Union leaders blamed US Airways’ Christmas meltdown on understaffing and bad planning, dismissing accusations that workers had staged a mass “sickie” to penalise the bankrupt airline for slashing their pay.

US investors cheered by falling oil prices and improving jobs prospects sent stocks higher today, hoping that the news signals a renewal of economic strength and a fall rally in stocks.

US Airways Group, hit hard by a slump in travel after the September 11 terrorist attacks, filed for bankruptcy protection, the company said.

Share prices were lower in early trade, after stronger than-expected inflation and labor data intensified the market's concerns that the Federal Reserve is poised to raise rates soon, dealers said.

Three more US airlines have announced massive job cuts following last week’s attacks on the World Trade Centre in New York and the Pentagon in Washington.