Airline, pilot talks don't break much new ground
Thursday, January 29, 2004
By Dan Fitzpatrick, Pittsburgh Post-Gazette
Informal talks between the pilots union and management at US Airways began yesterday in Arlington, Va., but the pilots left the meeting knowing little about the company's long-awaited 2004 restructuring plan.
In fact, the company did not bring up several topics that have been discussed informally in recent weeks, such as more efficient changes to the pilots' work rules or talk of adding 60 new Airbus jets to the company's mainline fleet in exchange for productivity improvements.
What the company did talk about was its plan to buy new regional jets, and how that plan is being held up by a dispute with the pilots over pay and US Airways' junk bond rating. It also provided the pilots with requested financial data and discussed challenges it faces this year as it tries to meet the milestones imposed by $900 million in government-backed loans.
Both sides are meeting again today, and the pilots will bring what was said back to its 12-member governing body Monday and ask it what to do next.
The airline declined to talk about what was said in the meeting yesterday with the pilots' negotiating committee, but US Airways spokesman David Castelveter characterized the meeting as "a productive session" and said, "Nobody left here disappointed."
He added that the two sides would continue to talk the next several weeks with the understanding of the need "to quickly resolve a number of issues."
Last week, the pilots' governing board challenged US Airways to discuss its 2004 business plan and disclose vital financial information, and the company promised full cooperation. On Friday, Chief Executive Officer David Siegel said that the airline looked "forward to beginning discussions with the union on strategic initiatives that will ensure US Airways' viability."
Even as the pilots searched for meaning from yesterday's session, the Arlington, Va.-based carrier continued to contemplate a sale of assets to resolve its nagging financial issues.
New York investment bank Morgan Stanley, hired to review the company's assets and contact potential bidders, reportedly has been in touch with a number of the industry's major carriers. Industry analysts say an array of airlines are probably interested, including American Airlines, Delta Air Lines and JetBlue Airways. Here's what may interest each:
American Airlines. The Forth Worth, Texas-based carrier bid $300 million for US Airways' coveted Washington-Boston-New York shuttle in 1997 and analysts believe it may want it again at a cheaper price or at least the shuttle's gates and slots in Washington, D.C., and New York.
Delta. The chief executive officer of the Atlanta-based carrier admitted last week that his company has seen a proposal from Morgan Stanley and that there may be some interest from his company. There is a lot of overlap between the two carriers on the East Coast. It announced plans yesterday to expand its presence in New York, promising $300 million in facility improvements at John F. Kennedy International Airport.
JetBlue Airways. The low-cost upstart has applied recently for 10 slots at New York's LaGuardia Airport, a US Airways stronghold, and may want more. A spokesman would not talk about US Airways yesterday, calling JetBlue's interest "rumor and speculation."
Virgin Atlantic Airways. British entrepreneur Richard Branson, who owns Virgin, is trying to launch a low-fare airline in the United States this year and has talked with an undisclosed airline about "carving off chunks of that operation."
Mesa Air Group: The Phoenix carrier, run by a friend of Siegel's, has said it was interested in US Airways assets, including the US Airways Express commuter operations, of which Mesa already is a code-sharing partner, as well as the shuttle.
AirTran Holdings. The Atlanta-based carrier has made its bets on larger U.S. airports and thus it may have an interest in gates at New York or Washington, D.C. It tried to make a go in Pittsburgh a few years back, but that didn't work.
A US Airways spokesman emphasized yesterday that while Morgan Stanley had been hired to "begin the exploratory process of determining where the assets of the company are and what value those assets potentially have," US Airways has not made the decision to sell anything.
But local airline analyst Bill Lauer said some people, including the company's union leaders, may not be taking the asset sale talk seriously.
"It is a far less pleasant sort of eventuality to contemplate," he said.
"It is much easier and more convenient and more pleasant for those people dependent upon US Airways to look at it as no more than labor-management business as usual. I am warning you that it may not be."
