US Airways Offered $263.9 Million To Stay
Thu Jun 12, 2:22 AM ET Add Local - WTAE ThePittsburghChannel.com to My Yahoo!
Pennsylvania''s top officials on Wednesday offered $263.9 million in airport investments over five years to persuade US Airways to keep its hub in Pittsburgh, a plan quickly deemed a good-faith effort by the airline''s chief.
But US Airways chief executive officer David Siegel said the offer was only the opening step in negotiations beginning Thursday, and bluntly said he could not promise to accept it.
Absolutely not, Siegel said when asked if he could immediately commit to remaining at Pittsburgh International Airport. What we''re committing to is a process to work very hard, and I would define success as finding a resolution where we can stay in Pittsburgh, where it works for U.S. Airways and works for Pennsylvania.
The goal is to stay, he added.
The offer was made during a 90-minute meeting in Washington between Siegel and top Pennsylvania officials, including Democratic Gov. Ed Rendell, Republican Sens. Arlen Specter and Rick Santorum, and 14 of the state''s 19 House members.
Action News has learned that the group also told Siegel that the state of Pennsylvania wants a seat on the board of directors of the airline -- in exchange for the millions of dollars the state will invest in the company.
US Airways, which emerged from bankruptcy in late March, has said it needs roughly $864 million worth of investments over the next five years to maintain current service levels in Pennsylvania.
WTAE''s Sheldon Ingram is in Washington. Watch his report on Action News and refresh this page Thursday morning for updates.
Rendell, who drew up the proposal, said that amount far exceeds what the public can invest. His plan - a mix of federal, state and local funding - would upgrade hub terminals, hangars and other facilities, and lower operating costs at both the Pittsburgh and Philadelphia airports. The airline''s third hub is located in Charlotte, N.C.
But the deal came with strings attached: If the airline ultimately shuts down its Pittsburgh hub, as it has threatened to do as part of its companywide restructuring plan, it will not receive any of the aid for Philadelphia facilities.
We are going to act as a team, Rendell said. If US Airways does not continue to hub at both airports, Philadelphia and Pittsburgh, then none of these benefits will be available to US Air.
Moreover, Rendell said, the investments at both airports will help all air carriers, not just US Airways exclusively. But he said the state is willing to sweeten the deal with more money if there''s more significant commitment by US Air.
The state is offering to invest up to $30 million to build a new mainline training facility for US Airways in Pittsburgh. But the company must commit to maintain it''s hub status in Pittsburgh.
Specter, who said he wore out the telephone lines since the terror attacks to help US Airways keep its head above the water, predicted the airline would maintain a viable Pittsburgh operation and described himself as optimistic after the meeting in his Washington office.
Other lawmakers also said they were happy with Siegel''s initial response to the offer, which was made after more than two months of tense rhetoric from both sides.
Negotiations begin Thursday and will be wrapped up by July 18.
Thu Jun 12, 2:22 AM ET Add Local - WTAE ThePittsburghChannel.com to My Yahoo!
Pennsylvania''s top officials on Wednesday offered $263.9 million in airport investments over five years to persuade US Airways to keep its hub in Pittsburgh, a plan quickly deemed a good-faith effort by the airline''s chief.
But US Airways chief executive officer David Siegel said the offer was only the opening step in negotiations beginning Thursday, and bluntly said he could not promise to accept it.
Absolutely not, Siegel said when asked if he could immediately commit to remaining at Pittsburgh International Airport. What we''re committing to is a process to work very hard, and I would define success as finding a resolution where we can stay in Pittsburgh, where it works for U.S. Airways and works for Pennsylvania.
The goal is to stay, he added.
The offer was made during a 90-minute meeting in Washington between Siegel and top Pennsylvania officials, including Democratic Gov. Ed Rendell, Republican Sens. Arlen Specter and Rick Santorum, and 14 of the state''s 19 House members.
Action News has learned that the group also told Siegel that the state of Pennsylvania wants a seat on the board of directors of the airline -- in exchange for the millions of dollars the state will invest in the company.
US Airways, which emerged from bankruptcy in late March, has said it needs roughly $864 million worth of investments over the next five years to maintain current service levels in Pennsylvania.
WTAE''s Sheldon Ingram is in Washington. Watch his report on Action News and refresh this page Thursday morning for updates.
Rendell, who drew up the proposal, said that amount far exceeds what the public can invest. His plan - a mix of federal, state and local funding - would upgrade hub terminals, hangars and other facilities, and lower operating costs at both the Pittsburgh and Philadelphia airports. The airline''s third hub is located in Charlotte, N.C.
But the deal came with strings attached: If the airline ultimately shuts down its Pittsburgh hub, as it has threatened to do as part of its companywide restructuring plan, it will not receive any of the aid for Philadelphia facilities.
We are going to act as a team, Rendell said. If US Airways does not continue to hub at both airports, Philadelphia and Pittsburgh, then none of these benefits will be available to US Air.
Moreover, Rendell said, the investments at both airports will help all air carriers, not just US Airways exclusively. But he said the state is willing to sweeten the deal with more money if there''s more significant commitment by US Air.
The state is offering to invest up to $30 million to build a new mainline training facility for US Airways in Pittsburgh. But the company must commit to maintain it''s hub status in Pittsburgh.
Specter, who said he wore out the telephone lines since the terror attacks to help US Airways keep its head above the water, predicted the airline would maintain a viable Pittsburgh operation and described himself as optimistic after the meeting in his Washington office.
Other lawmakers also said they were happy with Siegel''s initial response to the offer, which was made after more than two months of tense rhetoric from both sides.
Negotiations begin Thursday and will be wrapped up by July 18.
04 PM TheWatcher wrote: 
