Yesterday US Airways chief executive officer Dave Siegel met with US Airways ALPA MEC chairman Bill Pollock, MEC vice chairman Kim Snider, and MEC Secretary/Treasurer Mike D’Angelo.
Siegel updated the MEC officers on the state of the airline, LCC expansion plans, and that US Airways would formally disclose its plans to counter the growing low cost threat in about a month.
The meeting was described as cordial, there were no “shots fired across the bow†or demands for labor concessions. Siegel said that the LCCs are growing much faster than had been expected and the company’s only method of survival would be to counter them in some way. Siegel noted that US Airways will not become a low cost carrier, but would look for ways to counter them using the airlines strengths and service advantages.
In my opinion, the plan could include a rolling hub designed to improve operational performance and productivity. For example, in Philadelphia instead of having two 90 flight banks flown within two hours, there could be three 60 flight banks flown in 3 hours. Each sequence would have 180 flights, but the rolling hub would be smoothed out to reduce delays and operational expense; as well as increasing employee productivity to reduce labor expense.
In addition, I believe we could see the plan include items such as increased cooperation and coordination with United Airlines as the companies continue to consolidate facilities, operations, and marketing programs. For example, it would not surprise me if the business partners implement plans like their new ServiceAir cargo handling contract in areas such as joint purchasing to obtain volume discounts, joint advertising, and joint aircraft ground handling, which also would improve employee productivity.
Also noteworthy, US Airways and United have a unique advantage over other network carriers in that each airline can still reject leases through the bankruptcy process to eliminate excess facilities to create economies of scale, which is a compelling point to lower joint unit costs going forward.
Regards,
Chip
Siegel updated the MEC officers on the state of the airline, LCC expansion plans, and that US Airways would formally disclose its plans to counter the growing low cost threat in about a month.
The meeting was described as cordial, there were no “shots fired across the bow†or demands for labor concessions. Siegel said that the LCCs are growing much faster than had been expected and the company’s only method of survival would be to counter them in some way. Siegel noted that US Airways will not become a low cost carrier, but would look for ways to counter them using the airlines strengths and service advantages.
In my opinion, the plan could include a rolling hub designed to improve operational performance and productivity. For example, in Philadelphia instead of having two 90 flight banks flown within two hours, there could be three 60 flight banks flown in 3 hours. Each sequence would have 180 flights, but the rolling hub would be smoothed out to reduce delays and operational expense; as well as increasing employee productivity to reduce labor expense.
In addition, I believe we could see the plan include items such as increased cooperation and coordination with United Airlines as the companies continue to consolidate facilities, operations, and marketing programs. For example, it would not surprise me if the business partners implement plans like their new ServiceAir cargo handling contract in areas such as joint purchasing to obtain volume discounts, joint advertising, and joint aircraft ground handling, which also would improve employee productivity.
Also noteworthy, US Airways and United have a unique advantage over other network carriers in that each airline can still reject leases through the bankruptcy process to eliminate excess facilities to create economies of scale, which is a compelling point to lower joint unit costs going forward.
Regards,
Chip
