US Airways Asks Employees to Work for Free

Chutzpah is a delightful Yiddish word that means approximately what “cheek” means in British-English. The man convicted of killing his parents exhibits this quality when he pleads for mercy from the court because he is an orphan. The same is true of the top management at US Airways. Having twice bankrupted the company, they destroyed any employee loyalty with pay cuts totaling 40% of the wages initially paid. Now, they want these same employees to work without pay over the New Year holiday. Better still to call in the liquidators.

The airline business has not been an easy one over the past four years – September 11 alone was enough to make Orville and Wilbur Wright rethink their invention. The elevated price of oil and its distillates (including aviation fuel) has only squeezed already thin margins. Yet, Southwest Airlines has managed to impress Wall Street Analysts enough to be a buy (or the equivalent) for such firms as UBS, CFSB, Fulcrum, Raymond James, Deutsche Securities and Blaylock and Partners. In other words, making money in civil aviation can be done. Just not by the guys running US Airways.

President Bush made a call on all Americans recently to volunteer more of their time to make their communities and neighborhoods better places. While this journal finds huge faults in many of the president’s ideas, his idea is a grand one. Just not in business – Abe Lincoln made sure that if a man turns up for work he gets paid.

Some analysts and pundits have said that the recent sick out at US Airways over Christmas was an example of labor cutting off its nose to spite its face. If there were any hope of saving the jobs in question, one could make a coherent case that this is so. However, the desperation of the company in trying to scrape together the cash it needs to keep flying, and the extremes to which it has been pushed to achieve any sort of rescue plan, foreshadows layoffs in the thousands.

During January and February, $260 million in aircraft debt and lease payments was to have come due but GE Capital Aviation Services negotiated a deal to avoid that. That deal, though calls for US Airways to exit Chapter 11 protection by June 30, 2005. There is no indication that, even with the latest round of pay cuts, the hemorrhage of cash has stopped.

A way out exists, but it will require an admission that US Airways as it currently exists can’t go on. Southwest Airlines recently took over ATA, which was also in bankruptcy. While ATA will eventually be liquidated, Southwest will keep it afloat was it is wound down. And the workers get their pay checks when they turn up to work.

© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.

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