http://seattlepi.nwsource.com/business/183826_usairways28.html =20 US Airways plans a major overhaul of the way it flies, concentrating on direct flights to and from major airports on the East Coast and dismantling its hub in Pittsburgh, executives said yesterday. It will also wade into the highly competitive New York-to-Florida market, they said. Those moves, which are meant to defend US Airways' share of traffic in its most valuable markets, will take effect in the autumn. But the airline warned that the plan, and the company's solvency, depended on cutting $800 million a year from employee wages and benefits. It is pushing its unions to accept the cuts before Sept. 30. Otherwise, according to Chief Executive Bruce Lakefield, the airline may be unable to fulfill obligations to its aircraft lenders, would run the risk of defaulting on its federally guaranteed loans and would be in danger of falling back into Chapter 11 bankruptcy. The transformation plan "can only happen if we confront the difficult issues and make the difficult choices," Lakefield said in a recorded message to employees. "We don't want others making those choices for us." Yesterday, US Airways reported a $34 million profit for the second quarter. The airline, which had the highest operating costs, mile for mile, among major airlines in 2003, said it had brought them down closer to those of its peers. It earned $13 million in the quarter last year. While any black ink at all is generally heartening news for the airline industry, Lakefield said US Airways' latest performance was not good enough. The second quarter of the year is normally its best, and the airline depends on it to get through the rest of the year. "These results should not fool anyone into thinking that our problems are behind us," Lakefield said. "Unfortunately, our greatest problems lie ahead." In September, US Airways must comply with financial covenants in its loan package from the Air Transportation Stabilization Board, the centerpiece of the $1 billion refinancing plan that allowed the airline to emerge from bankruptcy last year.=20 Aircraft financing deals with General Electric, Bombardier and Embraer are also due to expire then, according to David Davis, the airline's chief financial officer. If the airline has too little cash to comply with the terms of its loan guarantees, it will have to renegotiate the aircraft financing deals on less favorable terms, Davis said. Still, Lakefield looked beyond the immediate challenges to outline where he wants to take the airline, which he has led since David Siegel resigned as chief executive in April. The airline will shift away from the hub-and-spoke route system it has used for a decade, which blankets the eastern half of the country with flights meant to carry passengers to and from connections at its hub airports. Instead, Lakefield told analysts, the airline would emphasize direct flights to and from airports in Boston, New York, Washington and Philadelphia, its busiest destination, using aircraft freed up by the elimination of most connecting flights through Pittsburgh. =20