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US Airways, Could They Re-invent Themselves  
User currently offlineSunValley From , joined Dec 1969, posts, RR:
Posted (10 years 5 months 3 weeks 4 days 22 hours ago) and read 3348 times:

There is an interesting article abou US Airways.

http://www.thestreet.com/markets/ericgillin/10142174_2.html

If US Airways were to begin methodically changing their operation and reinvent themselves, how do you think they could pull it off?

My feeling is that rather than being reactive, to LCC's they should become a proactive airline , and enter a market that exhibits extremely high airfares, that is underserved, and start a fresh operation. Begin weaning themselves from dependence on high cost hub operations, and begin a policy of
non traditional service as is exhibited by B6, WN, & HP.
Additonally I don't believe they should start a so called LCC within their airline.
Stay as US Airways, but instead of reacting to a LCC entering their turf, enter
a turf with action in place to discourage another LCC from entering theib back yard, and etner that market with reasonable fares, gaining customer loyalty for doing that. (kinda like B6 did at JFK) What do others think about US Airways re-inventing themselves....?

38 replies: All unread, showing first 25:
 
User currently offlineSsides From United States of America, joined Feb 2001, 4059 posts, RR: 21
Reply 1, posted (10 years 5 months 3 weeks 4 days 22 hours ago) and read 3310 times:

enter a market that exhibits extremely high airfares, that is underserved

What markets do you have in mind? When I think of underserved markets, I think of markets that have either (1) high airfares because their "underserved" status means a low supply of flights, or (2) low yields because demand is not significant.

In case (1), market entry would produce lower airfares (and yields) due to an increase in supply. Case (2) might be slightly more viable in the sense that USAirways could try to build more customer loyalty, but it would be very difficult for them to generate revenues in such a market.

I don't think USAirways will be able to "reinvent" themselves. My prediction is that they will liquidate by the end of 2004, with AA taking over shuttle operations and JetBlue possibly picking up some of their Airbus aircraft on the cheap. No one really knows, but I think that it's time for a legacy carrier to fold. The market's simply not there.



"Lose" is not spelled with two o's!!!!
User currently offlineSunValley From , joined Dec 1969, posts, RR:
Reply 2, posted (10 years 5 months 3 weeks 4 days 22 hours ago) and read 3287 times:

Sside, you probably sais the same about HP

User currently offlineNIKV69 From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 5 months 3 weeks 4 days 21 hours ago) and read 3208 times:

I don't think they can survive, they have alot of debt and JetBlue and WN is just killing them. I hate to see airlines fail but looks like the end is near.

User currently offlineCloud4000 From United States of America, joined Dec 2003, 641 posts, RR: 0
Reply 4, posted (10 years 5 months 3 weeks 4 days 21 hours ago) and read 3161 times:

The problem with US is their concentration east of the Mississippi. Not only is where most of the population is located, but it also it is the most competitive business wise, especially with LCCs like Air Tran, JetBlue, Southwest, etc.
I only see three options for US:

1) Become a LCC. Not another airline with airline, but completely transform themselves into a LCC. This will mean standardizing aircraft, rationalizing the route structure, maybe get rid one or two of their hubs. Perhaps sell of their international routes.

2) Merge with another carrier. Consolidation is ripe for this industry. A US Air/HP or US Air/NW combination. Something that will expand its presence beyond the easter portion of the United States.

3) Liquidation.






Boston, USA
User currently offlineJeffrey1970 From United States of America, joined Apr 2001, 1336 posts, RR: 12
Reply 5, posted (10 years 5 months 3 weeks 4 days 20 hours ago) and read 3121 times:

SunValley,

I agree with what you are saying however I am not sure I would have thrown HP in with that group since they are a hub and spoke airline.

