US Airways to shut down one of its subsidiaries


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US Airways to shut down one of its subsidiaries

AP Business Writer

ARLINGTON, Va. -- US Airways announced plans Wednesday to shut down its Allegheny Airlines subsidiary by the end of March, either by merging operations into another subsidiary or by liquidation.

Allegheny Airlines, based in Middletown, Pa., near Harrisburg, employs 1,421 workers and flies 41 Dash-8 turboprop planes that each carry 37 passengers. It serves 38 cities, mostly in the mid-Atlantic region.

The job losses associated with the plan are uncertain. The airline said its preferred path is to merge Allegheny's operations into Piedmont Airlines, another turboprop subsidiary based in Salisbury, Md.

But the airline threatened that it may have to liquidate Allegheny's operations entirely if it cannot reach agreement with its unions on a consolidation plan. US Airways management met Wednesday with labor groups to discuss its plan; union officials could not immediately be reached for comment.

"Turboprop aircraft will still have a role in our network, but it is inefficient to have two wholly owned Dash-8 operators with duplicative overhead functions for a shrinking part of the company," said Bruce Ashby, president of US Airways Express, which oversees the subsidiaries that fly under the US Airways Express banner.

Piedmont, with 2,090 employees, also operates 41 Dash-8 turboprops. Spokesman David Castelveter said the two airlines operate in many of the same cities, including the airline's hubs in Philadelphia and Pittsburgh, but that their route networks have little overlap.

"Our intention would be not to significantly shrink the size of the combined operation," he said.

In the long run, though, US Airways plans to reduce its reliance on turboprop planes in favor of regional jets, which are preferred by travelers.

Arlington-based US Airways, which employs 28,000, emerged from bankruptcy last year with the help of a $1 billion federally guaranteed loan. That money was supposed to bankroll its plan to expand use of regional jets, but the airline has struggled to meet its revenue projections under increased competition from low-fare airlines and continued weakness in high-yield business travel.

US Airways shares were down 10 cents, to $5.20, during midday trading on the Nasdaq Stock Market.

Allegheny began operations in 1946 as Reading Aviation Services and began operating commuter flights for USAir since 1973. It was purchased by USAir Group in 1986.
U.S Airway's future does not look positive. Its a shame because it is/was such a great airline (my personal fav). I heard a while back that they were pulling out of PIT. Anyone have news on that situation?
But the airline threatened that it may have to liquidate Allegheny's operations entirely if it cannot reach agreement with its unions on a consolidation plan.

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Oh boy, that would suck.
#2 al-uh-gain-ee . . . Allegheny

It's a shame too . . . I don't know too much about them, but was keeping them in mind for post-training . . . as they are one of a few based around my home area.
This ones hits close to home, thier hangar is two down from mine and most of my CFI friends have gone on to work for Allegheny and are looking being out of a job very soon. I've had a few friends downgraded from Capt. back to FO in this past year ... ie: drop in income. Aside from that we are getting flooded with resumes and I would like to help each one of them but can't.
My advice if you own stock ... SELL.

I live right outside Pgh near the airport as well and all my childhood grew up watching the legendary colors of this airline fly in and out of the airport. The industry has changed dramatically and it is always sad seeing alot of the successful pioneers in a sense being phased out or already out of the picture.

To be honest.. I haven't followed up recently with the news but to somewhat attempt to shed some light on that last question regarding USAir's lease in pgh I think they had came to an agreement to extend their lease on a smaller number of gates at the airport still. The last I heard on the selling of assets they only included maintenance equipment I believe out of Pgh..

