US Airways plan includes cutbacks, focus on hubs

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US Airways plan includes cutbacks, focus on hubs

Unread post by bimjim » Wed Nov 04, 2009 ... 05772.aspx

US Airways profitability plan include cutbacks, focus on hubs
By: Michael Fabey
November 03, 2009

For weeks, US Airways CEO Doug Parker has been harping on the airline’s need to switch gears from survival mode to a profitable mindset.

Now the airline is on course to do just that, says Parker, by shedding money-losing routes and focusing on its core network.

The airline detailed plans last week to realign its operations, cutting some services to focus on key hubs of Charlotte, Philadelphia and Phoenix while pumping up its presence at Washington Reagan National.

At Washington Reagan, the carrier will soon operate nearly 230 daily flights to more than 60 destinations, as result of a recently negotiated slot swap with Delta.

The cutbacks include a 40% flight reduction at Las Vegas and the suspension of service to London and four other European destinations from Philadelphia, where it will also relinquish a recent Beijing route awarded by the DOT.

Airline executives say they can no longer afford to keep current schedules for money-draining domestic routes such as Las Vegas or soft secondary transatlantic destinations such as Stockholm.

"They are eliminating nonprofitable flying," said analyst Darryl Jenkins, founder of the Airline Zone, an aviation industry economic website. "I applaud this decision. Las Vegas only makes sense for them during cheap fuel days."

And those days, say Jenkins and US Airways executives, are long gone.

In their conference call with investor analysts last month, US Airways executives cited the increasing and still-volatile price of fuel as a reason for their somewhat muted optimism for an industry turnaround through the rest of this year into 2010.

Still, US Airways says that the worst is behind it. Now is the time for a transition, Parker said.

"We have to get this industry back to profitability. The standard can’t just be survival. We passed that standard, but there is a higher standard out there."

As part of its restructuring, US Airways will reduce its staffing by approximately 1,000 positions across its system during the first half of 2010.

These reductions include approximately 600 airport passenger and ramp service workers, approximately 200 pilots and approximately 150 flight attendants.

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