This article from NYTimes.com has been sent to you by psa188@juno.com. Uncertainty Among US Airways Customers August 13, 2002 By DONNA ROSATO Uncertainty about what US Airways will look like when it emerges from bankruptcy protection left corporate travel managers and business travelers anxious yesterday about making flight plans and using frequent-flier miles. But there was no sign of a rush away from bookings on the airline. "Our people aren't calling and canceling reservations on US Airways," said Peter Buchheit, director of travel and meeting services at Black & Decker, which is based near Baltimore, the seventh-biggest airport for US Airways, with 55 departures a day. "But it's a little dicey for the long term." Black & Decker's dealings with US Airways reflect the challenges facing the carrier, which filed for Chapter 11 bankruptcy protection on Sunday. The tool manufacturer has cut its employees' flights on US Airways by 44 percent over the last year. In part, that is because US Airways has reduced flights from Baltimore, but Black & Decker has also greatly increased its use of low-fare carriers, including Southwest Airlines and AirTran. "US Airways has considerable hurdles to overcome in terms of labor costs, and they have a lot of competition from low-cost carriers," Mr. Buchheit said. "We work very closely with US Airways and we'll continue to be supportive of them, but we'll have to wait and see." Among the issues that travel managers are watching is how US Airways plans to reshape itself in the bankruptcy process. "If you're a company and you're thinking of using US Airways for a meeting next May, you're going to be leery about booking with them, because you don't know what kind of route structure or frequency they're going to have then," said Kevin Mitchell, president of the Business Travel Coalition, an advocacy group for buyers of business travel services. Airline industry analysts expect US Airways to shrink its hubs in Charlotte, N.C., and Pittsburgh, reducing both the number of destinations and frequency of flights from those cities. The airline is also expected to shift more flying away from its big jets to more cost-efficient regional jets. US Airways declined yesterday to comment on details of its restructuring plans. " Certainly, a carrier that is reorganizing under Chapter 11 becomes a smaller carrier, and we expect that we will have to shrink the airline somewhat," said David Castelveter, a US Airways spokesman. Still, some experts said that US Airways might be able to expand service over all through the code-sharing agreement with United Airlines that it recently announced. The agreement - which could be blocked by the federal Department of Transportation if it were judged anticompetitive - would allow the two carriers to sell each others' flights as if they were their own. "US Airways itself will get smaller, but it will be able to offer more service through United," said Morris Garfinkle, chief executive of GCW, an airline industry consulting firm in Arlington, Va. He added that he expected the government to approve the code-sharing agreement. Travelers can also take comfort from the partnership that US Airways has struck with the Texas Pacific Group to help it in its restructuring, Mr. Garfinkle said. The equity group, led by David Bonderman, has agreed to invest $200 million in US Airways once it emerges from Chapter 11, in exchange for a 38 percent stake in the carrier and seats on the board of the restructured airline. "If Mr. Bonderman has his nose under the tent, this will be a tent that's around for a long time," Mr. Garfinkle said. He noted Mr. Bonderman's strong track record investing in other troubled airlines, including Continental Airlines, which he helped lead out of Chapter 11 bankruptcy protection in 1993. US Airways took pains to assure travelers that there would be no immediate changes in its operations and that its frequent-flier program would be unaffected by the bankruptcy filing. But not everyone was comforted. "As soon as I heard about the bankruptcy filing, I thought I better start using my frequent-flier miles," said Margaret Bowles, a member of the most elite level of the airline's frequent-flier program. Ms. Bowles, a commercial real estate lawyer who lives in Boston and flies US Airways once a week to Tampa, Fla., has more than 800,000 US Airways Dividend Miles points. "I may have to donate some to charity," she said. Other frequent fliers said they would hesitate to book with US Airways. "I'd be more skeptical of flying them for fear of getting stranded somewhere or just them canceling flights," said Gina Maddox, a communications coach and speaker who lives in Pensacola, Fla., and flies around the United States two and a half weeks out of every month. Generally, though, concern about the airline's future was muted. "Right now, this is a nonevent for the traveling public," said Hal Rosenbluth, chief executive of Rosenbluth International, one of the biggest corporate travel management companies, with more than 1,500 corporate clients. Mr. Rosenbluth said that his company fielded some calls from clients yesterday seeking information about US Airways but that there few cancellations or requests to be rerouted. "Our clients recognize that the dust hasn't settled yet," he said. "They want to know what the new airline will look like" when it emerges from Chapter 11. http://www.nytimes.com/2002/08/13/business/media/13FLY.html?ex=1030244585&ei=1&en=50c97431a713b3e4 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company