This Week’s Interesting News
Lawmaker: Pittsburgh’s days as airline hub ending
According to the July 5 Beaver County Times, the days of Pittsburgh International Airport being a mainline airline hub for US Airways are numbered, but it could still be a major regional jetport, U.S. Rep. Tim Murphy said Thursday. Murphy, R-18, Upper St. Clair Township, told members of the Pittsburgh Airport Area Chamber of Commerce that what he has seen during negotiations between state and national leaders with US Airways administrators has made it clear the airline no longer sees the Findlay Township airport as a mainline hub. However, Murphy said leaders are pushing for US Airways to at least maintain the airport as the regional jet hub for the Mid-Atlantic region. He said the airline would keep some mainline flights, including international flights. The proposed deal between US Airways and negotiators is to be presented to the public on July 18, Murphy said.
Summer of Turbulence for Airlines, no rebound in the air
According to the July 4 New York Times, the airlines' crucial summer season has arrived, but the industry's vital signs remain feeble. Airline executives acknowledge that travelers have failed to return in large numbers. Gary Kelly, chief financial officer of Southwest Airlines, the world's most profitable carrier, gave a lukewarm appraisal of summer bookings. We've got some heavy travel periods during the summer, which is what we expect, he said. It shouldn't suggest to you that things have dramatically improved. They have not. But they have not gotten worse.
Jim Corridore, an analyst at Standard & Poor's, said that both American and United still have an incredibly long way to go before they become healthy companies — a goal, he said, that requires them to sharply cut capacity and increase efficiency. That could also mean having to give up market share. Their road to profitability would be easier, Mr. Corridore said, if they said they did not have to stay No. 1 or 2 in the industry, the New York Times reported.
US Airways evaluating B737 replacement, airline expected to change EMB-170s to larger 175 model
Flight International reported last week that US Airways is looking at the stretched Embraer 190/195 regional jet to plug the seat capacity gap between its planned new MidAtlantic Airlines-operated fleet of smaller 170/175s and the bottom end of the mainline Airbus A320 fleet created by the retirement of its 100-seat Fokker 100s. The 190/195 is attractive to us and we’re contemplating an order, says David Siegel, US Airways president. An alternative, depending on market conditions, would be additional Airbus A319s or smaller A318s. A nearer-term airline board decision scheduled for the third quarter will be converting some of the current 85 170s on order to slightly larger 75-seat 175s. The expectation is that the 175 will make up around half of the order.
Mayday for United Airlines’ employee pensions?
The Rocky Mountain News reported on July 5 that United Airlines pension plans were underfunded by $6.3 billion at the end of 2002, the largest deficit in the beleaguered U.S. airline industry. Executives must draft a reorganization strategy that will generate enough cash flow to meet future obligations. If they can't find a recipe that works and that also attracts bankruptcy-exit financing, United might seek to terminate some of its pension trusts, analysts said. It's very much a possibility that United will follow in US Airways' path, said Ray Neidl, an analyst at Blaylock & Partners in New York. The pension deficit could be one of the obstacles to getting out of bankruptcy. The fate of United's pension plans will depend on two things: how revenues perform and what their (bankruptcy-exit) financiers are willing to do as far as pledging money to cover the pension underfunding, said Bob Mann, an industry consultant in Port Washington, N.Y. In general, people funding reorganization plans don't like to pay old bills.
Scottie Clark, a spokeswoman for United's pilots union, the Air Line Pilots Association warned terminating the pilot pension would cause a meltdown on this property.
United Airlines Update
As many of you know, I have recently commented on United Airlines in-court restructuring and its effect on US Airways. Specifically, I have written at length on the www.usaviation.com forum and the US Airways message board. I believe you will find the threads listed below interesting.
Is there discontent at US business partner UA?
Complete Story: http://www.usaviation.com/idealbb/view.asp...92-B0DCFBAA0455}
Is US' business partner UA stuck in a quagmire of mud?
Complete Story: http://www.usaviation.com/idealbb/view.asp...2-B0DCFBAA0455}
US business parter UA plans to return to basics, Business blueprint presented to creditors
Complete Story: http://www.usaviation.com/idealbb/view.asp...2-B0DCFBAA0455}
Meanwhile, it’s come to my attention UA chief executive officer Glenn Tilton is now echoing many of my thoughts on complexity and press to test issues I described in the threads listed above. For more information on Tilton’s comments interested parties can call UA’s code-a-phone at 800-393-6682 (800-EYE-ON-UA), then select prompt two. For those nay sayers my question is…how can this be?
Airlines' hopes riding on holiday weekend, Summer travel has been weak
On July 5 Knight Ridder News Service reported a much-anticipated rebound in air travel during the summer season has largely failed to materialize, making this July Fourth weekend even more crucial to the troubled airline industry's hopes for a turnaround.
Best regards,
Chip
17 PM Chip Munn wrote:
