Out Of Bankruptcy, Perhaps Out Of Pittsburgh

US Airways, in a news release announcing its successful emergence from Chapter 11 bankruptcy protection, said it has informed Allegheny County that it will seek to renegotiate its leases at the airport and its related facilities because it did not assume their terms as part of the airline's reorganization.

The Arlington (VA) based airline has set an effective date of Jan. 5, 2004 to complete the renegotiations, which are aimed at reducing its operating costs at the airport. It did not disclose by how much the airline is looking to reduce those costs.

At the same time, US Airways said its new Pittsburgh-based regional airline, MidAtlantic Airways, should start taking delivery of regional jets in the fall of 2003 and begin operations in the fourth quarter.

The regional airline is expected to be an integral part of the restructured US Airways' operations.

However, it's not yet clear whether US Airways plans to pull the bulk of its mainline service out of Pittsburgh International, in favor of the regional jet service, rather than in addition to the regional operations.

"Our focus is more regional jet operations at Pittsburgh ... and finding ways to accommodate that goal," said David Castelveter, a US Airways spokesman.

"I'm not going to speculate on what will happen and what will not happen (beyond what's stated in the news release)."

US Airways CEO David Siegel said in the release that the airline is feeling the effects of the United States' war with Iraq and wants to put the airline in a better position to weather them, as well as the impact of the sour economy.

"As the industry continues to restructure and the focus of our operations at Pittsburgh shifts to accommodate more regional jets, we need the flexibility of renegotiating our leases at that airport and the broader campus of buildings," Siegel said.

Surprise, Surprise, Surprise

"We have had a strong relationship with the Pittsburgh community and, as I expressed to political leaders, we will be working closely with them to find ways to reduce our operating costs and utilize our facilities to best suit our business plan and operational needs.

"Allegheny County Chief Executive Jim Roddey (right) has long been a US Airways supporter and we look forward to working with him to find a mutually beneficial solution," Mr. Siegel said.

Margaret Philbin, Roddey's spokeswoman, said "the (lease renegotiation) action was unexpected," but the executive and the Allegheny County Airport Authority, which operates Pittsburgh International, were working to address it.

"Mr. Roddey expects to sit down with the chairman of US Airways within a few days," Ms. Philbin said. "He and the Airport Authority will immediately begin negotiations with the airline to do everything possible to ensure Pittsburgh remains an important part of their strategic plan."

US Airways is Pittsburgh International's dominant carrier and, with more than 7,700 local employees, is one of Western Pennsylvania's largest employers.

FMI: www.usairways.com