More cutting is under way at United, with another 1,000 salaried positions slated to go before the end of 2007. Nor has United's financial performance met Wall Street's expectations. United stock climbed as high as $43 a share on March 22, but has since traded at less than $30 a share.
Post-bankruptcy US Airways began trading at $21.05 in September. Its value has more than doubled, with the stock trading at about $50 a share in recent weeks.
Merrill Lynch analyst Michael Linenberg downgraded US Airways recently, from "buy" to "neutral." Record fuel prices were the primary concern listed by Linenberg, who noted that "industry fundamentals have not been this good in years."
In many cities, the rejuvenated US Airways has benefited from the collapse of Independence Air, a Washington, D.C.-based carrier that stopped flying after entering bankruptcy last year.
"That's been a key element for them," said Helane Becker, aviation analyst with the Benchmark Co.
"We think they made a lot of money in the quarter that just ended," she said. "I think they've become one of the largest low-cost carriers."
America West was one of the first airlines founded after industry deregulation. The airline grew rapidly, but continued losses and the rise of fuel prices related to the Gulf War forced it into bankruptcy in 1991. It emerged three years later, with a smaller fleet and fewer employees.
A rocky history
US Airways traces its roots to Allegheny Airlines, a Pittsburgh-based carrier in the 1950s. It merged with several carriers during its history, including Lake Central Airlines in the 1960s and Mohawk Airlines in the '70s. In 1979, it adopted the USAir name.
In the 1980s it merged with Pacific Southwest Airlines and Piedmont Airlines, and in 1996 changed its name to US Airways.
Citing financial challenges, the airline announced plans to be absorbed by United Airlines in 2000, an effort abandoned a year later when federal approval for the deal appeared unlikely. Financial problems for US Airways worsened following the terrorist attacks in 2001. The carrier entered bankruptcy in 2002 and again in 2004.
The deal with America West began to take shape in the summer of 2005. At the time, America West was losing money, but Parker had a plan that he argued would strengthen both airlines.
"It was a way of rationalizing the system for both of them," said airline analyst John Pincavage. "America West was already strong in the West. US Airways had Charlotte and Philly hubs. They were able to take the different parts and build on their strengths in different sections of the country.
"They could take the low costs US Airways had to achieve in bankruptcy and add them to America West. It gives them a decent chance for doing very well."
US Airways also has benefited from its willingness to adopt some elements of the low-cost-carrier template and abandon others. Unlike discount airline leader Southwest Airlines, US Airways has first-class cabins, a fleet with multiple aircraft types, international service and an emphasis on a hub airport system.
"Being a low-cost carrier is not as simple as being the same as Southwest Airlines," said Scott Kirby, executive vice president of sales and marketing,
For example, having a single fleet type, as Southwest does with the Boeing 737, would save about $10 million a year but cost millions more in lost revenue opportunities, he said.
"Multiple fleet types are a big cost when you're a small carrier, but when you've got 50 or 60 aircraft, there are really no economies of scale to be gained," Kirby said.
Similarly, having first-class seating increases costs about 5 percent annually, but that is offset by customer demand for such service, he said.
"We get a revenue premium for that first-class product," Kirby said.
Where the comparison to a discount carrier is more apt is in labor costs. Wage scales rank with those of other discount carriers. US Airways ended its pension plan while in bankruptcy.
Union workers, particularly those at US Airways, gave up millions of dollars in concessions during bankruptcy. Workers at US Airways watched as their jobs were cut and outsourced. Those that remained went through three rounds of pay and benefit reductions.
"We participated in the worst of times, and we expect to equally participate in the best of times," Capt. Jack Stephan, of US Airways' pilots union, said recently.
A year ago, as US Airways slid into its second bankruptcy, pundits predicted death. Against long odds, Charlotte's dominant carrier found a way.
Talk of more mergers in the U.S. airline industry is heating up again as the major carriers recover from five years of extreme pain and more than $30 billion in losses.