This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ IN AMERICA - NOMINATED FOR 6 INDEPENDENT SPIRIT AWARDS IN AMERICA has audiences across the country moved by its emotional power. This Holiday season, share the experience of this extraordinary film with everyone you are thankful to have in your life. Ebert & Roeper give IN AMERICA "Two Thumbs Way Up!" Watch the trailer at: http://www.foxsearchlight.com/inamerica \----------------------------------------------------------/ US Airways’ Stock Hurt By Southwest’s Route Plans December 12, 2003 By MICHELINE MAYNARD Shares of US Airways fell yesterday, as Southwest Airlines, the largest low-cost carrier, said it would serve six cities from Philadelphia, one of US Airways' hubs. Southwest's announcement came a day after Standard & Poor's put US Airways' debt on its CreditWatch list, meaning that the debt was at risk of downgrading. US Airways shares declined 9 cents, closing at $5.61, after trading sharply lower in the morning. US Airways, based in Arlington, Va., is the nation's seventh-largest carrier. It emerged from bankruptcy protection in the spring, after its Chapter 11 filing in August 2002. But last week, US Airways' chief executive, David N. Siegel, said the company was re-examining every part of its business, in the wake of the threat posed by Southwest and other discount carriers. In a message to employees last Friday, Mr. Siegel said studies showed that fares fell 30 percent after Southwest entered a metropolitan area. But he said US Airways was prepared to match Southwest's Philadelphia fares. "We're going to be fully competitive to meet the customers' needs," Mr. Siegel said in Tokyo, where he was attending a meeting of the Star Alliance, a collection of more than a dozen global airlines that US Airways recently joined. "We're no different than retailers who have to deal with Wal-Mart," Mr. Siegel said. Leaders of US Airways' pilots' union met yesterday in Charlotte, N.C., to discuss the new crisis facing the airline, but issued no comment. Two other unions, representing passenger service agents and mechanics, have said that they will not reopen their contracts, though they have held discussions with company officials. Since the company's filing for bankruptcy, its unions have granted the airline two sets of concessions, and the pilots' pension plan was replaced by a less generous program. In an interview in Tokyo last week, Mr. Siegel played down the unions' refusal to negotiate further cuts, terming this "common rhetoric." He added, "We've had some good private talks." Southwest plans to begin service in May from Philadelphia, one of US Airways' main hubs along with Pittsburgh and Charlotte. In recent months, US Airways has made Philadelphia its primary hub for flights to Europe and the Caribbean, as well as a transfer point for flights up and down the East Coast. Yesterday, Southwest said it would start service from Philadelphia to Chicago (Midway); Phoenix; Las Vegas; Tampa, Fla.; Orlando, Fla.; and Providence, R.I. - all cities served by US Airways. Analysts said US Air was most likely to be affected by Southwest's competition on its routes to Las Vegas, where it has four flights a day, and Midway Airport, Chicago, where it offers nine flights a day. Midway is also a hub for Southwest, where it funnels flights to and from Eastern, Western and Southern destinations. Joyce Rogge, Southwest's senior vice president for marketing, said the airline would announce its Philadelphia fares later. But in a news release, Southwest noted that its one-way fares are capped at $299 and often run far less. "Announcing our entry into Philadelphia was just the appetizer,'' it said in part, "and the destinations are the entree. Just wait until you see our fares - you'll want to save room for dessert." Commenting on the placing of US Airways on CreditWatch, a Standard & Poor's analyst, Philip Baggaley, said he was concerned that the airline was not performing at the levels it forecast when it emerged from bankruptcy protection. S.& P. has a B rating on US Airways' long-term debt. Mr. Baggaley noted that US Airways must meet loan covenants on June 30 to comply with the conditions attached to $900 million in federal loan guarantees granted by the Air Transportation Stabilization Board. Though other analysts are questioning US Airways' long-term prospects, Mr. Baggaley said he expected the airline to be able to address its cost problems. "It's not likely the A.T.S.B. would accelerate the loan and demand payment," he said. http://www.nytimes.com/2003/12/12/business/12air.html?ex=1072238093&ei=1&en=6ff37557c307fd23 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! Click here: http://www.nytimes.com/ads/nytcirc/index.html 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@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company