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Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 4/98 US AIRWAYS BOUNCES BACK STRONGLY by Andreas Spaeth It was literally five minutes to twelve. In the fall of last year, the fate of US Airways, the world's fourth biggest airline (according to the number of passengers), was on a knife's edge. There were only two possible alternatives: Would it be possible with a tremendous feat of strength to act as a major company within a few years or compete with the "cheap" competition for ever more? The man at the top, industry veteran and ex-United Airlines Boss Stephen Wolf was only going to consider the first option. Everything depended on the companies 4800 pilots, who had to give their consent to a new pay agreement. The procedure had been drawn up over difficult months. In the meantime Airbus Industrie got more and more impatient. For the last time the European plane constructors granted an extension, after which they in turn were going to axe a huge contract with US Airways for up to 400 aircraft because of the lack of a firm commitments. Not only was this contract, which was very important to the airline, up in the air for some time, all other big projects were also put on ice. Then finally, on 31 October 1997, the pilots' union agreed to the contract, in which their extremely high salaries were brought into line with those of other pilots. The path ahead was clear. Last year, in advance of this decision, the company changed its name from USAir to US Airways. The seemingly marginal change of name in fact represents a re-launch of the company. This has cost millions and is supposed to finally shake off the negative image associated with the old name. The most obvious changes are the new colours black and red. Stephen Wolf himself is said to have had a hand in the design. The causes of most of the old USAir's problems were rooted in its history: The company was a thrown together conglomerate made up of six single amalgamating companies. Its origin was Allegheny Airlines in Pennsylvania. Since 1986, Empire and Piedmont Airlines from the East Coast and Pacific Southwest Airlines (PSA) from the West, had joined. The consequences are still obvious today: A chaotic collection of 390 jets make up the fleet, with no less than ten different models in service. Many of them, like the 55 DC-9-30 which were built in 1967, are real veterans. The oldest jets of this type and the remaining Fokker F-28 will be taken out of service at the end of this year. The inefficiency of the US Airway's fleet is shown by the fact that the company operates on an average of only 57 aircraft of each type. American Airlines, for example, operates on an average of 135 planes of each model and United Airlines on 84. Around the end of 2003 US Airways' entire narrowbody-fleet will be exchanged with Airbus planes. That is with the exception of the Boeing 757. Firm orders have been placed for 124 A319, A320 and A321 jets. Delivery of the first six A319 from Hamburg-Finkenwerder was agreed for the autumn of 1998. The main target of this forceful expansion is to focus on transatlantic flights. US Airways has only two percent of this market, while international business deriving from flights to Canada, the Caribbean and Europe only accounts for seven percent of its turnover. Until now, US Airways was only flying from Philadelphia and Pittsburgh to Frankfurt, Munich, Paris, Rome and Madrid in Europe. This summer Amsterdam and London-Gatwick will follow. The company had to give up servicing London, because its alliance with British Airways failed, and BA used their 24,6 per cent stake to oust US Airways from Heathrow. The Americans - like many other US carriers - are trying again to be granted landing rights. To be able to stay in the transatlantic market, US Airways has to first complete its fleet. Currently there are only twelve Boeing 767-200ER in service for long-haul flights. No other carrier is operating across the Atlantic with such a small fleet. "We would have liked to order new planes at the beginning of the nineties," Senior Director Richard Weintraub commented. "However our desolate financial situation did not allow this." The company suffered three billion dollars in debt. In the industry, there was hardly anyone, who did not see the vultures circling above. However, with the involvement of Stephen Wolf this started to change for the better. Now that US Airways are two billion dollars in the black, the time has come for expansion. The decision to go with either A330 or Boeing 777 will be made soon. The company sees great potential in the transatlantic flight business. Today, it is by far the biggest carrier on the East Coast, and 70 per cent of all air travel to Europe is envisaged to start from here. Philadelphia Airport will be expanded with financial help from US Airways to the tune of 300 million dollars. Two new terminals will transform this airport into a regional and international hub. Philadelphia with its five million inhabitants is the fourth biggest catchment area in the USA. In the next few years the number of European destinations will be doubled; the new aircraft will have three classes on their long distance flights. However, despite the upturn there is still a pressing problem that is bothering US Airways - the costs. These, when compared to the competitors, are still extremely high. For domestic flights they are "over twelve cents" per offered seat mile, while Northwest, Delta or United operate at eight cents. This problem got worse when low-cost carriers like Southwest Airlines and Delta Express poached from US Airways' main markets at the East Cost. The company is flying in direct competition to Southwest on 20 routes and is working at a loss. "If we gave up these routes, we would soon go out of business," Richard Weintraub explains. This is why there had to be a new solution. It is called "MetroJet" and will start operating from June 1st. To start with there will be five Boeing 737-200 with minimal "no frills" service. There will be five destinations on the East Coast, with the emphasis being on routes to Florida. By the end of 1998, that arm of the company will supposedly be operating 20 planes. The pay agreement allows the operation of 54 jets. Only time will tell, whether this plan will be successful. Continental withdrew its low-cost daughter only a short time after it started to operate. However, United's daughter is flying successfully. From page 24 of FLUG REVEU 4/98 Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 4/98 Copyright 1998 by Motor-Presse Stuttgart. All rights reserved. Last updated March 6, 1998 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany