The US Airways (NYSE: LCC) ticker symbol says it all: LCC = Low Cost Carrier. With its latest announcement, the airline may want to change it to LEC -- Low Expense Carrier. In an attempt to keep pace with the plunging travel market, US Airways is cutting 1,000 jobs next year, shoving almost all its flying to its three hubs (Philadelphia, Phoenix and Charlotte) and Washington. Several international routes are being cut.
The airline reports that routes from its hubs have been profitable. Currently, US Airways pushes 93% of its flights through these airports, a rate it seeks to push up to 99% in 2010.
For the high-potential shuttle routes – involving Boston, New York and Washington – the airline isn't ducking out but it is changing to Embraer 190 planes, which are smaller and less expensive to operate.
While domestic travel is expected to drop for US Airways next year, international flying is expected to edge higher. Nonetheless, flights from Philly to London Gatwick, Birmingham, Milan, Shannon and Stockholm are being reduced, and the airline is planning to ditch its government permission to fly between Philadelphia and Beijing (which it never put to use anyway).
The layoffs at LCC will involve 600 passenger and ramp service workers, 200 pilots and approximately 150 flight attendants. Crew bases in Las Vegas and at LaGuardia will shut down on January 31, 2009, with the Boston one closing on May 2.
US Airways posted an $80 million loss for the third quarter and is expected to finish 2009 in the red. Last year, it lost $2.3 billion.
[Photo via matt.hintsa via Flickr]
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
