its financial problems revealed themselves to the public last week when the company was unable to handle a combination of bad weather and employee no-shows over the Christmas holiday.

The airline was still working this week to deliver the last of an estimated 10,000 bags that piled up at its hub in Philadelphia when too few workers were available to handle them. Some bags weren't expected to reach their owners until the weekend.

Flight schedules were largely back to normal by Monday, but other major tests are coming quickly.

US Airways Group Inc has said that if it can't lower labor costs immediately, it will likely begin liquidation after an interim financing deal with the government's Air Transportation Stabilization Board expires on Jan. 15.

Pilots, reservations agents and gate agents have already agreed to salary cuts, but agreements with unions representing other workers aren't yet complete.

Flight attendants have been voting by telephone for several days on ratification of a new contract that would slash their pay too. Results are expected to be announced next week.

Talks with baggage handlers and mechanics are continuing, but the airline has asked a bankruptcy court judge to summarily cancel current union pay deals if a new deal can't be reached soon. The court is expected to rule next week.

Another key hurdle will come this weekend, when US Airways experiences another surge of travel around the New Year's holiday.

The company took the unusual step on Tuesday of asking employees around the US whether they would be willing to travel to Philadelphia International Airport between now and Jan. 3 to work as unpaid volunteers supplementing the airport's regular staff.

The company stressed that employees already scheduled to work this weekend would be paid their regular rate, but said it hoped to find volunteers willing to donate time greeting passengers, answering questions, serving coffee, directing foot traffic through the terminals and lending a hand in baggage claim.

Company spokesman David Castelveter said the airline's managers planned to be among those volunteering their time.

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