March 20, 2007

US Airways CEO likes the bold approach

Calculated business risks have made US Airways among the nation's most profitable, and its recent failure to acquire Atlanta-based Delta Air Lines won't make it gun-shy, CEO Douglas Parker said last week.

Speaking to journalists at the airline's annual media day, Parker said US Airways has been willing to take on ventures that "other companies are reluctant to try because they'd get embarrassed doing high-profile things like this and not having them go their way." His airline's propensity to take business risks that make sense has helped transform the once beleaguered US Airways into one of the strongest domestic carriers. As CEO of the old America West, Parker in 2005 led the acquisition of US Airways out of its Chapter 11 bankruptcy.

For now, with momentum for industry consolidation fading, Parker says US Airways will focus on completing its merger with America West. But if industry merger talk heats up, Parker says, US Airways could be just as aggressive then as it was with its failed Delta bid. "If something happens, we're going to be involved."

Newer jets

US Airways passengers soon may find themselves flying on newer jets. And on fewer 50-seat regional jets.

Bloomberg News writes that the airline is "restarting a push to retire its oldest jets" and "will order 60 aircraft valued at almost $5 billion by the end of April. ... US Airways also will decide by April 30 on the future of a pending 2005 order for 20 Airbus A350 wide-body jets." US Airways officials made the announcement at the company's media day last Wednesday, adding that the company has resumed its focus on renewing its fleet now that the Delta takeover bid is over. That bid, if successful, would have altered the combined carrier's fleet demands, US Airways officials said.

For narrow-body jets, US Airways says the decision will come down to Boeing's 737 line or Airbus' A320 family of aircraft. "The airline hopes to replace 55 737-300s with the new planes between 2008 and 2010. Because they are replacing older jets, the airline does not plan to boost capacity," Bloomberg writes, citing US Airways CFO Derek Kerr. For wide-body jets, US Airways is looking at Boeing 787s or the Airbus A350.

Boeing's 787 is in demand

Boeing had a banner day two weeks ago, racking up a whopping $4.5 billion in commercial plane orders. The U.S. aircraft manufacturer hit that total after "Continental Airlines upped an existing order and operators from Russia and Kuwait agreed to buy more planes," CNN/Reuters reports. In particular, Boeing has been boosted by the sales of its new fuel-efficient 787 Dreamliner model, which is expected to enter commercial service in 2008. Boeing confirmed 11 new 787 orders, according to the Associated Press, which adds that "the deals widened [Boeing's] lead over European rival Airbus, whose competing A350 wide-body is five years behind the 787 in development."

Analyst Richard Aboulafia of the Teal Group tells Associated Press that the soaring orders for Boeing's 787 establish that model as "the most successful wide-body launch in the history of the industry." So far, Boeing has received 475 orders for the 787.

By Ben Mutzabaugh

No comments: