But Not AS Red

US Airways, the nation's seventh-biggest airline, says it's not bleeding red ink as bad as it was before entering Chapter 11 bankruptcy, but is behind on its plans for economic recovery.

"Throughout the year, we made progress in reducing our losses, but regrettably, we are behind in our plan for achieving sustained profitability," said US Airways CEO David Siegel (below, right).

He blames the continuing dominance of low-cost carriers like Southwest, which plans a direct attack on Siegel's airline by starting service to its hub in Philadelphia (PA) in May.

In the fourth quarter of 2003, US Airways went a long way toward stemming the tide of red ink. It reported losing $98 million, compared to a loss of $794 million in the fourth quarter of 2002. Its cost per seat-mile was down from 10.22 cents to 7.2 cents -- better, but still among the highest in the airline business.

Now, US Airways is reportedly considering selling off some of its remaining assets. Chief Financial Officer Neil Cohen says companies like Southwest and JetBlue operate at costs 25-percent lower than US Airways. Now, he's contemplating becoming "Neil the Knife" -- slashing costs wherever he possibly can.

"Everything is on the table, from distribution costs, to labor costs, to how we schedule our airline," he said in a statement.

FMI: www.usairways.com