US Airways moves fast on new service Employees to help plan low-cost flights

November 06, 1997|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

US Airways announced yesterday that it has formed an employee task force to help plan its new low-cost, discount airline which is expected to be launched early next year.

"This is the single most important thing US Airways can do to protect and enhance our franchise," US Airways President Rakesh Gangwal said yesterday. "We will move with speed and diligence to put this competitive response in place."

Gangwal reiterated previous statements that Baltimore-Washington International Airport will play "a major role" in launching the low-cost operation, dubbed US2.

The Arlington, Va.-based carrier, which handles about 45 percent of the passengers at BWI, was able to move forth with plans for the low-cost division after its pilots last week approved a cost-cutting contract.

Because of its high costs, US Airways has been losing money in many markets where it has been forced to cut fares to compete with discount competitors such as Southwest Airlines and Delta Express.

The agreement with the pilots calls for the low-cost service to begin with 54 aircraft and account for up to 23 percent of the airline's flying hours.

Pilots with the least seniority will be assigned to the operation. Those selected will take a 24 percent pay cut, which the company said will be offset by increased flying hours and greater opportunities for promotions.

Under the agreement between the pilots and the company, the planned low-cost airline can fly anywhere in the contiguous 48 states as long as flights don't exceed 1,000 miles.

To compete with ValuJet, Southwest and Delta Express, however, flights between Florida and points east of the Mississippi River and St. Louis will be exempt from the 1,000-mile limit.

The task force will focus on every aspect of the new division, including its permanent name, routes, scheduling, style of service and maintenance.

Earlier this week, US Airways confirmed its order for up to 400 aircraft worth $14 billion from the European aircraft manufacturer, Airbus Industrie, and it said it would spend $300 million on an international and a new regional commuter terminal at Philadelphia International Airport. Those moves also had been contingent on the pilots approving a new contract.

US Airways shares rose 56.25 cents to to $48.375 yesterday.

Pub Date: 11/06/97

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