God bless through Jesus,

Jeff



God bless through Jesus, Jeff
User currently offlineDsuairptman From United States of America, joined Jul 2003, 892 posts, RR: 0
Reply 6, posted (10 years 5 months 3 weeks 4 days 20 hours ago) and read 3107 times:

One thing that will half to happen, and rather quickly is US cut throat unions giving into concessions (which is a pipe dream) giving serious cuts. The fly two many planes for the current system, and would have to expand to meet their seat capactiy, but the arrogant pilots don't want expansion, just no pay cuts, and less flying. BTW the pilots also wanted to keep all those mainline jets, but weren't enthused to fly them more. So you can see that US mgt will have to stop bowing to the pilots union (and probaly the others) before any sort of turn around could occur.

(Maybe Mesa or AC need to get the check book ready for former US planes)



GEAUX SAINTS!
User currently offlineSsides From United States of America, joined Feb 2001, 4059 posts, RR: 21
Reply 7, posted (10 years 5 months 3 weeks 4 days 20 hours ago) and read 3100 times:

SunValley --

I admit that I didn't think America West would be as successful as it has been, but that is simply comparing apples and oranges. HP and US serve very different regions of the country -- the primary difference is that HP's main markets (PHX, LAS) are growing rapidly, while many key US markets (primarily in the Northeast -- PIT, PHL, etc.) are shrinking. In addition, in its turnaround, HP followed advice that is just the opposite of what you are suggesting -- they pretty much became an LCC. I don't see USAirways doing this, nor do I see them making it.



"Lose" is not spelled with two o's!!!!
User currently offlinePVD757 From United States of America, joined Aug 2003, 3411 posts, RR: 17
Reply 8, posted (10 years 5 months 3 weeks 4 days 7 hours ago) and read 2937 times:

The major problem with US becoming a LCC is the fact that they operate primairly east of the Mississippi. From DCA north, these are the most expensive airports to operate out of if you include the weather element. The revenue side of things is being diluted by the LCC invasion. I don't know how they could reinvent themselves and still be the airline that they currently see themselves. The only thing they could become is a regional player who feeds others. They have a great presence in the markets they operate in. The only problem is the distance flown and the type of aircraft they operate on those routes. If their flights are not full, the plane is being wasted in that market. The reason why HP and WN are successful when they go into these markets is that there are enough other markets that they operate in that are not as expensive. I think jetBlue gets by right now with innovation and the fact of they're still young. They have less labor costs associated with seniority and they have less maturation with their fleets.

User currently offlineSlamClick From United States of America, joined Nov 2003, 10062 posts, RR: 68
Reply 9, posted (10 years 5 months 3 weeks 4 days 6 hours ago) and read 2870 times:

From an outside point of view, NO they cannot re-invent themselves. That would imply that they had been "invented" in the first place and it does not appear to me that US management has any idea whatever who or what USAIRWAYS is.

They seem to have no discernible business plan other than reducing their payroll costs. If they were successful to the point of getting everyone to work for Federal minimum wage their seat-mile cost would still be high.

It appears to one industry cynic that Wolf and Siegel had just been hired to pre-digest the company to make the final days easier for the predators out there.




Happiness is not seeing another trite Ste. Maarten photo all week long.
User currently offlineUal727222 From United States of America, joined Dec 2003, 61 posts, RR: 0
Reply 10, posted (10 years 5 months 3 weeks 4 days 6 hours ago) and read 2823 times:

The question goes to whether a mature business model can be changed to create a new product. I recall the days when Braniff in the late 70s attempted to expand its product into many different markets and bought close to $1 billion in new aircraft, 727s and 747s to meet the anticipated yet never materialized increase in traffic. They spent billions on a lavish headquarters in Dallas and a hostess training facility, all the result of Harding Lawrence's visioning of Braniff as a chique, with it airline. The result was of course the eventual crippling of the airline. Howard Putman of Southwest was hired from SWA to "re-invent" it, but with almost no cash, the airline was DOA. A chapter 11 would not have been possible, as no financing would have been available for such a fruitless experiment, and it was effectively beyond the point of fixability. Employees' final paychecks bounced, and I recall the eerie sight of its entire fleet parked at DFW in May 1982, just after its demise.

