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Roddey calls for summit on US Airways
Saturday, May 27, 2000 By Frank Reeves, Post-Gazette Staff Writer
Allegheny County Executive Jim Roddey plans to call a Tri-State summit of political leaders to develop ways to ensure that jobs and flights in the region aren't lost as a result of United Airlines' proposed takeover of US Airways.
Roddey said he plans to invite members of the Pennsylvania, Ohio and West Virginia congressional delegations to the summit. He also said he hoped state lawmakers from each of the three states would attend.
Roddey disclosed his plan yesterday during a taping of "KD/PG Sunday Edition," a television news program that will be broadcast 11 a.m. tomorrow on KDKA.
Earlier this week, United, the world's largest carrier, agreed to buy US Airways for $4.3 billion in cash and the assumption of an additional $7.3 billion of debt and lease agreements.
With nearly 12,000 employees and an annual payroll of $850 million, US Airways is the region's largest private employer and by far its biggest airline, accounting for nearly nine of every 10 flights out of Pittsburgh International Airport.
Since the merger announcement, political leaders have been trying to find ways to blunt potential job losses and service cuts.
Airline officials, beginning with US Airways Chairman Stephen Wolf and United Chief Executive Officer James Goodwin, have sought to assuage the fears of local business and political leaders.
But in the days since the announcement, Roddey and other regional leaders have expressed cautious optimism at best about the benefits of the merger.
Even before the summit, Roddey said he plans next week to meet with Wolf and Goodwin.
Roddey said he hopes his talks with the two executives result in the resolution of some key issues, including:
On Thursday, Allegheny County Controller Dan Onorato said he feared taxpayers might have to pick up the costs if United scales back operations in Pittsburgh, even though under existing airport agreements, airlines who use the airport pay for the bonds through landing and takeoff fees and other charges.
Roddey disputed Onorato's findings, saying that even if United eliminated all flights in Pittsburgh, it would be obligated to honor US Airways commitments. He said the airport bonds are also insured, and should the airline default, the insurance companies would have to pick up the tab.
US Airways has three hubs -- Philadelphia, Charlotte, N.C., and Pittsburgh. Pittsburgh's status as an airline hub, which allows more direct access to U.S. and overseas destinations, is a major selling point in attracting businesses to invest in the region.
In his talks with Goodwin and Wolf, Roddey said he wants assurances that United doesn't plan to scale back the maintenance facility, which employs about 5,700 people.
Roddey said he won't be pressing United to go ahead with US Airways' previously announced plans to build an expanded, state-of-the-art facility capable of accommodating its new Airbus jets.
United has a $1.1 billion maintenance facility that's still under construction in Indianapolis but already is being used and should be completed within a few years.
United has said it has no plans to lay off any US Airways employees for the first two years after the merger. But Roddey is concerned about what will happen after the two-year moratorium expires.
United also has said it intends no increase on domestic ticket prices for the first two years after the merger. But Roddey wants to discuss that with Wolf and Goodwin, saying a prize freeze simply leaves in place what many in the region already regard as high airline ticket fares.
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A commitment from United to meet US Airways' current obligations to pick up the lion's share of the yearly payments of about $60 million on the $1.4 billion in debt on Pittsburgh International Airport's new terminal and other projects.