Analysts are warning that US Airways could face liquidation following last week's resignation of chief executive David Siegel, unless the airline pushes forward with vital cost cuts.
Siegel, who led the airline through an eight-month bankruptcy reorganisation that ended in March 2003 with annual cost savings of $1.9 billion, resigned suddenly in the face of rising union opposition.
In recent weeks Siegel had been considering further cuts due to the entry of low-cost rival Southwest into the heart of US Airways' territory.
CSFB analyst Jim Higgins says a "worst case scenario, a liquidation of US Airways, could trickle out of this turn of events", although he thinks Siegel's departure may help it achieve labour cost reductions that "appear necessary but are not necessarily sufficient to ensure its survival".
Siegel is to be replaced by US Airways board member and retired Lehman
Source: Flight International
