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US Airways moves deflate work force, dreams

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Closed down
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Walled off
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Concourse A
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Chris Fillar
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Tom Fontaine is a Pittsburgh Tribune-Review staff writer and can be reached at 412-320-7847 or via e-mail.

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By Tom Fontaine
TRIBUNE-REVIEW
Sunday, December 13, 2009


For Chris Fillar, landing a Pittsburgh-based job as a US Airways pilot more than two decades ago was a dream come true.

It allowed Fillar, a North Versailles native who moved around as an Air Force pilot, to return home for what appeared to be bulletproof job security. At the time, in 1986, the airline and local officials planned to develop a world-class airport that would be the airline's anchor hub for years.

"My expectation was to have my entire career here in Pittsburgh," said Fillar, 56, of Moon. He spoke last week as he prepared to board a flight to New York's LaGuardia Airport, where he has been based since US Airways' Pittsburgh crew base closed two years ago. "Now, who knows what to expect?"

Pittsburgh officials borrowed more than $900 million to build Pittsburgh International Airport, largely to US Airways' specifications, and all seemed well. The region had the most-modern airport in the country, officials talked of massive economic development that would occur because of it and regional leaders hoped the airport was the key to halting the stagnation sweeping the nation's northeastern Rust Belt.

Dreams and reality usually are different, and the vision of economic success that the airport complex would bring suddenly began to fade. Since the new millennium began, the airport has faced crushing blows as US Airways shed more than 500 daily flights here. With those flights went 10,000 locally based jobs and tens of millions of dollars in annual payments toward the massive airport construction debt.

"US Airways let us down as a company. They let the entire region down," said former Allegheny County Controller Frank J. Lucchino, now a county judge.

On the move

Fillar and thousands of others like him still haven't found job stability. Next month, he will move to yet another base -- the second move in two years, this time to Philadelphia. He's one of hundreds of employees who will relocate when crew bases in New York, Boston and Las Vegas close; many are Pittsburghers who transferred when Pittsburgh's crew base closed in 2008.

US Airways remains Pittsburgh International's busiest carrier. How long that will last remains to be seen. The company has still more consolidation plans, which will mean elimination of an additional 1,000 jobs as it shifts 99 percent of its flights through hubs in Philadelphia, Charlotte, and Washington.

The company plans to cut costs by eliminating unprofitable flights, deferring taking delivery of new planes and trading 125 takeoff and landing time-slots at LaGuardia to Delta Air Lines for 42 slots at Washington.

"We don't take these decisions lightly," said US Airways spokesman Morgan Durrant. "We realize the decision to reallocate flying affects people, but to have crew bases where you have less than 1 percent of your flying isn't efficient."

Dave Griffin has a different point of view.

"I moved 20 years ago for this company, but I refuse to do it again," said Griffin, a 20-year flight attendant from Murrysville who has commuted to his current base at New York's LaGuardia since the Pittsburgh base closed. When the LaGuardia base closes, his commute will switch to Washington.

Griffin, 55, moved here two decades ago from Bogalusa, La. Like Fillar, he was encouraged by what was happening in Pittsburgh: US Airways' operations were based here and the airport construction was under way.

"The company was looking to the future, and I had every reason to think I'd retire here," he said.

Patty Cole, a 63-year-old South Hills native, thought the same thing when she became a US Airways flight attendant 12 years ago after returning to the region with her husband.

But when the airline began shrinking the Pittsburgh base in 2005, Cole transferred to Boston's Logan International. She and her husband sold their North Huntingdon home and moved to Boston, where their grown children live. She's unsure whether she wants to commute elsewhere when her base closes in May, though she says it'd be hard to walk away from medical benefits because her husband has health problems.

"At 63, I didn't think I'd be in this position," Cole said.

Cole said she'd probably wind up "on reserve" wherever she'd go, because of her relative lack of seniority. Commuters on reserve must report to bases in case a fill-in is needed; often, they don't get called out. That means lots of waiting around, and added expenses, away from home.

"Everyone knows what the company did to Pittsburgh. It's like they made it a ghost town," said Lynne Caramello, president of the Association of Flight Attendants' Council 69 in Boston. "But we've never been in a situation where you don't know day to day what the plan is.

"You used to be proud to be with US Airways, but there's no allegiance anymore. There's no respect, because you get no respect. People are just hanging on because it's their job."

Get together?

Many workers think the company is closing bases and making other cost-cutting moves to package itself for a merger.

US Airways Chairman and CEO Doug Parker has been a proponent of consolidation, helping orchestrate the 2005 merger between US Airways and America West and later pursuing deals with Delta and United Airlines. Meanwhile, US Airways has yet to reach joint labor pacts with its two largest labor groups, pilots and flight attendants, from the America West merger. Durrant wouldn't say whether the airline is involved in merger talks.

"We're all waiting for a merger, even though (the company is) denying it," Caramello said.

Helane Becker, a New York-based analyst with Jesup & Lamont Securities who watches US Airways closely, said United and American Airlines are viable merger partners for US Airways, based on complementary route structures.

