US Airways, having sealed its long-awaited pilot deal, is pressing on with the acquisition of the former Trump Shuttle operation, which flies under the group's colours on the US East Coast.
US Airways had expressed interest in acquiring the remainder of the shuttle service when it came up in May, but had put the purchase on hold pending agreement by pilots on a cost-cutting contract which now goes into effect on 1 January. US Airways already holds a 47% stake in the shuttle operation, which is said to be making healthy profits and has been valued at around $285 million.
Entrepreneur Donald Trump had acquired the shuttle service from Eastern Airlines in 1988, but, following the collapse of his business empire five years ago, it was put into the hands of creditors. US Airways (then US Air)stepped in to sign up a a ten-year management contract with the new group in 1992. That gave US Airways the first refusal to acquire the remainder of the business within five years at a price set by a third-party evaluator - that deadline ran until 23 November, 1997.
American Airlines said that it was prepared to step in to buy the high-frequency shuttle operation if US Airways was unable to complete the purchase. American would have operated the service as an integral part of the airline, increasing its presence in the north-eastern USA. Delta Air Lines also operates a competing shuttle service.
The US Airways Shuttle flies 15 round-trips daily between Washington National and New York's La Guardia, and 17 round-trips between La Guardia and Boston Logan using 12 Boeing 727-200s.
US Airways is reported to be ready to put aside a provision of $115 million in the second quarter of 1998 to cover the costs of the early-retirement programme under the deal struck with its pilots union. The deal programme could cover as many as 350 senior pilots.
Source: Flight International
