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US Airways acts to boost image with ads predicting 'clear skies ahead'
Tuesday, January 25, 2005

US Airways finally has something to brag about and did so yesterday in newspapers around the country.

Full-page ads in USA Today, The Washington Post, the Pittsburgh Post-Gazette and other regional papers up and down the East Coast touted recent victories with unions and creditors.

In the ad, the nation's seventh-largest carrier predicts "clear skies ahead" as it seeks to re-emerge from its second bankruptcy. A US Airways jet is juxtaposed against a cloudless blue horizon, with the words: "With our most difficult times behind us, we're now ready to take off for the future."

The ads are part of a public relations blitz that began with an e-mail to frequent fliers on Saturday, continues today with an ad in The Wall Street Journal and could spill into other forums over the next few weeks and months.

The launch of the print advertisements -- which also appeared in the large US Airways bases of Philadelphia; Charlotte, N.C.; and Fort Lauderdale, Fla. -- follows a crucial ratification Friday of $353 million in new cuts from the International Association of Machinists and Aerospace Workers, the last of four major unions to approve new concessions.

The agreement will cut pay, reduce benefits, terminate pensions and probably cut thousands of jobs.

All told, the airline now has the $1 billion in annual labor cuts it says it needed to compete head-to-head with discount rivals JetBlue Airways and Southwest Airlines, as well as larger fare-slashing competitors such as Delta Air Lines, which recently announced deep discounts across its system.

Chief Executive Officer Bruce Lakefield told frequent fliers in an e-mail Saturday that "the support and sacrifices of our employees reflects their desire to make US Airways a successful and competitive airline that offers you value, great service and better travel options." Lakefield, in the same message, offered up to 40,000 bonus miles for people who book flights by this Sunday.

He also promised the travelers new business routes from Reagan Washington National Airport, more efficient operations in Philadelphia, new destinations to the Caribbean and Latin America, and new flights in May to Barcelona and Venice -- all moves previously announced.

Nothing was said in the e-mail or the ads about Pittsburgh, where the airline has cut more than 300 daily flights since 2001.

Despite hard-won labor concessions and a new agreement guaranteeing the airline access to cash through June, US Airways still has challenges that were on display over the weekend, with bad weather and snow pounding the East Coast and luggage piling up once again at the Philadelphia International Airport, where thousands lost their bags over the Christmas holiday weekend.

US Airways canceled 1,800 flights from Friday through Sunday, and the Philadelphia airport closed for the "first time in several years," according to the company. Some Philadelphia employees were not able to make it into work due to the snow and the road conditions, making the problem worse.

Another challenge for US Airways, other than operational problems in Philadelphia, is finding enough investment capital to lift it out of bankruptcy and provide it a cash cushion needed to weather the problems now roiling the airline industry.

The airline, which in U.S. Bankruptcy Court documents said it needed $250 million, declined comment yesterday about the search for exit financing.

But Communications Workers of America President Morty Bahr confirmed through a spokeswoman that he was "looking to secure private and public investment for US Airways" in states where the airline employs hundreds and thousands, including Pennsylvania, New York, North Carolina and Virginia. Bahr contended that he had had conversations with officials in all four states.

US Airways made it out of its first bankruptcy with $240 million from the Retirement Systems of Alabama, a state pension fund that holds a controlling stake in the carrier.

Gov. Ed Rendell said last week that he was not considering the use of any state pension money for US Airways. North Carolina officials could not be reached, and a spokesman for the New York State Teachers' Retirement System said it did not have any plans for such an investment.

The executive director of the New York State Teachers' Retirement System is George Philip, who joined US Airways' board in October.

First published on January 25, 2005 at 12:00 am
Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.