Analysts Cast Doubt On Us Airways' Value

[700UW]

Analysts Cast Doubt On US Airways' Value
Even Prized Shuttle Route a Fading Asset

By Sara Kehaulani Goo
Washington Post Staff Writer
Tuesday, September 14, 2004; Page E02

US Airways prides itself on serving the East Coast, operating a prized shuttle service among Washington, New York and Boston and offering low-fare flights to warm-weather destinations in Florida and the Caribbean.

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[WorldTraveler]

The value of the Shuttle is its ability to generate very high brand awareness. Flights are full and profitable only during the peak morning and evening hours with a number of off-peak and unprofitable hours in the middle of the day. Fares are heavily discounted during off-peak hours in order to create the traffic to keep the slots in use.
The days of having an airline shuttle between cities 200 miles apart have probably past. Even WN is cutting its basic intra-Texas flights of similar length and there is no train service between those cities. I wouldn’t be surprised if DL is coming to the same conclusion and will rework its Shuttle in the near future as well.
It might be a little premature to write off CLT, too. Although AA could resurrect RDU as a hub, CLT is really the only other hub in the SE besides ATL. IAD captures many of the same traffic flows that go over CLT and is clearly a larger local market but CLT has value as a hub – just to the right carrier at the right size. CVG is a good example of a similarly sized city that has been made to work as a powerful hub. Many of the domestic destinations are served by RJs but there are widebodies in some domestic markets and DL’s hub there has multiple international flights. PIT however, is just one hub among dozens in the Midwest and may never regain hub status again. PHL is attractive as a local market but will be constrained by runway capacity, a problem that will only grow as WN increases its presence while US (or its successor) tries to continue to operate a hub there.
Let’s now throw in the towel on US or the cities it serves.