USAIR PLANS TO retreat from low-cost point-to-point competition and re-focus operations around its major hubs. The re-organisation will result in a 5% cut in capacity across the carrier's route system.
The beleaguered airline, which is still trying to win labour concessions from union workers, will retrench around hubs at Pittsburgh, Charlotte, Philadelphia and Baltimore. By July, point-to-point flights will be cut, from 17%, to only 9% of the total USAir system. Around 240 flights are being cancelled, although another 70 will be added to the hub cities.
USAir's traditional hubs at Philadelphia and Pittsburgh have come under attack from new entrant Nations Air, while fares from Baltimore-Washington International have already been forced down by low-cost competition from Southwest Airlines.
Chairman Seth Schofield says that "the path to profitability" is to scale down the size of the airline, with fewer aircraft and workers. "The first step of matching capacity and demand is to cut 240 flights by July," he says. He estimates that the re-organisation will bring financial benefits which will be "in excess of $100 million" a year.
The changes will focus on markets where passenger loads have been poor. USAir Shuttle regional carriers, operating smaller, turboprop, aircraft, will replace the jet service, which is now provided.
USAir, which posted losses of $685 million for 1994, has already announced the deferral of eight Boeing 757 deliveries due in 1996 and has sold 11 Boeing 737-300s to General Electric Capital.
The carrier says that it also seeks to fly Boeing 767s between Boston and Paris, beginning in mid-June, replacing Northwest on that route. On 2 April, USAir will begin serving Toronto from Pittsburgh, under the terms of the new USA-Canada air-services pact. It also seeks to link Washington with Toronto, as soon as Air Canada is ready to fly the route.
Source: Flight International
