Pit's Future

[wnfan37]

Saw this clip from a PIT paper...

"US Airways has threatened to shut down its Pittsburgh hub unless airport debt costs are lowered, but that appears unlikely given that US Airways Chief Executive Officer David Siegel has promised U.S. Sen. Rick Santorum , R-Pa., that the airline would maintain existing Pittsburgh service levels through Labor Day."

Sounds like PIT will be OK until at least Labor Day... does anyone think that's odd to promise a senator one thing, but threaten to pull by Jan. 5? I want US employees to maintain employment for the long term in PIT, but I'm puzzled by a seemingly mixed message from Siegel to Santorum and the Allegheny County Airport Authority. All politics as usual?

 

[USA320Pilot]

The delay in negotiating a deal with the ACAA over the Pittsburgh hub, training facilities, Greentree Reservation Facility, RIDC Park West, the hangars, and other facilities is due to United's continued formal reorganization delays.

The Pittsburgh hub negotiations are being held hostage to United's exit financing and a potential corporate transaction between the business partners.

If the ACAA, Allegheny County Chief Executive-elect Dan Onorato, and Governor Ed Rendell were smart, they would strike an accord to keep the airline in Pittsburgh (if US Airways truly wants a deal at this time -- which Siegel may not due to unfolding events in Chicago), then I believe it would be in the best interest of the government leaders to strike a deal with the Arlington-based company that would permit US Airways-MDA to mimic Delta-Comair in Cincinnati.

Regards,

Chip

 

[cavalier]

Chip why don't you phone all the political leaders involved in this mess and explain who you are and what they are doing wrong, and what they must do, then maybe they will come to their senses.

 

[Bear96]

The delay ... is due to United's continued formal reorganization delays.

Oh lordy, you're still stuck on that?

Shall we review yet again?

Dec. 9, 2002: UA enters Chapter 11, saying they expect to take about 18 months to emerge.

Dec. 9, 2002 plus 18 months = May, 2004.

One year on, UA has been recently saying they expect to emerge around May, 2004.

I know you will do anything-- ANYTHING-- to portray UA in the most negative light possible, and I know that a lot of people fall for the old trick of "If you repeat it often enough people will start to believe it," but...

Please explain how this is a 'delay?'

 

[PITbull]

Chip,

If your premise were truly the case, then following your logic, it would not behoove PA Delegation to waste their time at present. If U is waiting for United to exit BK (which they will do when they are good and ready) then it makes no difference what PA Delegation attempts to put on the table. Dave and gang have already made up their minds whether to stay or go. I believe they are here to stay, United or no United. I don't believe desperation efforts are necessary at all, specifically now.I believe Dave asked for the extention because all of their efforts has to be in changing the business model to accomodate fierce competition with SW. I also believe, Bronner has given this management an ultimatum.

I think with all the Chaos in PHL and with the soon presence of SW coming into our Turf, U needs PIT just for flow to divert some traffic to our neck of the woods, and MDA needs to be housed as well. And you and I both know its not in PHL. Besides, United already has TED, so what would United do with MDA?

 

[Bear96]

... Besides, United already has TED, so what would United do with MDA?

Here's my theory.

If ACA goes ahead and becomes independent, UA will be looking for a new UAX carrier at IAD: An airport looking for an airline.

Meanwhile, just up the road, by that time PIT and ACAA will be trying to get rid of U and MDA: An airline looking for an airport.

So look for MDA to pack up shop, move to IAD, and become the IAD UAX carrier.

Problems solved!

 

[linemech]

Saw this clip from a PIT paper...

"US Airways has threatened to shut down its Pittsburgh hub unless airport debt costs are lowered, but that appears unlikely given that US Airways Chief Executive Officer David Siegel has promised U.S. Sen. Rick Santorum , R-Pa., that the airline would maintain existing Pittsburgh service levels through Labor Day."

Sounds like PIT will be OK until at least Labor Day... does anyone think that's odd to promise a senator one thing, but threaten to pull by Jan. 5? I want US employees to maintain employment for the long term in PIT, but I'm puzzled by a seemingly mixed message from Siegel to Santorum and the Allegheny County Airport Authority. All politics as usual?

Usairways spokesman also informed the Pittsburgh Press that although Mr. Siegel did make that promise to Senator Santorum, he is not legally bound to keep his word. So to say that it seems unlikely that Usairways will shutdown it's PIT hub only on a promise made by Mr. Siegel is a long shot at best.
It would be nice to see PIT remain a hub, but I will not allow my hopes to ride on the word of Mr. Siegel. Mixed messages seem to be the norm from Mr. Siegel and company. :down:

 

[USA320Pilot]

Pitbull:

US Airways must continue its incremental effort(s) to lower costs and increase revenue to enable RASM to be greater than CASM. One area to focus on is airport costs where Pittsburgh’s passenger processing fee is more than 6 times grater than a similar type hub in Charlotte.

