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US Airways to trim unit in Pa.

Wednesday 04/10/2017 - Source: Airline Weekly


US Airways plans to dramatically shrink its already diminished Pittsburgh operation early next year to stem losses brought on by increased competition and a less-than-sizzling local travel demand.
The Tempe airline will reduce the number of daily departures by more than a third, to 68 from 108, and close its pilot and flight-attendant base in the city. Among the non-stop service it is cutting: flights to Denver, Chicago and Toronto. Phoenix-Pittsburgh flights are not affected.
The move will affect nearly 1,000 workers: 450 airport workers and 500 pilots and flight attendants. The airport workers will have the option of relocating to another US Airways city or taking a severance package, the company said. The flight crews will have to commute to or relocate to other US Airways East Coast hubs to work. The announcement is the airline's latest blow to a city that was once the heart of the old US Airways, with more than 500 daily flights before the airline's two trips through Bankruptcy Court this decade.
Pittsburgh business and civic leaders and US Airways employees there, fearful of further cuts, have been peppering US Airways Chief Executive Officer Doug Parker with questions about the airline's plans for the city at every turn since America West and US Airways announced merger plans more than two years ago. They also asked the airline to return some of the service that had been cut over the years, especially flights to Europe.
US Airways listened to the passionate pleas, President Scott Kirby said, but in the end it was purely a financial decision.
The airline has lost $40 million in Pittsburgh in the past year, while its other hubs, including Phoenix, were profitable or broke even.
There were no signs things were going to turn around, Kirby said in an interview Wednesday. He said US Airways used to be able to use hefty profits from its service to major cities to subsidize service to smaller cities, but new competition from Southwest, JetBlue and AirTran Airways in Pittsburgh has shrunk its profits on those routes.
Another factor working against Pittsburgh, Kirby said: The size of the local travel market has grown at a fraction of the rate US Airways has seen in other cities the past four years.
The Pittsburgh market has grown 6 percent in terms of revenue in that time period, compared with 22 percent in Philadelphia and 41 percent in Charlotte, the airline's two largest hubs.
In addition, the increase in fuel costs the past few years far outpaced any revenue gains. The airline decided Pittsburgh was too small a city to support the size operation it has there.
"It just didn't work economically," Kirby said. "There was no epiphany. It was a continued slide into more unprofitable results."
US Airways took pains to note it is not abandoning Pittsburgh, with 1,800 employees remaining at the airport, as well as a maintenance center and flight-operations center.
The airline selected Pittsburgh over Phoenix last year for a flight-operations center for the combined airline, which cost the Phoenix area jobs.
It said it will remain the busiest airline at the Pittsburgh airport after the cuts in terms of daily departures, including regional flights, although Southwest will now overtake the airline in terms of the number of daily flights on regular-size jets.


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