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Fri, Mar 06, 2009

US Airways Says It's Not Scared Of Southwest

Employee Asks If WN Debut At Logan Will Mean US Reductions

When Southwest Airlines expands into a new market, the economics of the business change. When the low-cost carrier initiated new service into Las Vegas and Pittsburgh, US Airways cut service. Now that airlines are already dropping flights to battle declining passenger traffic, will Southwest's debut at Boston's Logan International Airport this fall drive US Airways from that market, too?

The Boston Globe reports one US Airways employee actually summoned the nerve to raise that issue in the question-and-answer section of a corporate newsletter sent to employees. US Airways director of scheduling Glenn Martin provided the company's response.

"It is sometimes true that when Southwest enters a market, the economics change and flights that were profitable for US could become unprofitable," Martin replied. "However, the opposite has also occurred, and there have been times when Southwest entered into markets that US was serving and later pulled out completely, such as service to Hartford, Connecticut."

Regarding Logan, he added, "at this point, there are no plans to reduce the flight schedule."

US Airways has about 15 percent of the market at Logan International. Airport officials predict lower fares, but no service cuts by other airlines in response to Southwest's arrival.

US Airways CEO Doug Parker has also noted that the airline has cut its fleet almost to the minimum size allowed by its union contract with pilots... so the airline can't cut capacity much further if the economy continues its current flat spin.

FMI: www.usairways.com

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