US Airways Offered $263.9 Million To Stay

[genejockey]

PA Gov. Rendell ready to raise bid to retain US Airways...
Friday, June 13, 2003
Pittsburgh Post-Gazette

Pennsylvania Gov. Ed Rendell says he is more optimistic about keeping US Airways at its hubs in Pittsburgh and Philadelphia.
The Democratic governor said in an interview yesterday both he and David Siegel, the airline''s chief executive officer, were encouraged by the results of a meeting Wednesday in Washington, D.C., that brought together state, local and airline officials to talk about the airline''s future.
At the meeting, Rendell offered the airline a $269.3 million package for its operations in the state, well short of the airline''s request for as much as $864 million. The state''s share of the package would be $23.5 million.
"I know that some people here say, ''Screw US Airways,'' let''s boot them out of here and we''ll find someone else to come in. Understand, nobody will put a hub in Pittsburgh," Rendell told a meeting of the American Bar Association last night. "You may get Southwest [Airlines] in here to do point-to-point, but nobody will put a hub in Pittsburgh.
One last component involved a new partnership between Beaver County Commissioner Dan Donatella and Washington County Commissioner John Bevec.
In signing the agreement, the Beaver and Washington commissioners pledged to pick up at least $22.5 million associated with the building of a new US Airways training center and reservations center. The deal was structured to provide something for everybody.
While the airline will dictate the ultimate location of either facility, the two commissioners already have an informal agreement about what will go where.
Donatella wants the proposed 50,000-square-foot reservations center in Beaver County, currently home to 5,000 airport employees, and wants to build it in the Hopewell Industrial Park, along Route 60.

 

[a320av8r]

"Bright eyes"?
I''ll bet you call y''uns hon too.

 

[CSSUP]

Pennsylvania Governor Rendell Appoints Team to Lead Negotiations with US Airways


HARRISBURG, Pa., June 17 /PRNewswire/ -- Pennsylvania Governor Edward G. Rendell today announced a team of Administration officials and representatives of Allegheny County and Philadelphia to lead negotiations with US Airways about the airline''s future in Pennsylvania. Governor Rendell said he hopes the negotiating teams will meet later this week.

The Pennsylvania Team will include:

-- John Estey, Chief of Staff to the Governor

-- Leslie Miller, General Counsel to the Governor

-- Roy Kienitz, Deputy Chief of Staff to the Governor

-- Sharon Daboin, Deputy Secretary of Aviation, Department of

Transportation

-- Jim Roddey, Allegheny County Executive

-- Kent George, Allegheny County Airport Authority

-- Jeffrey Letwin, Schnader Harrison Segal & Lewis

-- Paul Singer, Reed Smith

-- Chuck McCullough, Allegheny County

-- George Burrell, Deputy Mayor, City of Philadelphia

-- Romula Diaz Jr., City of Philadelphia Law Department

-- Charles Isdell, City of Philadelphia Department of Airports

In addition to the team members, Ari Strauss, a member of Congressman Tim Holden''s staff, will be invited to represent the Pennsylvania Congressional Delegation.

"We had a very productive meeting with US Airways officials in Washington, D.C., last week, and I am hopeful we can reach an understanding acceptable to all parties," Governor Rendell said.

Governor Rendell, Senators Arlen Specter and Rick Santorum, members of the Pennsylvania Congressional Delegation, Pittsburgh Mayor Tom Murphy and Allegheny County Executive Jim Roddey met with US Airways officials last week.

CONTACT: Kate Philips, Pennsylvania Office of the Governor, +1-717-783-1116.

SOURCE Pennsylvania Office of the Governor

CO: Pennsylvania Office of the Governor; US Airways; Pennsylvania Department of Transportation; Allegheny County Airport Authority; Schnader Harrison Segal & Lewis; Reed Smith; City of Philadelphia Law Department; City of Philadelphia Department of Airports

ST: Pennsylvania

SU: PER

Web site: http://www.state.pa.us

http://www.prnewswire.com

06/17/2003 14:21 EDT

 

[PITbull]

----------------
On 6/17/2003 1027 AM a320av8r wrote:

"Bright eyes"?
I''ll bet you call y''uns hon too.

