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SWA at PIT - The End of U.S. Airways?
A.P. Pittsburgh - First at Philadelphia International Airport, then at
Pittsburgh, there was relief and then unabashed joy over the arrival of Southwest Airlines, an industry star that seems to lower fares and boost travel wherever it lands. It is bittersweet news for Pennsylvania, however, because it is bad news for US Airways. US Airways has a deep footprint in Pennsylvania - deeper than in any other state - even after scaling back its presence here. Though Pittsburgh lost its hub status, Philadelphia remains one of the airline's two remaining hubs and the company employs more than 11,000 statewide. Now, after putting pressure on US Airways in cities from Baltimore to Albany, Southwest could finish off US Airways altogether through its strategy of expansion in Pennsylvania, industry analysts say. State officials continue to work with US Airways, under bankruptcy protection for a second time, in an attempt to lower costs. Even Wednesday, just hours before Pittsburgh International announced Southwest was coming, airport officials were on the phone with US Airways chief executive Bruce Lakefield trying to cut a deal. The Rendell administration said it is premature to talk about the collapse of US Airways, which recently won a favorable ruling in bankruptcy court that the airline said would prevent immediate liquidation. "We are not giving up hope and we're pleased that others continue to look here," said Kate Philips, spokeswoman for Gov. Ed Rendell. "Whatever happens, we are hopeful that jobs in Pittsburgh and in the state's airline industry as a whole will be maintained." How the demise of US Airways would affect Pennsylvania, no one can say. But the financial ties between the airline and the state as recently as three years ago made the thought of its loss nearly unimaginable. In 2001, the last year the company calculated economic impact, US Airways spent more than $2 billion in Pennsylvania and employed 18,092. But that presence has already fallen precipitously, to 11,614 employees today, according to figures provided by the company. Employment in Pittsburgh stands at 6,038 and in Philadelphia at 5,459, said David Castelveter, a US Airways spokesman. Southwest has grown rapidly in other markets it has entered, showing what might happen as a result of its two-pronged attack on US Airways in Pennsylvania. "Being a hub was one of the best things that ever happened to us and losing the hub was the best things that ever happened to us," said Mindy Hamlin, spokeswoman for Raleigh-Durham International Airport. At the height of Raleigh-Durham's operations as a hub in 1992, American Airlines and its American Eagle unit offered over 200 daily departures from the airport, more than a two-thirds of all daily departures. American "dehubbed" the airport in the mid-1990s, and Southwest showed up four years later. Passenger numbers have fallen at the airport from 9.9 million to 7.9 million. But origination and destination passengers, those who live in or travel directly to the region, have risen nearly 100 percent to more than 7.4 million. That means more people are flying to and from the region, not just passing through. "We discovered an incredibly strong market, partly because it was a period of growth for us, but other airlines recognized what was already here," Hamlin said. Southwest showed up at Baltimore/Washington International Airport in 1993 when US Airways had a 40.4 percent market share, according to spokesman Jonathan Dean. The airport then had 9 million passengers annually. Southwest surpassed US Airways before the decade ended, and contributed to a more than doubling of traffic by 2003 to nearly 20 million passengers, Dean said. "Southwest is not only the largest airline serving this airport, but they do have a significant employee presence, from the pilot and crew base to marketing professionals, maintenance and passenger service employees," he said. Southwest said it now employs about 2,900 people at BWI. Pennsylvania has a significant demand for air service and other airlines will likely fill any gaps that arise, said Michael Allen, an industry analyst with Back Aviation Solutions of New Haven, Conn. Early indications show Southwest, in Philadelphia, has repeated growth patterns it has achieved elsewhere in the country. After beginning service May 9 with 14 flights to six cities, the airline is now offering 41 flights to 16 cities. But US Airways' sizable support network in Pennsylvania - and what might happen to it - is a big concern. In Nashville, a one-time American hub, Southwest arrived in 1986 with eight flights to two cities. Southwest now offers 86 nonstop flights to 27 cities from Nashville. The region suffered job losses with the loss of hub status, though not nearly as many jobs as Pennsylvania could lose if US Airways does not survive. Pittsburgh alone provides jobs for about 2,000 mechanics, clerks, cleaners and baggage handlers. It is not clear how many of those jobs would be replaced even if other airlines bump up service. Southwest appears to be methodically targeting US Airways, but part of the reason it has done so is that both run "shorter stage lengths," competing for same markets, Allen said. Southwest, however, has been able to fly cheaper, in part, because it shops out tasks not directly related to its core business. Built for $1 billion, largely to the specifications of US Airways, Pittsburgh International began preparing for the worst in 2002 when the airline first sought bankruptcy protection, said Kent George, the airport authority's executive director. The airport began transforming itself from a hub operation to a facility geared toward handling more direct flights. "If they go belly up, we will never have 500 departures again from a hub carrier and there will not be 11,500 employees here from a hub carrier," George said. The authority is now working to create new jobs at the airport to replace the ones that may disappear if US Airways does not survive. Some employees are already preparing for the worst. Pilot Lou Bailey, who lives in a suburb of Pittsburgh, flies four days out of the week for US Airways and spends the other three studying to be a nurse. "If the money were equal, I'd rather be flying," he said. Bailey is also preparing a resume that he will send to Southwest Airlines |
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