May 18, 2007

US Airways' Parker:

US Airways chief executive Doug Parker told local business leaders Thursday morning that its Charlotte hub is high-performing, but the local market isn't big enough for more international flights.

US Airways currently has two nonstop flights from Charlotte to Europe, in addition to a number of flights to Central America and the Caribbean. Parker said the European flights -- to London and Frankfurt, Germany -- are "doing OK. Not great, but OK."

The Tempe, Ariz.-based airline is planning in the next several years to expand its international flying, where there is less competition from low-cost airlines. Much of that expansion is slated for Philadelphia, which is the airline's largest hub in terms of the number of seats offered. Charlotte is the largest by daily flights.

"We think the hub (Charlotte) is the right size," Parker said about Charlotte during a speech at the Charlotte Convention Center, sponsored by the Charlotte Business Journal.

Parker's comments came as US Airways confirmed this week it is cutting more service from Pittsburgh, which was once a key hub. As of July, the airline is cutting nonstop flights from Pittsburgh to Baltimore, Seattle, San Diego, Buffalo, N.Y., and Altoona, Pa. In addition, it's also scaling back service to 10 other cities.

Pittsburgh once had more than 500 daily flights. It will now be down to 131.

There are no cuts planned in Charlotte.

Parker's speech talked about US Airways' highly successful 2006, in which it enjoyed efficiencies created by the merger with America West to become one of the most profitable U.S. airlines. He also discussed what's been a poor 2007, as a reservations system switchover was botched and the airline's on-time performance has plummeted. The airline's stock has sagged from a 12-month high of $63.27 during the attempted takeover of Delta Air Lines to $33.27 at the close of trading Thursday.

But the airline's biggest problem is labor unrest.

Pilots from the old US Airways -- referred to internally as the "East" part of the system -- are furious over a new seniority list created by an arbitrator that merges lists from the old US Airways and America West. They say the new list favors the West pilots, and they have appealed the decision to the Air Line Pilots Association's executive council, which is expected to consider their complaints Monday.

East pilots wanted a list based on date of hire because they are, on average, older and more experienced than West pilots. The list instead blended the seniority status of pilots at the two airlines, pushing some veteran East pilots below West pilots with less experience.

Seniority is crucial to pilots because it determines when pilots are promoted, where they fly and when they can take vacation.

Some pilots have already been refusing to do extra work to help the airline run on time as part of a "Do Your Own Job" campaign, which is designed to call attention to a lack of a combined contract in the new airline. That could spread to more intense protests, such as flying slow or calling in sick. That could disrupt the airline -- and passengers.

"It's a big concern of ours," said Parker after the speech. But he added that because of an agreement signed with ALPA in fall 2005, the airline has to accept whatever seniority list is presented to it.

Parker also said he still favors industry consolidation, though he doesn't see any airline merging this year, despite a weakened economic outlook in the business. Parker tried unsuccessfully to buy Delta last November while it was in bankruptcy court, but his offer was rejected by the airline's creditors.


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