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US Airways CEO out
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November 27, 2001: 12:39 p.m. ET
Chairman Stephen Wolf will assume CEO duties from Rakesh Gangwal.
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NEW YORK (CNN/Money) - US Airways Group Inc. CEO Rakesh Gangwal is leaving the troubled carrier, the nation's No. 6 airline announced Tuesday, and his duties will be assumed by Chairman Stephen Wolf.
The Arlington, Va.-based airline said Gangwal, who was also president, is leaving to pursue a career in equity and venture capital.
Gangwal's departure comes about two weeks after he could have received a $21 million payment for leaving that had been negotiated as part of the proposed but since abandoned purchase of the company by United Airlines owner UAL Corp. (UAL: up $0.48 to $17.19, Research, Estimates).
According to a filing US Airways (U: up $0.05 to $8.46, Research, Estimates) made with the Securities and Exchange Commission in August, the company's top executives could have elected to leave the company between Oct. 12 and Nov. 11 with the full multi-billion dollar severance package they would have been due if the purchase had not been blocked by U.S. regulators.
But the company announced in the wake of the Sept. 11 terrorist attacks that none of executives chose to take those payments, and that Wolf and Gangwal would go without pay through the end of the year.
Gangwal is the second major airline executive to leave his job since the Sept. 11 attacks. James Goodwin, UAL chairman and CEO, resigned Oct. 28 under pressure from the airline's unions, which have two board seats at the employee-owned company.
US Airways had been struggling to return to profitability even before the attacks sharply reduced demand for air travel. The airline was particularly hard hit since Washington's Reagan National Airport remained closed for three weeks longer than other airports, grounding not only the airline's major hub but its key Washington-New York Shuttle service.
While most other airlines managed to keep losses below forecasts for the third quarter, US Airways' third-quarter loss exceeded even the most pessimistic estimates from industry analysts.
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The company has continued to insist that despite rising losses it has the financial resources to weather the industry's current crisis without seeking bankruptcy court protection from creditors, but its stock, down sharply before the attacks, has fallen another 27 percent since.
US Airways (U: up $0.05 to $8.46, Research, Estimates) stock fell after Tuesday's announcement but rebounded to move slightly higher in afternoon trading. 
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