NEW YORK, Sept 13 (AFP) - The bankruptcy filing of US Airways highlights the still-fragile condition of the US aviation industry three years after the September 11 attacks, with more turbulence looming, analysts say.
US Airways filed for Chapter 11 protection Sunday, less than 18 months after emerging from its 2002 bankruptcy filing, after failing to win sufficient concessions from its unions.
The carrier joins United Airlines in court supervision, with others -- notably Delta Airlines and low-fare carrier ATA -- teetering on the edge.
Some analysts worry that more bankruptcy filings by major carriers could start a domino effect that would send others to the courts for protection.
"If they really drastically cut back on their costs, the other guys will have to match that or eventually they will be facing bankruptcy," said Ray Neidl, an aviation analyst at Calyon Securities.
Carriers have been hit by bad weather and skyrocketing fuel prices on top of fierce competition and high labor costs. And the problems appear to be trickling down from the traditional airlines to some of the new, low-cost carriers.
For US Airways, concessions worth close to two billion dollars from 28,000 employees starting in 2002 were not enough.
David Bronner, US Airways non-executive chairman, called the move a "difficult but necessary decision" and said he hoped the airline could remain viable
"I remain convinced that a restructured US Airways with competitive costs and its route network focused on the eastern half of the US and the Caribbean is an attractive investment," said Bronner.
"While the airline has done a lot of things right since it emerged from Chapter 11 last year, the business plan that we thought would succeed proved to be insufficient as low-cost carriers have turned the industry on its head over the past year."
Delta Air Lines announced an aggressive restructuring plan Wednesday that would cut 6,000 to 7,000 jobs over the next 18 months. Delta said it was targeting more than five billion dollars in annual savings by 2006 and was on track to deliver nearly half of that total by the end of this year.
But chief executive Gerald Grinstein warned that bankruptcy remains "a real possibility" for the third largest US airline.
Traditional full-service carriers have not been able to recover from the September 11 attacks and recession in the United States.
A rise in tourism in 2003 brought a ray of hope but airline companies have also had to contend with cut-throat competition from low cost carriers, rising fuel prices and lingering fears and complications linked to terrorism.
In early September United Airlines, which is working on a plan to emerge from bankruptcy, said it would cut more jobs to reduce costs.
Even low-cost carriers, until now relatively unscathed, have started to feel the pinch.
JetBlue Airways said recently it was expecting profits sharply lower than expected for the third quarter of 2004 because of rising fuel costs and flights cancelled due to hurricanes in Florida over the last month.
The US Airways filing comes days before the airline is due to make a 110 million dollar payment to its employees' pension plans, which it may seek to delay.
While some carriers such as Continental and America West have been able to emerge from bankruptcy, it could be difficult for US Airways a second time, which could face the loss of lucrative business travel if fails to show a clear turnaround path.
"If they don't see a lot of green lights by Thanksgiving (late November), US Airways' revenue is going to start to suffer," said Kevin Mitchell, chairman of Business Travel Coalition, an advocacy group for corporate travel managers.