US Airways emerges lean, mean, punctual machine

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US Airways emerges lean, mean, punctual machine
By Barbara De Lollis, USA TODAY

Don't expect splashy advertising, new frequent-flier promotions or other=20
big changes at US Airways now that it has emerged from bankruptcy court,=20
aviation experts say. Passengers who have flown the airline recently will=20
see little immediate change in the US Airways that came out of bankruptcy=20
reorganization Monday. While managers overhauled the balance sheet, flight=
=20
schedule, fleet and payroll the past seven months, US Airways' pilots,=20
flight attendants, ticket agents and baggage handlers got people where they=
=20
needed to go =97 often, faster and with fewer passenger  complaints. Some=20
months, the airline grabbed top honors in the government's customer service=
=20
rankings.

Industry experts expect that the airline will keep trimming costs to meet=20
its financial projections, which could affect passenger services. Even=20
after cutting costs by nearly $2 billion a year, US Airways is losing=20
money, and 2003 is shaping up to be worse than expected. Executives had=20
projected net income of $127 million for 2004, but now that looks=20
uncertain. War is driving down travel demand, the economy remains shaky,=20
and profitable low-cost carriers are cranking up the competition. "They're=
=20
coming out of bankruptcy in a very difficult time," says airline analyst=20
Ray Neidl at Blaylock & Partners. Neidl thinks US Airways should have=20
shaved more off its costs to better compete with discount airlines such as=
=20
Southwest and JetBlue. In a sign of what lies ahead, low-fare ATA on Monday=
=20
announced it will launch flights between Pittsburgh, a US Airways' hub, and=
=20
Chicago Midway in June. ATA says it will offer introductory round-trip=20
fares of $138 that don't have advance purchase or Saturday-night stay=20
requirements. Fares were much higher in years past, says Bob Thompson,=20
manager at Ambassador Travel in Pittsburgh.

Here's a look at what's ahead:
=95 Fares. Don't expect big fare sales in the near future, especially as=
 long=20
as the war lasts. "I think people have realized that that's what helped get=
=20
them where they are," says Terry Trippler, air traveler advocate for=20
cheapseats.com.
Though US Airways' goal isn't to be a low-fare carrier, it's behaving like=
=20
one in some of its top markets. In Pittsburgh, where US Airways is the=20
predominant carrier, it's matching AirTran's $188 round-trip fare on=20
non-stop flights to Orlando and America West's $241 round-trip fare on=20
non-stops to Phoenix. Industry analysts say US Airways' ability to raise=20
average fares is key to its long-term success.

=95 International flying. It added five airports in the Caribbean while in=
=20
Chapter 11, and in May, US Airways will start service to Shannon and=20
Dublin, Ireland. It's seeking permission to fly to Mexico City this fall. A=
=20
recent deal with United Airlines also gives US Airways customers connecting=
=20
flights across United's sprawling international route system and includes a=
=20
tie-in to United's MileagePlus frequent-flier program. US Airways continues=
=20
to make some changes to its routes but still serves 199 airports, five=20
fewer than it did before seeking bankruptcy protection. It will eliminate=20
US Airways Express service in Kalamazoo, Mich., Baton Rouge and Madison,=20
Wis., in coming weeks.

=95 Schedule changes. US Airways has been slashing its schedule since the=20
Sept. 11 attacks, and most of the changes are in place now. But war is=20
leading to another 4% cutback in April.

=95 Fleet. US Airways expects to double the number of 50- to 76-seat=
 regional=20
jets flown by its regional airlines to about 140 this year, although the=20
specific routes they will fly haven't been decided, an airline spokesman=20
says. That will be an improvement in some markets, where the small jets=20
will replace turboprops that are less popular with customers.

=95 Staffing levels. The airline reduced flight attendant staffing on some=
=20
flights to the minimum required by the Federal Aviation Administration.=20
Those requirements vary depending on the size of the plane, but flight=20
attendants have concerns about the implications for safety and service. On=
=20
a 757, for instance, the number of required flight attendants went from six=
=20
to four, says Jeff Zack, spokesman for the attendants' union. "Once you=20
start reducing service significantly on US Airways, whose bread-and-butter=
=20
is business passengers primarily to business markets, then you start to=20
lose your advantage over the no-frills carriers," he says.

=95 Attention to passenger service. Employee morale suffered the past two=20
years during multiple rounds of furloughs and pay cuts, but fewer flights=20
imposed by US Airways' restructuring actually led to improved performance=20
in on-time flights, fewer mishandled bags and fewer complaints. Emergence=20
should help improve morale, says Hal Rosenbluth, CEO of Rosenbluth=20
International travel management company. A noticeable drop in customer=20
service, Neidl says, could spell disaster for the airline.

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