At the same time, she said, "to be attractive to another airline, (US Airways would) need to put themselves in a position to be reliably profitable with or without being acquired. Otherwise, the other airlines would look at it and say, 'Why buy them now when we could just buy their assets through bankruptcy?' "

Despite turning a $58 million net profit in this year's second quarter, US Airways lost a combined $125 million through September and $2.2 billion in 2008. But Becker doesn't see bankruptcy in US Airways' near future, based on the cost-cutting. "It's holding its own," she said.

Abandonment issues

US Airways' cuts in Pittsburgh have had a profound effect.

Pittsburgh went from being the airline's workhorse hub to a "focus city" to a plain old destination, as the airline labored through two bankruptcies, a fuel crisis and a recession.

US Airways in Pittsburgh is down to 46 daily flights to 11 destinations. At its peak before 9/11, Pittsburgh boasted 550 US Airways flights to 110 destinations.

Still US Airways remains the airport's main carrier, with 28 percent of the traffic, and its top employer, with 2,000 workers. It had more than 12,000 workers in Pittsburgh before 9/11.

"Nobody ever anticipated they would abandon Pittsburgh the way they did," said Lucchino. "They had 90 percent of the flights, they were intimately involved in every meeting related to that (airport construction) project, most of their workforce was here and everyone viewed them as a Western Pennsylvania company."

How it began

US Airways traces its roots to 1939, when All-American Aviation began operating nonstop airmail service out of Pittsburgh. It became All-American Airways a decade later when it began carrying passengers, then changed its name in 1953 to Allegheny Airlines. Allegheny became USAir in 1979 and US Airways in 1996.

The airline, said Brad Penrod, Allegheny County Airport Authority's executive director, "was the most profitable carrier in the country at the time they asked the community to build this airport. There probably is not a community in the country that wouldn't have done the same thing."

"It was perhaps the most profitable airline flying domestically, and had a bright future," said Bill Lauer, a Sewickley-based airline industry analyst. "Then it jumped into the merger-and-acquisition business by acquiring Pacific Southwest Airlines and Piedmont Airlines in the late '80s. Their digestion created dyspepsia for about six years."

USAir lost more than $3 billion between 1989 and 1994, including $1.2 billion in 1992, the year the airport opened.

Reversal of fortune

Officials believed the $1 billion airport was worth every penny. They thought it would become an increasingly powerful economic engine as land around it was developed and US Airways' traffic grew.

In many ways, the opposite happened.

A report released last month said the airport directly or indirectly supports 71,000 jobs that pump $5.7 billion into the local economy -- 24,000 fewer jobs than in 2000, and an inflation-adjusted $1.1 billion in reduced economic activity.

Officials predicted Pittsburgh International would have 32 million passengers by 2003, twice Greater Pittsburgh Airport's traffic in its last year. But only 14.3 million passengers used the airport in 2003; more used Greater Pitt in each of its last seven years. Pittsburgh International's traffic peaked in 1997, at 20.8 million.

"It's hard to blame local officials. When they made a decision to invest in that airport, it was critical to Pittsburgh being on the map. I don't think it's a decision you can look back on and regret," said Bill Swelbar, a research engineer with MIT's International Center for Air Transportation.

In 1997, leases and fees US Airways paid accounted for more than $50 million, or 85 percent, of the airport's annual debt-service payment.

This year, the airline will contribute $10.5 million to the airport authority's $62.5 million debt service, airport officials said. The airline reduced its share by flying less, translating to less money on landing fees, and shedding 30 gates it had agreed to lease until the 30-year bonds floated in 1988 for airport construction were paid off in 2018. Bankruptcy reorganization allowed the airline to extricate itself from the leases. By contrast, British Airways still pays on its long-term contract, although it no longer serves Pittsburgh.

Durrant said economic conditions left the airline no alternative: "With operating and profit margins so narrow in this industry, you just can't let unprofitable flying go." The airline lost $40 million in Pittsburgh in 2007, but cuts here stabilized the market, the airline spokesman added.

Pittsburgh's 12 other airlines, which steadily increased their presence as US Airways retrenched, will put about $28 million toward this year's debt service. The authority will cover the remaining $25 million through passenger facility charges on departing passengers and through parking and concessionary money. Next year, for the first time, the authority plans to use $10 million in state gambling proceeds to help pay down debt.

More than half the bond money -- $479 million -- to build the airport remains outstanding.

Kent George, a former Airport Authority executive director who heads the Broward County (Fla.) Aviation Department, remains apoplectic over the situation.

"US Airways ... made promises that this was going to be a hub and this was going to be our future. Our community did an awful, awful lot to get this done and, in doing so, put its best foot forward. US Airways certainly did not," George said. "They were disingenuous to us and, in many cases, they made promises they didn't live up to."

Lucchino agreed, but noted US Airways' management team is composed of executives from the former American West.

"They probably have no recollection of history, nor should they. They're Arizonian," he said. "Pittsburgh is just a place on the map, a destination, to them."


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