Plane Fast and Loose With the Truth
What went wrong at US Airways?
U.S. Sen. Rick Santorum has it all figured out. Incorrectly
Things are grim at US Airways, which filed for bankruptcy protection over the past weekend. The air carrier previously declared bankruptcy two years ago, emerging in March 2003. The airline had more than $300 million in operating losses in the 18 months ended June 30. It has wrung $1.2 billion in pay and benefit concessions from employees since 2002, according to The Philadelphia Inquirer. US Airways has said it needs to cut another $800 million in employee obligations. And it says it may stop payments to its underfunded pension plan.
Of course, the rest of the legacy airline industry isn't doing all that much better. Fuel costs, overcapacity, salary and pension costs, and a post-9/11 travel slump are creaming the business.
So, after meeting with US Airways management Tuesday, whom does Santorum blame for US Airways' demise? Why, he blames the company's airline union, specifically four union chiefs who opposed having US Airways pilots vote on a concession-bearing contract proposal.
"The pilots' union got their pound of flesh," the Pittsburgh Post-Gazette quoted the Pennsylvania Republican saying. "These four individuals decided they could take the airline down, and they did."
Blaming the pilots for US Airways' bankruptcy reminds us of a memorable footnote to the demise of Enron. On the day that the energy trader filed for bankruptcy in 2001, Enron sued the energy firm Dynegy (NYSE
YN - News), alleging that Dynegy, by backing out of a deal to purchase Enron, "has torn a hole in Enron's business." But back then it was clear, even before all the guilty pleas started pouring in, that Enron's hole predated Dynegy.
Yes, blaming US Airways' Chapter 11 filing on the pilots union is like drinking a case of beer, driving at 70 mph, and blaming the resulting accident on the tree you crash into. US Airways was a bankruptcy waiting to happen; the pilots union just happened to be the nearest tree
The Five Dumbest Things on Wall Street This Week
What went wrong at US Airways?
U.S. Sen. Rick Santorum has it all figured out. Incorrectly
Things are grim at US Airways, which filed for bankruptcy protection over the past weekend. The air carrier previously declared bankruptcy two years ago, emerging in March 2003. The airline had more than $300 million in operating losses in the 18 months ended June 30. It has wrung $1.2 billion in pay and benefit concessions from employees since 2002, according to The Philadelphia Inquirer. US Airways has said it needs to cut another $800 million in employee obligations. And it says it may stop payments to its underfunded pension plan.
Of course, the rest of the legacy airline industry isn't doing all that much better. Fuel costs, overcapacity, salary and pension costs, and a post-9/11 travel slump are creaming the business.
So, after meeting with US Airways management Tuesday, whom does Santorum blame for US Airways' demise? Why, he blames the company's airline union, specifically four union chiefs who opposed having US Airways pilots vote on a concession-bearing contract proposal.
"The pilots' union got their pound of flesh," the Pittsburgh Post-Gazette quoted the Pennsylvania Republican saying. "These four individuals decided they could take the airline down, and they did."
Blaming the pilots for US Airways' bankruptcy reminds us of a memorable footnote to the demise of Enron. On the day that the energy trader filed for bankruptcy in 2001, Enron sued the energy firm Dynegy (NYSE
YN - News), alleging that Dynegy, by backing out of a deal to purchase Enron, "has torn a hole in Enron's business." But back then it was clear, even before all the guilty pleas started pouring in, that Enron's hole predated Dynegy.Yes, blaming US Airways' Chapter 11 filing on the pilots union is like drinking a case of beer, driving at 70 mph, and blaming the resulting accident on the tree you crash into. US Airways was a bankruptcy waiting to happen; the pilots union just happened to be the nearest tree
The Five Dumbest Things on Wall Street This Week
