Bankrupt US Airways lost $232 million in the three months ending Sept. 30, a dismal performance underscoring its desire to slash costs and remake itself into a leaner, more efficient carrier.

The third-quarter loss at the nation's seventh-largest carrier capped a brutal period of red ink for an industry pummeled by record-high fuel prices and weak fares.

Four air carriers, including US Airways, are now operating under the protection of bankruptcy court and a fifth, Delta Air Lines, is considering that option despite a $1 billion cost-cutting deal reached this week with its pilots, the highest paid in the industry.

Among the nation's largest airlines, only Delta and bankrupt United Airlines recorded bigger third-quarter losses than US Airways, which blamed its troubles on a 29 percent rise in fuel prices, $20 million lost to hurricanes and an August computer malfunction that caused flight delays and cancellations. Revenues were up slightly year-to-year, as was the percentage of seats filled.

But costs, measured by the amount of money it takes to fly one seat one mile, also rose 2.3 percent year-over-year, and its overall losses for the quarter were $142 million higher than same period in 2003, when it lost $90 million. In the last nine months, US Airways has lost a total of $375 million, and an airline executive warned U.S. Bankruptcy Court earlier this month that it could lose $650 million to $700 million for the full year.

"It looks like you have snowball rolling downhill here," said local airline analyst Bill Lauer. "I think it will take a heroic effort to avoid cash starvation sometime around the end of the year."

It is vital for US Airways to maintain a sizeable cash cushion as it tries to reemerge from bankruptcy. It needs the reserves to offset the higher fuel prices and to withstand a potentially big drop in bookings from passengers worried about its ability to keep flying.

During the third quarter, the airline burned through more than $2 million a day, ending with $757 million in available day-to-day cash. That amount is slightly better than had been predicted by the company, which told a U.S. Bankruptcy Court that it would have only $687 million in available cash on Oct. 1 and that it would not survive the winter travel season unless it had at least $400 million to $500 million of cash on hand.

	US Airways Watch Southwest Airlines Chief Executive Officer Gary Kelly told reporters yesterday that "we would absolutely" be interested in purchasing some US Airways assets if the carrier were to go out of business. Southwest wants to add more flights in Philadelphia, a US Airways hub, if it can acquire more gates. Southwest would also be interested in buying some Boeing 737s now flown by US Airways. The top officers at US Airways cost the company a combined $23 million over a 12-month period ending with the airline's bankruptcy filing on Sept. 12. The 32 executives, 10 of whom are no longer with the company, earned a combined $15.2 million in compensation, were awarded $7.2 million in benefits, racked up $365,374 in travel during the 2003 calendar year and $185,119 in expense reimbursements, according to documents filed with the U.S. Bankruptcy Court. A U.S. Bankruptcy Court judge named a five-member committee of US Airways retirees yesterday to negotiate with the airline over any cuts in retiree health benefits. A company lawyer told the court that the cuts requested will be "substantial." US Airways anticipates that it will spend about $70 million next year on benefits for 10,800 retirees. The committee's first meeting with the company will be Nov. 2. If an agreement can not be reached, the company intends to ask the judge in mid-November to impose the cuts.

Those warnings, and the suggestion that it could be forced to liquidate early next year without assistance, helped US Airways convince U.S. Bankruptcy Judge Stephen Mitchell to impose a temporary 21 percent pay cut on many unionized workers through Feb. 15.

The airline is still seeking $950 million in long-term concessions it says it must have to be able to exit Chapter 11 and take on the nation's most profitable low-cost carriers, Southwest Airlines and JetBlue Airways, both of which made money in the third quarter.

The pilots and three other unions have agreed to $306 million in annual cuts. Holding out are the flight attendants, machinists and passenger service workers.

The airline has informed those groups that without consensual deals, it will ask the bankruptcy judge in mid-November to throw out the union's collective bargaining agreements.

Such a move could precipitate a strike, according to officials with the International Association of Machinists and Aerospace Workers and the Communications Workers of America. Both are discussing a strike as an option in the event that negotiations do not produce new agreements.

The CWA, which represents gate agents and reservations workers, mailed a ballot to its 6,000 members this week asking for their approval to launch a strike if the two sides "can't reach a fair agreement," said CWA spokeswoman Candace Johnson. Ballots are due back mid-November.

"It doesn't mean there would be a strike," she said. "It means [the CWA] will continue to work hard to negotiate with management." But the process is already strained, she said, from the "draconian demands" made by management.

In the last week, the company has made new proposals to the three unions. The proposals to the flight attendants and passenger service workers ask for large pay cuts, while the machinists are being asked to allow the company to farm out any type of work currently done by the union. A top IAM negotiator claims the deal would result in about 2,800 job losses.

Reed Smith bankruptcy lawyer Eric Schaffer said unions have the power to strike only if the judge throws out their agreements. He also said negotiating strategy is at play here.

Asking union members to authorize a strike "strengthens their hand at the bargaining table," he said, and allows unions officials to argue that any abrogation of their contracts "will be a Pyrrhic victory."