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Thomas Olson can be reached via e-mail or at 412-320-7854.
Allegheny County Chief Executive Dan Onorato said US Airways CEO Bruce Lakefield told him the airline would know in four months whether it will survive.
"In four months, they should have a good understanding of whether they will make it or not," Onorato said after speaking to Lakefield for the first time, for about 30 minutes. "He made it very clear they're in a fight for their survival. ... I'm not sure if they know if they can make it or not."
In a restructuring plan outlined yesterday, the struggling airline hopes to increase point-to-point service between New York, Boston and Philadelphia. At the same time, the carrier might lower air fares in Pittsburgh to stimulate passenger traffic, as it did last week in Philadelphia to combat Southwest Airlines, said a labor leader briefed on the plan. If successful, US Airways might add point-to-point flying later from Pittsburgh, too.
That is, provided US Airways can slash costs by about $1.5 billion this summer, Lakefield cautioned.
Regarding Pittsburgh, Onorato said the airline's language has shifted away from its status as a hub city.
"US Airways could remain a major carrier in Pittsburgh even though they're shifting away from the hub-to-hub system," Onorato said. "Pittsburgh could remain a focus city, which means it would be a critical point-to-point city."
"The hub system as we've known it is being downsized or changed in some way," Onorato said, adding that Lakefield provided no specific figures on how many jobs would remain at the airport.
What does that means on the ground at Pittsburgh International? "That's the million-dollar question," Onorato said. "No one seems to know."
Meanwhile, Lakefield told Gov. Ed Rendell in a letter yesterday that US Airways would maintain flights, destinations and employment at their current levels through September. The CEO did not anticipate "any significant change at Pittsburgh for the fall schedule," he said.
The airline has 373 daily departures from Pittsburgh International, where it controls about 80 percent of the traffic. US Airways employs nearly 8,000 people in this region.
"Our goal as we start this process is to preserve as many jobs as possible, with service to as many communities as makes economic sense," Lakefield wrote Rendell. "But there are going to be many difficult decisions we will undoubtedly face as we work through these issues with our labor leaders."
Airline management met with about 35 labor leaders at its headquarters in Arlington, Va., to outline the restructuring plan.
Union leaders said Lakefield told them he "doesn't see his mission as selling the airline off, either in whole or in parts."
To restructure, US Airways said it would:
The company plans to meet separately with leaders of unions for flight attendants today and with customer-service and ticket agents on Friday.
Next week, US Airways expects to begin contract talks with the Air Line Pilots Association, the only union to agree to such negotiations so far. Those talks were to have started Tuesday but were delayed.
Pilots union spokesman Jack Stephan was optimistic about US Airways' restructuring plans.
"We're encouraged by the fresh thinking and bold marketing strategy that's embodied in this plan," he said. "For too long, this company and its employees sat on the sidelines as observers of the industry, reacting to changes."
In a statement, the Association of Flight Attendants said, "(Management) made no bones about the fact they are looking at reductions in rates of pay, seniority, benefits, productivity, scope (subcontracting), and specifically for passenger service, more automation at the airports." The union represents 1,175 local workers.
"Whether they succeed depends largely on labor at this point," said Standard & Poor's analyst Phil Baggaley. "Plan A clearly is to try to lower their costs and fix the airline. Plan B is to sell some assets and pay down some debt. But that's only an interim solution.
"And we all know what Plan C is, because they've been there before," Baggaley said in reference to US Airways' bankruptcy filing in August 2002.
Yesterday, Standard & Poor's cut its credit rating on US Airways, which could jeopardize funding to acquire 70-seat regional jets. The modern aircraft are a key part of US Airways' turnaround plans.
S&P reduced US Airways' corporate credit rating to "CCC+," or junk-bond status, from "B-." The downgrade means General Electric Capital Corp. might pull US Airways' financing for regional jets.
The airline is financing through GE the acquisition of 85 regional jets worth $2.1 billion from Embraer by September 2006. Four of them are already flying for MidAtlantic Airways, the Pittsburgh-based express division of US Airways.
GE Capital spokesman Eric Jones said only that the Stamford, Conn., company is "in discussions with the airline on the financing going forward."
US Airways "anticipated a possible downgrade," said airline spokesman Dave Castelveter, and is seeking to modify funding requirements from GE and Embraer.
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