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US Airways feels heat from low-fare carriers
Renowned for its low fares, Southwest said Tuesday it would launch about 14 daily flights from Philadelphia International Airport in May "to a variety of short- and long-haul destinations." Specific cities and fares will be disclosed later.
Two of US Airways' three hubs are in Pittsburgh and Philadelphia. The other is in Charlotte, N.C. Since exiting bankruptcy last March, US Airways has been re-evaluating its presence in Pittsburgh.
"This puts more pressure on US Airways to keep as many flights as they can and in as many places as they can," said Jim Roddey, Allegheny County Chief Executive.
If the county doesn't slash the carrier's costs at Pittsburgh International Airport, the airline could abandon or drastically downsize its hub here. That could happen in January, but the airline assured U.S. Sen. Rick Santorum, R-Penn Hills, it wouldn't downsize the hub this winter.
The airline continues to negotiate with Allegheny County and state officials. Roddey said he plans to meet with state lawmakers now that US Airways has lobbied top Democrats and Republicans in Harrisburg for financial support.
"This could affect Pittsburgh. It's clear US Airways wants to stay in Pittsburgh, or it wouldn't go through all these studies and negotiations," said Mike Boyd, head of the Boyd Group, an airline consultancy based in Evergreen, Colo.
"Moving some connecting traffic to Pittsburgh might make more sense. Pittsburgh is a better connecting hub than almost anywhere I can think of," he said.
Boyd said Southwest's Philadelphia foray was mostly an attempt to "pre-empt competition from JetBlue" on the East Coast. Also a low-fare carrier, JetBlue is aggressively buying planes and adding destinations.
Based in Dallas, Southwest serves 58 U.S. cities with more than 2,800 daily flights. Profitable in 30 of the last 32 years since its founding, Southwest also has chosen new destinations carefully.
"Right now, US Airways is caught between a major upcoming battle between two, low-fare carriers," Boyd said. He and other analysts note Southwest's move into Baltimore in 1993 pushed US Airways out a few years later.
Allegheny County officials had talked with Southwest in the past month about starting service in Pittsburgh. But new service in Philadelphia probably won't help prospects here, said Darryl Jenkins, director of George Washington University's Aviation Institute.
"Pittsburgh would be low on Southwest's list anyway. They want cities strong and growing," Jenkins said.
The Allegheny County Airport Authority was "disappointed Southwest chose Philadelphia," said authority Director Kent George. "But it means they have another toehold in the East. So (Pittsburgh) could be considered again."
US Airways CEO David Siegel has often said the airline, the nation's seventh-largest, is being pressured in many markets by low-cost carriers, such as Southwest.
"The success of our restructuring is increasingly being challenged every day by low-cost competitors," he told Wall Street analysts on Oct. 20 to help explain US Airways' $90 million quarterly loss.
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