Bad news on US Airways a recurring theme

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The hub is gone, thousands of jobs and hundreds of flights have departed, and now what little is left is going, too. What exactly does US Airways have against Pittsburgh?

It's a logical question after Friday's bad news involving the carrier and the city. American Airlines, which merged with US Airways last month, decided to close the flight operations control center in Moon and transfer the 600 jobs to Dallas-Fort Worth, its corporate home.

It's just the latest in a series of haymakers that has left the region as punch drunk as any prize fighter.

From the closing of a reservations center in Green Tree to the loss of flight simulation training in Moon to the shutdown of the flight crew base to the abandonment of its hub at Pittsburgh International Airport -- it seems that nearly every decision the airline has made over the last decade has gone against the region.

"How many wake-up calls do we need from US Airways to see that we're not part of their strategic plan?" asked Kent George, former executive director of the Allegheny County Airport Authority.

The upheaval has cost the region jobs and flights.

Employment has tumbled from a peak of about 12,000 jobs to 1,800 today. Pittsburgh will lose another 600 with the loss of the operations center and 53 more in a maintenance "rebalancing" expected to take effect in March.

The number of US Airways daily flights has plunged from a high of 542 in September 2001 to an average of 41 today. Stripped of its hub in 2004, Pittsburgh has lost service to cities large and small, from London to Harrisburg.

"You look back on it, at every opportunity to diminish the significance of an asset, to reduce it, or to withdraw it, the corporate decision has been in favor of eradication, elimination, or diminishment," said William Lauer, an Allegheny Capital Inc. principal who has followed the airline industry for years.

But don't take it personally.

While the repeated cutbacks might convince some that US Airways -- and now American, through its merger with the carrier -- has it out for the city, that's not the case, experts say.

It's the cold calculus of business, not a chip on the shoulder, that has done in Pittsburgh, they assert.

"As it stands, everything the airline has done has got a firm grounding in economics. It's got a firm rational basis. It's not like the airline is conducting itself for the purpose of punishing southwestern Pennsylvania," Mr. Lauer said.

William Swelbar, a MIT airline researcher and executive vice president of Intervistas Consulting, an aviation consulting firm, said that Pittsburgh fell victim to the upheaval in the airline industry after the terrorist attacks of Sept. 11, 2001.

Mid-continent hubs used primarily for connecting traffic like Pittsburgh became less profitable and the emergence of low-cost airlines like Southwest caused profit margins to erode and forced legacy carriers like US Airways to be more cost conscious.

"We have an industry today that is much more profit focused than at any time since the industry was deregulated," he said.

At the same time, airlines concentrated their hubs to bigger cities to take advantage of larger numbers of originating and destination traffic. What happened in Pittsburgh through much of the last decade is happening in cities like Cincinnati and Memphis today, where hubs are being shut down.

"I don't think any amount of money could have been spent to keep the hub [in Pittsburgh]. It's an unfortunate story and a geography that didn't work in the new airline map," Mr. Swelbar said.

The struggles after Sept. 11 forced US Airways into bankruptcy twice and into a merger with America West Airlines, whose leader, Doug Parker, became head of US Airways and now the new American.

Mr. Swelbar and Mr. Lauer said the decision to close the state-of-the-art flight operations control center, the latest blow to the region, appeared to be rational, at least from the business standpoint.

American intends to consolidate the work in Dallas-Fort Worth, where it has its own flight operations center, over the next 18 months. It said that all Pittsburgh workers who want to transfer will be able to do so. Those that don't will receive severance packages.

Built for US Airways

Like the $1 billion midfield terminal that opened in 1992, the $32 million Moon flight operations center was built specifically for the needs of US Airways. It opened in November 2008 after the region beat out Charlotte, N.C., and Phoenix to retain the work.

US Airways has been operating the facility through a 20-year lease with the airport authority under which it pays $1 a year.

Mr. Lauer said the American center in Dallas-Fort Worth is much larger than the one in Moon and is part of a campus that includes the airline's headquarters and flight training facility.

"I think it's less about Pittsburgh and more about the fact that it just makes sense for them to have an operations control center in one place," Mr. Swelbar said. "You guys just take another punch for consolidation."

But Mr. George, formerly of the county Airport Authority, questioned the decision. He pointed out that the Moon center handled all US Airways domestic and international traffic even though Pittsburgh wasn't a hub and the airline's headquarters was in Phoenix.

"I don't understand what they're doing. It's a brand-new facility that I would think is capable of handling the entire new airline," he said. "It has not a thing to do with the location of the dispatch center. That all can be handled by the available current technology. You do not have to be at their corporate headquarters."

County Executive Rich Fitzgerald said he hopes to market the facility to another user who can "put a lot of jobs into that building." While he also saw the closing as a business decision given the larger center in Texas, he couldn't help but notice a pattern.

"I think this whole region the last 10 to 12 years, things have not gone well with that airline. Not everything that was supposed to be done has been done," he said.

Neither Mr. George nor former county executive Jim Roddey believe anything could have saved the hub in Pittsburgh. But what they take issue with is what they claim was a lack of forthrightness in the airline's dealings with them.

They cited as one example the decision by the airline to reject its leases at the airport right before emerging from bankruptcy in 2003. They insisted that the airline had told them in the weeks prior that it would honor the leases.

"I don't fault US Airways for how they are establishing their route structure and where they're going to put their focus cities. What I fought them on was the way they did it," Mr. George said.

When US Airways complained about high landing fees at the airport being an impediment to doing business in Pittsburgh, Mr. Roddey said he pressed the airline to give him a number on the kind of reductions it wanted, but never heard back. He saw it as a "smokescreen."

But one former top US Airways official who asked not be identified said that while he does not know if the airline would have kept the hub if fees were reduced, he believes it would have maintained a larger presence here than it has now.

He said that all of the decisions the airline made were based on what was happening in the industry, from the competition from low-cost carriers to airline consolidations to Pittsburgh's relatively weak originating and destination traffic.

"The economics didn't add up," he said.

Todd Lehmacher, an American spokesman who has served in the same capacity for US Airways, said all decisions past and present have been purely "business decisions."

"We're a company and we have to do what's right for our shareholders and what makes financial sense for our company and what's better for our employees long term," he said.

Saving the maintenance base

With Friday's announcement, Mr. Fitzgerald and the local congressional delegation have turned their attention to trying to save the last big piece of former US Airways work in Pittsburgh -- the heavy maintenance base that employs more than 900 people.

The lease for the base, which primarily services narrow-body Airbus jets, expires at the end of 2015. U.S. Rep. Mike Doyle, D-Forest Hills, said US Airways told him that no decision has been made.

"I think we at least have a shot at that one. There's other places they can go, obviously, but I don't think it's as clear a choice as Dallas," he said.

While Mr. Doyle conceded that dealings with US Airways have been "very frustrating in the past," he said he wanted to focus on trying to attract more airline to Pittsburgh, particularly with the Marcellus Shale payments now available to the airport.

"We've got to move forward. We can't ruminate about the past and who wronged who. What we have to do is try to bring more carriers into this region and that's where our focus is," he said.

But Mr. Roddey said there's a reason some people might feel betrayed by the decisions the airline, whose roots in Pittsburgh go back more than 50 years, has made over the years leading to the loss of so many jobs and flights.

"I think we feel the pain more than we might otherwise because we built the airport to US Airways' specifications and we sort of felt US Airways was a Pittsburgh company," he said. "We ended up with a lot of expectations, a lot of promises, and a lot of disappointment."


Mark Belko: mbelko@post-gazette.com or 412-263-1262.

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