With new labor agreements with its unions now in place, US Airways is now focusing on another key component of its transformation with its upcoming February schedule change. On February 6 schedule highlights include: increased aircraft utilization, two additional banks in Charlotte going from eight to ten, Philadelphia converting to a “rolling hubâ€, increase service from Washington National to six other airline (OA) hubs, increase aircraft size on numerous routes from key East Coast focus cities (Boston Logan, New York LaGuardia, and Washington National) with higher O&D traffic, and the launch of the new Latin American/Caribbean/Mexican service from its new Fort Lauderdale-Hollywood International gateway.
As US Airways continues to make progress in cutting costs designed to transform the carrier to a competitive and profitable business enterprise. The end-result is to be the first airline to convert the company to a LCC/network hybrid carrier, with a CASM less than Southwest Airlines and AirTran Airways that can obtain a RASM premium.
There are a number of initiatives underway to become a competitive business enterprise and three important points are the route network’s restructuring, aircraft rationalization, and some maintenance outsourcing.
The network is being restructured to focus on low cost domestic service, principally with large RJ aircraft such as the EMB-170 and CRJ-700 (it is expected the company will place orders for 97-seat EMB190 and 90-seat CRJ-900 aircraft) and more mainline point-to-point service. In addition, there will be more international long haul flying to Europe, the Caribbean, Latin America, and Mexico designed to average down units costs, while maintaining a relative revenue premium. The intent is to reduce unit costs with increased long-haul flying by keeping aircraft in the airline longer and to create a more refined focused turn process, much like Southwest, to increase aircraft utilization. The February schedule will see increased utilization to create 224 additional departures and 22 new routes. This is the equivalent of adding 25 aircraft to the network without writing a check, with mainline utilization increasing from 10.5 to 11.5 hours per aircraft per day.
The increased utilization will permit more point-to-point flying that supports expansion of Caribbean, Latin American, and Mexican flying from the company’s new international gateway at Fort Lauderdale- Hollywood International airport starting next week. New domestic service from the Southeast Florida gateway includes nine new domestic destinations including Boston, Hartford, Newark, Baltimore, Orlando (RJ), Key West (RJ), New York (LaGuardia), Providence, and San Juan. Fort Lauderdale will see new service to seven international markets with new service to Cancun, Guatemala City, San Salvador, San Jose, Panama City, Kingston, and Santo Domingo.
City Nov 04 Feb 05
Boston 108 110
Charlotte 512 567
Washington 186 190
Fort Lauderdale 27 44
New York 204 204
Philadelphia 461 493
Pittsburgh 229 239
System 3287 3456
Source: Company reports
US Airways will continue its European growth with two new flights added this spring from Philadelphia to Venice and Barcelona. This will increase the number of destinations from Philadelphia to Europe to 13 with service to London, Manchester, Frankfurt, Munich, Amsterdam, Paris, Madrid, Rome, Glasgow, Dublin, and Shannon. In addition, the company operates service from its Charlotte hub to London and Frankfurt and this summer will offer 15 daily European departures using 15 of its 19 widebody fleet.
Also noteworthy, according to thehub.com, complementing US Airways’ announcement of the launch of Philadelphia-Barcelona service this May, US Airways and Spanair were granted approval by the U.S. Department of Transportation (DOT) to expand their codeshare agreement. US Airways customers may travel to Malaga and Palma de Mallorca, Spain, through Spanair codeshare flights connecting in Barcelona. This will be in addition to existing codeshare connections via Madrid. In turn, Spanair will offer service between Barcelona and Madrid to Philadelphia, and to 21 U.S. destinations beyond, through their codeshare on the US Airways flights.
Meanwhile, according to the Charlotte Observer, Charlotte IAM members have been told that US Airways is closing many of its specialty maintenance shops, eliminating about 280 jobs, including 150 in Charlotte. Company spokesman David Castelveter confirmed that workers in the shops were told this week that their positions will be abolished by the end of March. The job cuts are allowed under a contract that employees with the International Association of Machinists ratified last week. The work will be sent to outside vendors, Castelveter said.
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The Beaver County Times reported, in addition to the mechanical shops to be closed in Pittsburgh including hydraulics, instrumentation, auxiliary power unit and electrical, those closing in Charlotte include wheel and brake, flight control, lavatory, oxygen, accessory, calibration and avionics shops. US Airways workers to be absorbed into the system, as other employees retire, accept an early-out package or move to other jobs. Mechanics have until March 1 to decide whether to accept the early buyout package.