Pan Am was cash drained as well, as was TWA in 2001 when AA bought it. A re-invention would not have worked. A re-invention of US is not possible in the judgment of this career pilot; the airline can fix its current model to be more profitable and efficient, but a new business model with the same name, culture, employees, leadership is a likely failure. I don't see it happening, and believe me, I would be distressed to see the airline go out of business.


User currently offlineThestooges From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 5 months 3 weeks 3 days 16 hours ago) and read 2684 times:

I think they should get rid of PIT and PHL, get rid of every single non-airbus in their fleet, get rid of the shuttle and focus on CLT and essentially become as much of a LCC as possible. Maybe even keep the CLT european routes if they are profitable and maybe even build up Latin American routes because they've already started to do that and CLT is in a geographically good position (obvioulsy not as good as MIA) to do this.

User currently offlinePVD757 From United States of America, joined Aug 2003, 3411 posts, RR: 17
Reply 12, posted (10 years 5 months 3 weeks 3 days 10 hours ago) and read 2605 times:

Getting rid of PHL would be very stupid. They have ownership of terminal A and F. They have the majority of their trans-atlantic traffic funneling through this airport. I would go for PIT and make it a focus city. They only have guarantees on ten gates now. They could unload all of the rest with no penalty. CLT isn't the only way to get to the Carribbean and Latin America. Check the schedules out of PHL. As far as becoming a LCC. They could not unless they expand towards the west. Right now, they operate in a very expensive environment. WN does well in the east because of their spread into other markets that are not high cost. This offsets the others that they are really paying for. jetblue does not have fleet issues or seniority issues yet. This will affect them in the long-run until they can spread into lower cost markets.

User currently offlineAA717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 13, posted (10 years 5 months 3 weeks 3 days 5 hours ago) and read 2531 times:

Thestooges--Ironically, you just described Piedmont!  Smile The unfortunate aspect of USAir is that they bought a couple of well-run, effecient airlines and absorbed them into a poorly-run, corpulent airline that fed on the high yield market in the N.E. That market doesn't exist any more.TC


FL450, M.85
User currently offlineHaveric From United States of America, joined Jan 2001, 1247 posts, RR: 4
Reply 14, posted (10 years 5 months 3 weeks 3 days 4 hours ago) and read 2511 times:

thestooges -- promise me you'll never become a CEO. PHL is about 4x the size of CLT. It is the 2nd largest city on the East Coast and has a gleaming new international and Express terminal.

IMHO, US needs to:
1. Continue to review work rules with the unions.
2. Outsource some heavy maitenance while instituting stringent Quality Control measures.
3. Review First Class -- put it on par with the competition
4. CLEAN CLEAN CLEAN aircraft, terminals, etc.
5. Rebuild a positive corporate identity with strong operations along the East Coast, to Europe / Carribbean, and (soon to be) membership in Star
6. Fight WN hard in Philly
7. (possibly the most important) inspire all employees -- a tall task indeed.


User currently offlineCloudboy From United States of America, joined Jan 2004, 807 posts, RR: 0
Reply 15, posted (10 years 5 months 3 weeks 3 days 3 hours ago) and read 2469 times:

What they need to do is stop focusing on becoming a low-cost operation! Everyone seems to be caught up in these low cost model. If everyone offers the same exact product, why not go with the lowest cost? What US (and all the majors, for that matter) need to do is focus on providing a better product. Forget the first class stuff - most companies will only pay for coach anyways. Focus on a better flight for business travelers - more room, better service, easier ticketing, more flexibility in ticket exchanges and more agents so you don't have to wait so long at the counter. A simple but decent bag lunch for flyers who don't have time to grab lunch on the way to their meeting. How about a business center at the airport for all travelers where you can go in and make a phone call or set up your laptop while you wait for your flight.

US will never compete as a low cost in the north east. As a service airline, maybe there is a market for them.



