I agree with most that US Airways must fix its revenue model if the company is to survive. Perhaps the silver lining in WN's decision to enter the PHL market is that it will force management to revamp the fare structure to be more like WN/HP/FL/TZ/B6 etc.
That said, I also agree with Dave S. that the company's cost structure needs to be fixed, though it seems to me that employee wages are NOT the place to cut. Productivity (and this is again NOT to say that US employees are lazy!!!) is a place where Southwest, for example, has a clear advantage over US Airways. Assuming an average level of 36,000 employees (the company says they have "more than 35,000" employees), WN generated 1.66 million ASM's per employee in the first ten months of this year. Using US Airways' number of 28,381 employees in November, the airline generated 1.52 million ASM's per employee during the same period. While a hub-and-spoke system in the highly congested East is likely to be less efficient, the fact remains that WN was able to generate nearly 10% more ASM's *per employee* with shorter average stage lengths and a smaller average aircraft size (which both reduce productivity). And even with comparable pay scales, Southwest has far fewer topped-out employees given that they have net growth since 1989. The problem is, "improving productivity" without increasing the amount of flying done by the company means layoffs.
Employee productivity isn't the only piece of the picture. US operates 60 daily mainline flights from 18 gates at BOS. WN operates 180+ daily flights from 19 gates at LAS. While I concede that BOS gates are a strategic asset for the company, they certainly are not free. Southwest operates nearly as many departures from PHX as US operates from PHL, and yet they use just over half as many gates at PHX compared to US at PHL.
Management needs to decide whether they are going to provide a better product (aside from seat assignments) to customers in order to justify somewhat higher average fares. Taking amenities away from passengers gives them little reason to book US Airways vs. the LCC's or the other network majors. The broken fare model will become more and more untenable as other airlines poach US Airways' most profitable routes.