That was the last I had heard since it's been a little busy here at work lately.. so.. may have been more changes no doubt !!
I know one of the guys who runs the airport here at Pit. He said (on christmas eve) that they were still talking, but i think they let go of 40/50 gates here and kept 10. i dunno about maintenence though. I too shall miss them, first time i ever flew with them was when i was 3 weeks old. hopefully they can pull it together...ive got one question though...if they were to shut down 1 of the 3 hubs, which one do you think they will/should?
If they shut down a hub, it will be PIT, unfortunately. CLT has always been the moneymaker because of the convenience of connecting flights to/from Florida and the Caribbean, plus the city's large banking industry is a big source of O&D traffic. PHL functions as US Airways primary international gateway, and like most airlines transatlantic flying is a moneymaker for them. Plus, Philadelphia is the fifth-largest city in the United States, and that also gives them a large amount of O&D traffic. PIT has a smaller O&D market, and a terminal that, while one of the best in the country, is expensive to operate from. Allegheny County and the city of Pittsburgh have their own financial problems, and giving US the cost breaks they want/need will put a serious damper on their already strained coffers.

As for Piedmont/Allegheny I think the writing has been on the wall there for a while. Two separate subsidiaries operating the exact same aircraft type on overlapping routes; it only makes sense to consolidate them, especially given that they are slowly phasing out DHC-8 service anyway.

Am I the only one who is wondering whether Gordon Bethune will be coming out of "retirement" in '05 to take an office in the Crystal Palace??

PHL may or may not be the one to go. SWA moving in there has a lot of people shaking. Although it's not going to be all that many flights the first year. I think we're only getting like 1 or 2 from MCO and maybe 3 from BWI to PHL. A lot of the guys I work with are talking of transferring there, which is good since they are all above me in seniority.
Does anyone have any theories on USAir's demise in terms of their business plan?

I think the first problem, on a lot of levels, is the standard method of keeping your failing business plan and squeezing the hell out of your employees to make up for poor planning.

And the second problem is the fact that they're extraordinarily open to LCC's because of the thin route structure. Perhaps if they had a more balanced domestic route structure they may be able to effectively fight back.

For example, American has a pretty decent domestic route structure and they're highly competitive. When a LCC enters one of AA's markets, they'll sqeeze the crap out of those common markets and make up the lower revenue in other markets.

Random, pre-coffee thoughts.
Does anyone have any theories on USAir's demise in terms of their business plan?

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as you stated before its a bit odd that USAIrways isnt trying anything new. Delta's Song seems to be doing well enough and Ted is still to come. In a way they are expanding their route structues westward with their new codeshare with United, and Honestly i dont know how thats working, or if theyve even had enough time to see. I dont know if more RJs are the answer, although it seems to be working well for DL and CAL. Maybe an RJ hub such as PIT is the answer. AA is having success in STL with its restructuring and is now replacing high performing RJ routes with mainline again. Maybe USAirways Still has to many turboprops? Maybe they need to rename their RJ express Division as JetConnection or something. Just a few ramblings...
Well is U.S Air moves out of PIT, whos movin in?

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We have a new Low Cost Carrier moving in, currently known as Project Roam..This is their website I heard, they had around $60 million, and need $150 million. We'll see how it goes, I think they wanted to set up operations out of PIT only, with tickets no more than $99....
Well is U.S Air moves out of PIT, whos movin in?

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Remember when Midway tanked? They took over MDW in less than 48 hours.....Makes ya think, esp since PHL is their next city and they previously clobbered Metrojet/USairways outta BWI.
Midway got beat in PHL, not PIT. My mom used to work for Midway when that happened and do I miss all of those employee benefits.
This thread is getting really confusing.

Midway did 3 flts a day from RDU to PHL. Is Southwest now doing RDU-PHL?

I don't think we ever did PIT.
Here's the cities SWA will be flying to/from PHL:


I'm surprised BWI isn't in there since it is the gateway to the northeast pretty much. It also happens to be my arguement that SWA is a psuedo-hub and spoke airline now. There is a flight from MCO to BWI darn near every hour, and pretty soon MDW is gonna be about the same.
Midway has not been based in MDW since 1994.

I think you may have your airlines crossed!

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Um, that's when SWA took over MDW in 48 hours. They put up the gates behind walls ready to start service as soon as they got the OK. When the OK was given, the walls came down, planes came in, and service began.