"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 16, posted (10 years 5 months 3 weeks 3 days 1 hour ago) and read 2419 times:

I know I've mentioned this a billion times, but here's how US could re-invent themselves, IMO...START FLYING THOSE A319's BOS-Europe/West Africa...BOS-Algiers, Casablanca, Tunis, Barcelona, Valencia, Bordeaux, Nice, Marseilles, Milan, Venice, Zurich, Geneva, Ljubljiana, Zagreb, Vienna, Dusseldorf, Hamburg, Berlin, Copenhagen, Brussels, Warsaw, Oslo, St. Petersburg, Prague, Reyjkavik, and just about any other similar-sized European city within the A319's range that I left out...throw in some significant feed with those brand-new E-170's into BOS, and you have 45-50 routes that Southwest, jetBlue, AirTran, Frontier, ATA, and Spirit can't (or won't) touch...further, base the E-170's at BOS, all of the other Airbuses out of PHL, the 733's and 767's out of CLT, the 734's and 757's out of PIT, and you've cut down on your maintenence costs significantly...other than that, well, I might need some time on the job...


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Reply 17, posted (10 years 5 months 3 weeks 3 days 1 hour ago) and read 2396 times:

BOS to Africa on US Airways?? I am delirious with laughter.

US Airways' days are numbered. It has always been a lousy airline and apart for a few quarters in 1998 and 1999, it never made money. US lost billions from 1990 to 1997, even after it bought Piedmont and PSA. The merger idea with UA was designed to sell it, not to make it better.

Bad airline. Poor route network (except of course if you live in PA or NC) and short-sighted management.

Let it fail. I always hated US Airways and their high fares. Good riddance.

Sorry for the employees though.

One thing though that they could do is merge with America West. They have similar fleets and could create a mega LCC with a true coast to coast network.



User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 18, posted (10 years 5 months 3 weeks 3 days ago) and read 2356 times:

ContinentalEWR-I'm talking about BOS-Algiers on an A-319...you're talking about filling maybe 100 seats on that for a profit...not a 762ER or an A-330...additionally, those E-170's jobs would be to provide feed to BOS for those flights...makes a heck of a lot more sense than to provide excess frequency domestically just to use those 279 planes required by the scope clause in the pilots contract...


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineWorldperks From , joined Dec 1969, posts, RR:
Reply 19, posted (10 years 5 months 3 weeks 3 days ago) and read 2336 times:

ContinentalEWR,

You may have struck upon something. Just in practical terms -- fleet commonality, management styles, perceived opportunity -- that's an idea whose time may have come.



[Edited 2004-02-08 22:38:36]

User currently offlineHaveric From United States of America, joined Jan 2001, 1247 posts, RR: 4
Reply 20, posted (10 years 5 months 3 weeks 2 days 23 hours ago) and read 2265 times:

SHUPirate -- do you really think that 100 people a day want to fly from BOS to Algiers? I mean, your hypothetical airline would have NO hub feed. Those destinations are rediculous.

ContinentalEWR -- your analysis would be more worthwhile if you removed your biased hatred of the airline that employees 29,000 people...


User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 21, posted (10 years 5 months 3 weeks 2 days 23 hours ago) and read 2248 times:

Haveric-What do you think I would have all of those E-170's doing...same thing Delta has their CRJ's doing at JFK...feeding Boston...in effect, BOS would be transformed into US Airways' fourth hub, with it becoming the transatlantic gateway for those routes without the demand for a 330 or a 767...obviously Boston itself couldn't support an A-319 from BOS to ALG, but combined with the feed from the rest of the US Airways network, I'd bet it could...


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineCloudboy From United States of America, joined Jan 2004, 807 posts, RR: 0
Reply 22, posted (10 years 5 months 3 weeks 2 days 20 hours ago) and read 2156 times:

Who would want to fly two hours in the US, have a two hour turn around (and a terminal change!) to a fly a 319 all the way from Boston to Algiers? Heck, can you even fly a 319 trans Atlantic, let alone from there to another continent?