Pittsburgh's problem is the hub only needs about 3 million more people living nearby to provide higher revenue, but with this likely to not occur in the near-term, the only other option is to cut its costs or the company could move westward where hub operations could become available in the future.

Dave Siegel will not have true leverage to force the Pennsylvania government leaders to provide relief unless he has a viable exit strategy where the company could actually move from Pittsburgh with a viable business plan. The Pittsburgh negotiations are more than the Hub, it's also about fixed facilities that may be of no use to the combined business entity due to a corporate transaction, e.g. Carnot, the Beaver Grade Road Training facility, the Flaugherty Run Road Simulator Building, RIDC Park West, the Greentree Reservations facility, the catering complex, the maintenance facility, and even the vending machines, etc.

The leases on all of these facilities were rejected and could be excess to a combined business entity if US Airways enters into a likely corporate transaction, which members of the executive suite have privately said is inevitable.

Regardless, a source close to the US Airways’ executive suite is the person who told me that the Pittsburgh negotiations are being held hostage to United's exit financing – or should I say United’s inability to obtain exit financing due to the company being unable to provide a plan of reorganization to the court due to its major problems.

In my opinion, once United's murky situation becomes more in focus, then we will see progress on the Pittsburgh negotiations one way or another. That’s why US Airways’ request to have the current lease be extended to October 2004 is simply a tactic used to buy more time for external events to unfold and to prevent the 20% fee hike. However, Kent George and Jim Roddey are dead wrong in their analysis that it’s unlikely US Airways could leave Pittsburgh and it is in Pennsylvania's best interest to cut a deal now. If there is one thing I do know about Dave Siegel is that he can be vindictive if he does not get his way (just ask the Allegheny, Piedmont, and Midway pilots) and he just may exit Pittsburgh due to the ACAA playing hardball by rejecting the company's offer to extend the cancellation date until October.

US Airways does want to stay in Pittsburgh and would like to create an operation similar in scope to Delta-Comair in Cincinnatti, but the company has no interest in doing that without reductions in the airport debt.

Thus, if the ACAA is smart, they would cut a deal now to keep the current mainline operation in place and permit MDA/other RJ expansion in Pittsburgh, versus putting the operation at risk when US Airways obtains leverage to move its assets to places westward.

Regards,

Chip

 

[linemech]

If there is one thing I do know about Dave Siegel is that he can be vindictive if he does not get his way.

The mark of a true leader, Tell me why it can't be done, then show me how to be vindictive when you don't get your way.
I'll bet all through history those would have been the qualities of men and women honored with the title "LEADER".
No wonder the employees of Usairways have so little faith in thier leadership. :down:

 

[ClueByFour]

Little Dave can be as vindictive as he wants--he has nowhere else to go. There is no unhubbed city left with PIT's O&D, and the loss of the monopoly pricing power in PIT would cripple U's revenues.

While I have explained in post's past why U won't be getting anywhere near ORD in this life or the next, let's assume it happens. You abandon a hub with relatively weak O&D, but one that offers unlimited operational explansion and almost no operational difficulties in the form of congestion, runway configs, etc and move to a hub with strong O&D, but that is an operational nightmare and has the world's largest airline as the incumbent resident. To a metro area with one of the largest LCC presences in the country.

Do you really think an airline once again on the brink financially and whose current management has not demonstrated enough operational acumen to shave without cutting their own ear off is going to be able to make such a move work?

In related news, I sat next to Dorothy, across the aisle from little Dave, and in front of our friend from Alabama on a recent flight from PIT to Oz with a stop in ORD. Did not see Dave or Dave talking with the LGA based crew during the stopover, although I did not see Dorothy during that time.....

 

[Light Years]

Well I'm a friend of Dorothy and she says Crystal City is not all its cracked up to be- just a bunch of munchkins and evil witches.

 

[Twicebaked]

So look for MDA to pack up shop, move to IAD, and become the IAD UAX carrier.



Sorry, it ain't gonha happen!!!!!

 

[delldude]

with concerns about the possibility of not making the june POR target...where in the hell is U going to come up with the cash to move and/or relocate the PIT hub?
now who has who by the stones?

 

[USA320Pilot]

US Airways has options to move the Pittsburgh hub and close/move all of its supporting facilities. In addition, the company can secure the financial resources to do so, therefore, in my opinion, the ACAA should not call Siegel's bluff and should act sooner than later to secure US Airways' future in Pittsburgh.

The ACAA made a mistake in not accepting US Airways' offer to extend the current agreement until October.

Regards,

Chip

 

[Bear96]

So look for MDA to pack up shop, move to IAD, and become the IAD UAX carrier.



Sorry, it ain't gonha happen!!!!!

Well I will admit it is far from likely. But if it does happen, remember you heard it here first!

In any case, I am wondering where you think the flaws in my thinking are? I know it is based on a lot of 'ifs' but some of those 'ifs' are fairly likely. So I am curious why you think it is such a far-fetched idea?