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    US Airways Files for Bankruptcy Protection
    Barry Wood
    Washington
    12 Aug 2002 04:41 UTC

    US Airways planes move near the gates at Philadelphia International Airport in this file photo
    The seventh-largest U.S. airline, U.S. Airways, Sunday sought protection from its creditors under the American bankruptcy law. The airline will continue operations while it seeks a solution to its financial problems.

    Based in suburban Washington, U.S. Airways is the first major American airline to declare bankruptcy since the September 11 attacks jolted the U.S. airline industry. U.S. Airways incurred a net loss of more than two billion dollars last year and has continued to lose money this year. The company employs 40,000 workers and operates 340 airplanes. Its routes are concentrated in the northeast of the United States.

    Company management say U.S. Airways has obtained emergency private sector financing, as well as government funds, to assure continuing operations. Not long after September 11, the company laid off 11,000 workers and has been seeking salary concessions from its pilots and mechanics.

    This is the second major bankruptcy to impact the Washington, DC, area in the past month. In July, the number-two U.S. telecommunications company, WorldCom, declared bankruptcy. WorldCom's MCI long distance subsidiary, like U.S. Airways, is based in Northern Virginia.

    U.S. Airways has long been regarded as the most financially vulnerable of the major U.S. airlines. The company has high labor costs and operates in a very competitive market. A recent attempt to merge with United Airlines, which is also financially weak, was rejected as anti-competitive by government regulators.

     
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