US Airways is moving to catch up with the industry's budding recovery with two noteworthy steps - shrinking a hub and outsourcing maintenance.
The carrier, which emerged from bankruptcy court reorganisation on 31 March, may pull out of its Pittsburgh hub as early as next winter if it cannot lower airport costs there. It has also gone to court to defend a major outsourced maintenance contract.
While most majors have discussed - and threatened - such measures as important cost-cutting steps, US Airways, which has some of the highest costs in the industry, has gone farther than others, and the outcome of its efforts may set precedents for the industry. US Airways announced in October it would not post a profit for the third quarter.
The long-running negotiations between US Airways and Pittsburgh, now moving toward a resolution, have shaken the airport and finance worlds, overshadowing other recent hub changes such as the halving of operations at St Louis by American Airlines following its 2001 takeover of TWA. While other carriers have contracted for maintenance, the case of the highly unionised US Airways may re-energise the debate about most types of airline outsourcing, argues DePaul University professor Joe Schwieterman, a transport labour expert.
US Airways said it might trim its 400 daily flights at the Pennsylvania city starting in January, although it has agreed to keep its Pittsburgh schedule until September 2004. Most analysts say the airline, saddled with three hubs in the East, will have to trim back to two, and Pittsburgh is seen as more likely for the chop than the Philadelphia or Charlotte operations.
The maintenance contract, with ST Mobile Aerospace Engineering, an Alabama-based unit of Singapore Technologies Aerospace, covers the first 10 of its 112 Airbus A320s facing heavy checks. US Airways maintenance executive John Prestifilippo says no in-house facility is suitable. But International Association of Machinists aviation vice-president Robert Roach, comparing the move to 'the destructive actions taken by Frank Lorenzo' in the 1980s, says that the work is contractually bound to be done in-house. The issue, the union has decided, is too important to be left to arbitration, which US Airways offered, and the union has gone to the federal court to block the move.
Source: Airline Business
