Here's a twist....
American may bid for US Air shuttle Slots at East Coast airports
could be sold by struggling carrier
CST on Thursday, January 8, 2004 By ERIC TORBENSON / The
Dallas Morning News
If US Airways Group Inc.'s East Coast shuttle is up for sale,
American Airlines Inc. could be a likely bidder. "American would make
the most out of the shuttle of any airline," said Ray Neidl, an
analyst who closely follows the airline industry at Blaylock &
Partners, a New York-based investment firm. "It would tie in better
with American's network."
Speculation about the US Airways shuttle grew Thursday following
media reports that the carrier needs to sell its assets to raise
cash. Among the routes that could be sold are shuttle operations
between New York, Boston and Washington, the reports said.
The flights cater to business travelers, considered American's bread-
and-butter market. Increasingly, the world's largest carrier is
finding its crucial East Coast franchise under attack by low-cost
discounters such as JetBlue Airways Corp.
American will always evaluate "opportunities that come up," said
spokesman Roger Frizzell. He wouldn't comment on the carrier's
interest in US Airways' shuttle.
US Airways declined comment Thursday on the reports, which appeared
first in The New York Times and were later confirmed by the Reuters
The carrier, based in Arlington, Va., emerged from bankruptcy
protection last year but faces an onslaught of discount competition.
In May, Dallas-based Southwest Airlines Co. will start service to
Philadelphia, US Airways' most profitable city.
US Airways spokesman David Castelveter wouldn't say whether its
shuttle operation is profitable.
Fort Worth-based American has sought the shuttle operation before,
bidding $300 million for it in 1997.
But US Airways, which then owned a 47 percent stake in the shuttle,
bought out the entire operation from a consortium of banks.
American won a $10 million fee in the bidding war.
An opportunity to own the shuttle arose again in 2001 when United
Airlines Inc. tried to merge with US Airways. To appease antitrust
regulators, United agreed to sell American partial ownership of the
That deal fell apart in July 2001, keeping US Airways in the shuttle
The near-hourly flights between the three key business cities have
been profitable in the past, but there's plenty of competition these
days for those fliers.
Delta Air Lines Inc. has its own shuttle operations, and American
parent AMR Corp. began flying regional jets in a shuttle operation in
2002 with its wholly owned American Eagle arm. American officials
have said they're pleased with early results.
Declining business travel and alternatives such as trains or driving
have dented many short-haul business air routes.
Prospects for a deal between American and US Airways will largely
hinge on price, Mr. Neidl said, noting that no carrier is flush with
American has improved its cash balance in the last year, and while it
has $3 billion in the bank, it's struggling to pay off $22 billion in
Other airlines would probably bid for the shuttle assets, Mr. Neidl
said, even though "there's more than enough capacity on the shuttle
At least one American union likes the idea of a deal with US Airways.
"We would welcome any new flying opportunities," said George Price, a
spokesman for the Association of Professional Flight Attendants,
which has 5,700 members on furlough who would welcome the chance to
come back to work.
The reports Thursday suggested US Airways wouldn't sell aircraft or
employees, but would part with landing slots at congested facilities
such as New York's LaGuardia Airport and Washington's Reagan National
American has 28 MD
-80s in storage that it's preparing to put back
into service as early as the middle of this year, according to a
planning report the carrier presented to its unions in October.
American plans about 6 percent more capacity to its schedule this
year. Much of that growth will come at its major hubs, Chicago's
O'Hare International Airport and Dallas/Fort Worth International