US Airways filed for Chapter 11 bankruptcy yesterday, declaring insolvency for the second time in 25 months and ushering in yet another period of anxiety for travelers, 8,000 local employees and the Pittsburgh-area economy.

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The nation's seventh largest airline made what US Airways chairman David Bronner called a "difficult but necessary" decision after failing to coax $800 million in concessions from its unions. Bronner said the airline remains a "attractive investment," but the only way it can survive bankruptcy is to lower its costs, the highest in the industry.

US Airways promised "no changes" to present or future flights and service as a result of yesterday's filing, made at a U.S. Bankruptcy Court in Alexandria, Va., the same place it filed in August 2002. Employees will continue to receive wages and benefits, and passengers' frequent-flier miles will be honored, according to a decision made by the Bankruptcy Court last night.

But pain is likely to result from the carrier's second descent into bankruptcy, which protects the company from creditors while it restructures. Local airline analyst Bill Lauer predicted that US Airways will lay off more employees and not be able to find the new financing necessary to escape bankruptcy, as it did in March 2003. Instead, he fears a second bankruptcy will end in a "slow liquidation" of the carrier's assets, including gates and planes.

"I am very concerned that this company is worth more dead than alive," Lauer said.

Local politicians, employees and union officials reacted with little surprise yesterday, saying they suspected a filing was in the offing. Airport officials argued that Pittsburgh International would survive US Airways' problems by attracting new carriers and cargo business.

Employees, though, were less optimistic yesterday. In the last two years, US Airways has eliminated almost 5,000 local workers, down from 12,700 to fewer than 8,000. Bill Pollock, chairman of the US Airways pilots union, said he was "disappointed" at the bankruptcy filing after all the sacrifices made by union members.

Local flight attendants union representative Teddy Xidas cited a union analysis showing the company could lay off as much as 30 percent of its 28,000-member workforce. The airline said it would try to preserve as many jobs as it could.

Many employees are still recovering from the last bankruptcy, when they gave up $1 billion in concessions.

But US Airways executives failed to predict the rise of fuel prices and the aggressive expansion of low-cost, low-fare rivals that cut into US Airways' market share, forcing it to slash ticket prices and lower the airline's revenues by $450 million more than expected this year.

US Airways came back to its unions this year and asked for an additional $800 million in annual cuts as part of a $1.5 billion "transformation" plan that would shift more flying to the East Coast and the Caribbean while stripping Pittsburgh of its "hub" status and cutting flights here.

It also ousted Chief Executive Officer David Siegel -- unpopular with the unions -- and enlisted former Wall Street executive Bruce Lakefield to coax the new concessions from a reluctant union members. Despite a straightforward manner that earned praise from many labor officials, Lakefield was no more successful than Siegel.

Filing for a second bankruptcy gives Lakefield a chance to do what Siegel did not do two years ago -- lower US Airways' industry-high costs enough to offer customers low fares and compete price-for-price with discount flyers. In bankruptcy, the company can attempt to negotiate new deals with unions. But the bankruptcy judge also has the power to enforce such changes if unions do not go along.

Lakefield hinted at that power yesterday, saying consensual labor agreements are "in the best interest of all parties," but if that does not happen, "we will need to consider the other alternatives provided for under the law."

But US Airways may find it more difficult to emerge from bankruptcy a second time. It is entering bankruptcy without new investors and new financing in place, unlike in 2002, when the Retirement Systems of Alabama outbid a Texas investor to become the company's largest equity holder and one of its largest debtors.

Instead, US Airways must survive with a "portion" of the $750 million in cash it has on hand, money that came from $900 million in federally backed loans it obtained in the last bankruptcy. And it must do it during the slow, post Labor Day travel period.

The company still owes $717 million on the federally backed loans. According to the company, the federal government and US Airways' other lenders have agreed that US Airways should continue to have access to the loan money while in bankruptcy, and that agreement will be presented to the U.S. Bankruptcy Court at a hearing today.

US Airways said yesterday it would file a reorganization plan with the court by the end of the year. Its filing yesterday listed assets of $8.8 billion and liabilities of $8.7 billion.

The biggest creditors in the second bankruptcy are the federal government, aircraft financier General Electric and the Retirement Systems of Alabama, a pension fund that stands to lose its $240 million investment in the airline. Bronner, who heads the Alabama pension fund and became chairman of US Airways as a result of the investment, has said he does not expect the airline to survive a second bankruptcy.

That leaves the door open to liquidation.

Lauer, the local airline analyst, said Bronner could acquire the loans still owed to the federal government and then look to sell the airline's gates and planes, hoping to make something on his original investment. "I am skeptical that a true reorganization is about to unfold in front of us," Lauer said. "What we may well see is what bankruptcy lawyers refer to as a liquidating (Chapter) 11."