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US Airways continues to negotiate with aircraft leaseholders in an attempt to lower costs. This effort is being lead by the Seabury Group with the intent to have the emergence fleet plan in place by February 15 when the company is scheduled to file its plan of reorganization. The table below indicates what the fleet plan may reflect:
Aircraft Type December 31, 2005 December 31, 2006 December 31, 2007
A330 9 9 9
B767 10 10 10
B757 30 30 30
A320 family 117 117 117
B737 105 97 90
EMB-170 (MDA) 28 28 28
CRJ-700 (PSA) 8 8 8
CRJ-200 (PSA) 37 37 37
Dash8 (Piedmont) 41 41 41
Total 385 374 367
(1) US Airways may add B737s, if they can be obtained at a reasonable price, to replace those being returned to GE. In addition, the company could lose more mainline aircraft and have a fleet less than 251 aircraft on December 31, 2007.
(2) MDA is expected to add more EMB-170/175/190 aircraft.
(3) PSA is expected to add more CRJ700/900 aircraft.
(4) US Airways has 29 Airbus aircraft on form order for deliveries in 2008 through 2010. The order includes 10 A330-200s, 16 A321s, and 6 A320s.
Source: Company reports
US Airways received bankruptcy court approval on January 27 for the final three union’s contracts, all of which were represented by the IAM. The pre-bankruptcy company annual concession “ask†and final concessions are listed below:
Union Pre-bankruptcy Concession % Increase
TWU $6 million $6 million 0
ALPA $295 million $300 million 2
CWA $122 million $137 million 12
AFA $116 million $157 million 38
IAM $263 million $373 million 45
Total $802 million $977 million NA
(1) US Airways management employees provided $200 million in concessions.
(2) ALPA International E&FA Lead Economist Amy Alperi values the pilot’s average annual concession over the term of the CBA at about $365 million per year.
(3) The AFA concession was for $94 million per year, which excluded $63 million in defined benefit plan termination and retiree health care changes, which were obtained by court order.
US Airways total post bankruptcy advertised labor savings are $1.17 billion, which is $175 million more than the company’s initial “askâ€. In addition, the “ask†percentage increase grew day-by-day. The table below lists the union new labor accord order and clearly indicates the earlier a union reached a deal, the lower the increase of the concession. The union that had the highest increase in their post bankruptcy concession was the IAM, with a whopping 45% increase in their concession and participation in the Transformation Plan.
US Airways is expected to announce 2004 and fourth quarter financial results on Monday, January 31. The company is expected to post a loss, which could be about $200 million for the quarter. In my opinion, the airline will make other announcements simultaneously with the earnings report to soften the blow and maintain customer confidence. For example, the company could announce who will be the airlines exit financing investor that could be RSA that then takes the company private.
Best regards,
USA320Pilot
As US Airways continues to make progress in cutting costs designed to transform the carrier to a competitive and profitable business enterprise. The end-result is to be the first airline to convert the company to a LCC/network hybrid carrier, with a CASM less than Southwest Airlines and AirTran Airways that can obtain a RASM premium.
There are a number of initiatives underway to become a competitive business enterprise and three important points are the route network’s restructuring, aircraft rationalization, and some maintenance outsourcing.
The network is being restructured to focus on low cost domestic service, principally with large RJ aircraft such as the EMB-170 and CRJ-700 (it is expected the company will place orders for 97-seat EMB190 and 90-seat CRJ-900 aircraft) and more mainline point-to-point service. In addition, there will be more international long haul flying to Europe, the Caribbean, Latin America, and Mexico designed to average down units costs, while maintaining a relative revenue premium. The intent is to reduce unit costs with increased long-haul flying by keeping aircraft in the airline longer and to create a more refined focused turn process, much like Southwest, to increase aircraft utilization. The February schedule will see increased utilization to create 224 additional departures and 22 new routes. This is the equivalent of adding 25 aircraft to the network without writing a check, with mainline utilization increasing from 10.5 to 11.5 hours per aircraft per day.
The increased utilization will permit more point-to-point flying that supports expansion of Caribbean, Latin American, and Mexican flying from the company’s new international gateway at Fort Lauderdale- Hollywood International airport starting next week. New domestic service from the Southeast Florida gateway includes nine new domestic destinations including Boston, Hartford, Newark, Baltimore, Orlando (RJ), Key West (RJ), New York (LaGuardia), Providence, and San Juan. Fort Lauderdale will see new service to seven international markets with new service to Cancun, Guatemala City, San Salvador, San Jose, Panama City, Kingston, and Santo Domingo.
City Nov 04 Feb 05
Boston 108 110
Charlotte 512 567
Washington 186 190
Fort Lauderdale 27 44
New York 204 204
Philadelphia 461 493
Pittsburgh 229 239
System 3287 3456
Source: Company reports
US Airways will continue its European growth with two new flights added this spring from Philadelphia to Venice and Barcelona. This will increase the number of destinations from Philadelphia to Europe to 13 with service to London, Manchester, Frankfurt, Munich, Amsterdam, Paris, Madrid, Rome, Glasgow, Dublin, and Shannon. In addition, the company operates service from its Charlotte hub to London and Frankfurt and this summer will offer 15 daily European departures using 15 of its 19 widebody fleet.
