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US Air Faces Government Probe, Key Financial Dates

The US Department of Transportation says it is looking into the mess caused by Comair’s computer glitch and US Airways’ sick-out that caused massive disruptions over the Christmas weekend.  I have no idea what it means when the government says it will investigate the situation, but I’m pretty certain nothing will change because of it.  I think we’ll end up chalking it up to bad timing (would we even be hearing about this if it occurred over the weekend of February 7th?)

In other bad news for US Airways, the Wall Street Journal (subscription req’d) notes that the airline is facing several important dates in January:

US Airways has
until Jan. 6 to get mechanics and ground workers to agree to new contract
concessions. If not, a bankruptcy judge can cut pay and benefits and write
new work rules. Other unions have already tentatively agreed to cuts with
the company. If mechanics and baggage handlers protest, travelers could
face delays, lost bags and canceled flights.

Eight days later, US Airways faces sizeable financial hurdles. It must
come up with another $100 million in new cash or cost cuts to satisfy terms
of a deal with General Electric Co. And the U.S.
government, which has been letting US Airways use cash held as collateral
for a government-guaranteed loan, could pull the plug on the loan on Jan.
14, although analysts consider that unlikely. If the labor situation is
ugly, however, the financial forbearance could end, and the airline could
be at risk of shutting down.

If I can get around to pulling together my list of top 10 predictions for ’05, the disappearance of US Airways is at the top of that list.

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