"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
User currently offlineJGPH1A From , joined Dec 1969, posts, RR:
Reply 23, posted (10 years 5 months 3 weeks 2 days 11 hours ago) and read 2076 times:

I think the idea of flying A319's from BOS to secondary destinations in Europe has merit, especially if the connecting service is able to provide convenient and time-efficient service to other secondary cities in the US North East. Look at the range of cities served by CO from EWR, with 757's - places like BHX, LIS, EDI - OK EWR is a NY airport, and has monster O&D traffic, but I'm pretty sure CO couldn't make a go of them without a fair bit of connecting traffic too. If US could target cities not served yet by CO out of EWR, this would give them an advantage - places in France or Italy maybe (NCE, VCE, LYS, BOD), not served by their national carrier either. Secondary cities in Germany too, in conjunction with LH and Star Partners.

I'd certainly take a US 319 NCE-BOS (suits me down to the ground !), as long as the seating was a reasonable pitch for longhaul and it had good IFE (seatback, not flipdown). Something like AF's A319 service to outlandish oil destinations would work.

My one reservation might be that BOS is a pretty hideous airport to transfer through, especially international-domestic - changing terminals from E to anywhere else is not fun or simple. If US Airways could get a dedicated Immigration set up in Terminal B (AA could use it too), this would make life a lot easier. CO's big advantage with EWR is having their whole operation under one (very big) roof, so that transfers are not too ghastly.


User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 17
Reply 24, posted (10 years 5 months 3 weeks 2 days 10 hours ago) and read 2042 times:

Cloudboy-I chose the A319 for exactly that reason...range is not an issue...in fact, from BOS, the A-319 can reach most of Europe (part of the Balkans, and most of the former Soviet Union excluded...St. Petersburg and the Baltics are within reach) and northwest Africa (Casablanca, Algiers, and Tunis are all within reach)...use those E170's coming in as feed for those flights (although, I'm convinced, the real cash-cow would be for passengers coming into the US from those smaller cities that would be able to bypass MXP and CDG, and the shuttle would be GREAT for those passengers)...just to use an example, a passenger going from Tunis to Chicago would, currently, have to go Tunis-Casablanca-JFK on Royal Air Maroc, and then take a Delta CRappyJet from JFK to ORD...wouldn't it make things a heck of a lot easier for US Airways to provide A-319 service, through BOS, as their salvation?


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
25 Cloudboy : True, there would be some market, but I am not sure enough to be profitable on. When you get right down to it, most of the non-major cities in Europe
26 PVD757 : BOS is not, and will not be suited for anything even close to that type of operation. It is delay prone without having "banks" of flights now, which w
27 SHUPirate1 : PVD-how about then if they based the 319's at PHL then, and they could still reach all of those cities I mentioned except Tunis, Warsaw, and St. Peter
28 Haveric : Where is the gate space in Boston? Why shift all of your feed from Philadelphia where you just built a new international terminal? Why call it the Gat
29 Freshlove1 : From what I have heard USAirways will not drop PHL even if they have to sell things. PIT will be the first to go unless they get some great deal from
30 SHUPirate1 : Haveric: as far as the gate space in BOS, obviously that would be an immediate issue, although if Massport was informed by US Airways that they planne
31 PVD757 : SHU: on paper it sounds like an interesting idea. BOS has no room now, nor any room for any substantial growth (a few more gates here and there at bes
32 Elwood64151 : USAir need not reinvent the wheel, nor change from hub ops to p2p ops (WN). In fact, all USAirways need do is determine what they are actually trying
33 SHUPirate1 : All BOS-ALG flights aside, I do have a question...correct me if I am wrong, but there are two ways for an airline (or any other business) to turn arou
34 TomFoolery : I would venture to guess that US having a hub in PIT and major ops in PHL, one should be scaled back. I understand that PHL is the international hub a
35 SHUPirate1 : TomFoolery-You also forgot about LGA (about 2 hours northeast of PHL) which is US Airways largest non-hub airport in terms of departures (including ma
36 Howdy : US Airways has pretty good route network and assets like 219 gates at DCA. I think they can capitalize on these. There are still many routes where yie
37 Scottb : "if Massport was informed by US Airways that they planned to make BOS a hub of this magnitude, I'm sure Massport would be more than accommodating..."
38 Airways6max : They don't have the money to reinvent themselves. Maybe if Bill Gates donated some of his billions, but don't expect that to happen. US is heading dow
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