Also noteworthy, according to thehub.com, complementing US Airways’ announcement of the launch of Philadelphia-Barcelona service this May, US Airways and Spanair were granted approval by the U.S. Department of Transportation (DOT) to expand their codeshare agreement. US Airways customers may travel to Malaga and Palma de Mallorca, Spain, through Spanair codeshare flights connecting in Barcelona. This will be in addition to existing codeshare connections via Madrid. In turn, Spanair will offer service between Barcelona and Madrid to Philadelphia, and to 21 U.S. destinations beyond, through their codeshare on the US Airways flights.
Meanwhile, according to the Charlotte Observer, Charlotte IAM members have been told that US Airways is closing many of its specialty maintenance shops, eliminating about 280 jobs, including 150 in Charlotte. Company spokesman David Castelveter confirmed that workers in the shops were told this week that their positions will be abolished by the end of March. The job cuts are allowed under a contract that employees with the International Association of Machinists ratified last week. The work will be sent to outside vendors, Castelveter said.
See Story
The Beaver County Times reported, in addition to the mechanical shops to be closed in Pittsburgh including hydraulics, instrumentation, auxiliary power unit and electrical, those closing in Charlotte include wheel and brake, flight control, lavatory, oxygen, accessory, calibration and avionics shops. US Airways workers to be absorbed into the system, as other employees retire, accept an early-out package or move to other jobs. Mechanics have until March 1 to decide whether to accept the early buyout package.
See Story
US Airways continues to negotiate with aircraft leaseholders in an attempt to lower costs. This effort is being lead by the Seabury Group with the intent to have the emergence fleet plan in place by February 15 when the company is scheduled to file its plan of reorganization. The table below indicates what the fleet plan may reflect:
Aircraft Type December 31, 2005 December 31, 2006 December 31, 2007
A330 9 9 9
B767 10 10 10
B757 30 30 30
A320 family 117 117 117
B737 105 97 90
EMB-170 (MDA) 28 28 28
CRJ-700 (PSA) 8 8 8
CRJ-200 (PSA) 37 37 37
Dash8 (Piedmont) 41 41 41
Total 385 374 367
(1) US Airways may add B737s, if they can be obtained at a reasonable price, to replace those being returned to GE. In addition, the company could lose more mainline aircraft and have a fleet less than 251 aircraft on December 31, 2007.
(2) MDA is expected to add more EMB-170/175/190 aircraft.
(3) PSA is expected to add more CRJ700/900 aircraft.
(4) US Airways has 29 Airbus aircraft on form order for deliveries in 2008 through 2010. The order includes 10 A330-200s, 16 A321s, and 6 A320s.
Source: Company reports
US Airways received bankruptcy court approval on January 27 for the final three union’s contracts, all of which were represented by the IAM. The pre-bankruptcy company annual concession “ask†and final concessions are listed below:
Union Pre-bankruptcy Concession % Increase
TWU $6 million $6 million 0
ALPA $295 million $300 million 2
CWA $122 million $137 million 12
AFA $116 million $157 million 38
IAM $263 million $373 million 45
Total $802 million $977 million NA
(1) US Airways management employees provided $200 million in concessions.
(2) ALPA International E&FA Lead Economist Amy Alperi values the pilot’s average annual concession over the term of the CBA at about $365 million per year.
(3) The AFA concession was for $94 million per year, which excluded $63 million in defined benefit plan termination and retiree health care changes, which were obtained by court order.
US Airways total post bankruptcy advertised labor savings are $1.17 billion, which is $175 million more than the company’s initial “askâ€. In addition, the “ask†percentage increase grew day-by-day. The table below lists the union new labor accord order and clearly indicates the earlier a union reached a deal, the lower the increase of the concession. The union that had the highest increase in their post bankruptcy concession was the IAM, with a whopping 45% increase in their concession and participation in the Transformation Plan.
US Airways is expected to announce 2004 and fourth quarter financial results on Monday, January 31. The company is expected to post a loss, which could be about $200 million for the quarter. In my opinion, the airline will make other announcements simultaneously with the earnings report to soften the blow and maintain customer confidence. For example, the company could announce who will be the airlines exit financing investor that could be RSA that then takes the company private.
Best regards,
USA320Pilot
He points out that CCY has done nothing but go after wages, despite it being clear that wages aren't enough. It's a fact. No, wait...it's an assertion. Is it wrong? If so, show us the evidence!