----------------​

a320av8r,

Well, hon, Y''uns is actually my favorite word. I use it quite often, "bright eyes", and if I''m not mistaken, I think I invented the word.

 

[RowUnderDCA]

I still have a hard time believing that (if the facts are how the media are reporting them) PHL/PIT/PA can craft an incentive and disincentive program that will be LEGAL!

So, U gets a break at PHL for staying at PIT.... what about all the other airlines? Do they get a break at PHL for operating a hub at PIT? I was hoping that this was all new money from the PA taxpayers, but recent news coverage states that some of this is local (is it airport revenue?) Even more extreme, U gets punished by PHL for not operating according to PA''s satisfaction at PIT? How is this not regulating the airline industry?

In any case, I''m not sure that a state can create such a scheme to effect air service that wouldn''t violate the Airline Deregulation Act (not to mention the constitution). But presumably they have lawyers working on it.

It took Federal legislation to create the air service restrictions around DAL and DFW. Even then the DOT took the position that DFW could NOT prevent its carriers from serving DAL. Nor could DAL prevent DFW carriers serving DAL. Even though the ''incentive'' to only serve one or the other was contained in financial and business documents. I believe that DOT prevailed. That is why AMR and CAL did (or does) serve both DFW and DAL.

 

[PITbull]

----------------
On 6/17/2003 3:00:28 PM RowUnderDCA wrote:

I still have a hard time believing that (if the facts are how the media are reporting them) PHL/PIT/PA can craft an incentive and disincentive program that will be LEGAL!

So, U gets a break at PHL for staying at PIT.... what about all the other airlines? Do they get a break at PHL for operating a hub at PIT? I was hoping that this was all new money from the PA taxpayers, but recent news coverage states that some of this is local (is it airport revenue?) Even more extreme, U gets punished by PHL for not operating according to PA's satisfaction at PIT? How is this not regulating the airline industry?

In any case, I'm not sure that a state can create such a scheme to effect air service that wouldn't violate the Airline Deregulation Act (not to mention the constitution). But presumably they have lawyers working on it.

It took Federal legislation to create the air service restrictions around DAL and DFW. Even then the DOT took the position that DFW could NOT prevent its carriers from serving DAL. Nor could DAL prevent DFW carriers serving DAL. Even though the 'incentive' to only serve one or the other was contained in financial and business documents. I believe that DOT prevailed. That is why AMR and CAL did (or does) serve both DFW and DAL.

----------------​

Row,

That could be a good argument, but watch this....

Any airline can do the same thing and attempt to renegotiate their leases. But first, they have to go into BK to terminate their "good faith" contracts. Once they do that, if they have a strong presence at a particular airport, and have some leverage for NEGOTIATING, then they can "spark" a better deal. However, if the particular airline has minimal presence at a particular airport or very little, then negotiating a better deal or incentive to stay, would be much harder, as the other side has no interest if their is no consequence whether they stay or go to their region.

Quite a difference going on in pennsylavania with U.

With regard to U getting punished in PHL, that is called leverage. Is PIT not getting punished by agreeing to build an airport for U in the 90's, and U dances in and then out of BK and terminates all the leases to get better leverage? And then all the while telling PA that they would not do this, and thanx for all your assistance in helping us with the ATSB, blah, blah, blah? The playing field for negotiations just got evened off by bringing in PHL to this equation in my view, and obviously in the entire PA Delegation's view, as well.. Otherwise, PIT would be a waste land, and the Pennsylvania tax payors would have to pay for that "white elephant" U walked away from. And all because in BK they don't have to honor anything.

Regarding U and their negotiations...there is a lesson....

"You can screw some of the pople some of the time, but you can't screw all the people ALL of the time".