Winner - America West Airlines
Award sponsor - GE Capital Aviation Services
Back in the days after 11 September 2001, the smart money had marked down America West among the airlines least likely to survive. Yet a couple of years later, under the youthful leadership of chief executive Doug Parker and his team, the group has become one of the surprise financial turnaround stories among the US majors, emerging last year with a rare display of operating profits.
The airline was already facing trouble well before the terrorist attacks. Widely derided as "America Worst", it had established a record of poor, if any, service, with just 64% of flights arriving on time.
Parker and his team set about a radical transformation of America West from a poorly performing legacy carrier into a full-service, low-fare carrier for value-conscious but service-desiring business travellers as well as its traditional base - leisure travellers.
"America West seeks to attract a segment above those who decide exclusively on price, but who also require convenience," says Parker.
America West was already in the process of turning around the carrier's poor performance when the aftershock of 11 September 2001 hit, threatening to derail the project. At the time of the attacks, the board had actually been in the midst of negotiations for fresh financing. That inevitably disappeared.
Instead America West became the first major US carrier to win a federal loan guarantee in the stabilisation programme set up by the US government. The group is now widely held as the example of how government aid should work. As Parker has often noted, the government actually made money on the deal.
America West did something else radical. At a time of growing passenger resentment it took the lead in simplifying its complex fares structure, doing away with the mass of ticket restrictions including the much-hated Saturday night stay requirement.
Throughout, Parker and his team kept the loyalty of the America West workforce, in part by "walking the walk as well as talking the talk". For instance, Parker took no salary for the balance of 2001 after the attacks, while senior executives took a 25% pay cut and other managers were laid off. But America West did not demand pay cuts from its workers, and has since achieved a pilot contract that keeps the carrier's wage structure at market rates slightly below those of the major carriers.
Operationally, it has eliminated its unprofitable Columbus, Ohio hub, focusing on its two traditional hubs, Phoenix and Las Vegas, at both of which it thrives in competition with Southwest Airlines.
At a time when other carriers are at best reluctant to grow or are static, America West has continued growing, with expansion of 8-10% set for this year.
It has converted options into orders for 22 Airbus A319/320s. Above all, the carrier has thrived on its strategy of lower, simpler fares, posting a net profit for the first quarter of this year, its fourth consecutive quarterly profit, and has been on track for a 2004 annual profit, although the spike in fuel costs has made the rest of the year a challenge.
Source: Flight Daily News
