US Airways Accelerates Business Model Transformation USairways.com, 6/12/2008 (excerpted) US Airways today announced that it is making additional domestic capacity reductions, reducing headcount and implementing several new revenue initiatives to help expedite the airline's return to sustained profitability in this new and challenging environment. Major changes and initiatives announced today include: Capacity Reductions In response to the sustained surge in record high fuel prices, the airline will reduce its fourth quarter domestic mainline capacity by six to eight percent on a year-over-year basis. The airline had previously planned a two to four percent decrease in domestic mainline capacity in its fourth quarter 2008. Domestic mainline capacity for 2009 is planned to be reduced seven to nine percent from 2008 levels. The airline is taking the following steps to achieve its capacity reduction goal: Fleet Reduction: The reduced flying is accomplished by returning 10 aircraft to lessors and canceling deliveries of two additional aircraft in early 2009. Aircraft coming out of the fleet include the return of six Boeing 737-300 aircraft by the end of 2008, four Airbus A320 aircraft in the first half of 2009, and the cancellation of leases of two A330-200 wide-body aircraft that had been scheduled for delivery in the second quarter of 2009. The airline is also planning to reduce additional aircraft in 2009 and 2010. Las Vegas Flight Reduction: Effective Sept. 3, the airline's Las Vegas night operation will be closed, except for limited night service to the East Coast. Overall, daily departures from Las Vegas, which were as high as 141 during Sept. 2007, will drop to 81 with the Sept. 3, 2008 schedule change. The airline's Las Vegas daily departures will drop further to approximately 74 by the end of 2008 as aircraft are retired from the fleet. Employee Reduction: The reduced flying will require approximately 1,700 fewer positions across the airline's system including roughly 300 pilots, 400 flight attendants, 800 airport employees and 200 staff and management. For front line employees, the staffing reduction is expected to be handled through attrition throughout the summer. Any necessary furloughs following the summer travel season will be offset as much as possible by voluntary leaves of absence as permitted by the respective labor contracts. Additional Cost Savings Measures: The airline announced plans to close the US Airways Clubs in the Baltimore / Washington International Airport and the Raleigh-Durham International Airport effective Aug. 6, 2008. In addition, the airline will no longer offer arrivals lounges in Munich, Rome, and Zurich. Revenue Growth and Fee Initiatives The airline's new revenue streams and fees will be generated through the following initiatives. First-Checked-Bag Fee: The airline announced plans to implement a first-checked-bag service fee of $15. The new fee goes into effect for tickets booked on or after July 9, 2008, and will apply to all flights within the U.S., to/from Canada, Latin America, and the Caribbean. The airline will waive the fee for its most frequent customers including: all Dividend Miles Preferred members (Silver, Gold, Platinum and Chairman's Preferred), confirmed First Class and Envoy passengers at time of check in, and Star Alliance Silver and Gold status members. The following customers will also be exempt from paying the fee: military personnel on active duty, unaccompanied minors and passengers checking assistive devices. In-Flight Beverage Purchase Program: In addition to current sales of alcoholic beverages on all domestic flights, US Airways will begin selling all non-alcoholic beverages (including sodas, juices, bottled water and coffee) in its domestic coach cabins for $2 effective Aug. 1, 2008. Alcoholic beverages will be available for $7 (currently $5). More details will be forthcoming and will include new premium beverage and hearty snack choices. Complimentary beverages will continue to be served in domestic First Class, US Airways Shuttle flights, trans-Atlantic Envoy and trans-Atlantic economy class. Unaccompanied minors will also receive complimentary non-alcoholic beverages. Call Center Ticket Fees: US Airways has instituted a $25 service fee for domestic tickets and a $35 service fee for international tickets purchased through its call center reservations line (previous domestic and international ticketing service fee was $15). Tickets purchased at airport / city ticket offices will be assessed a $35 (domestic) and $45 (International) service fee. Prior to this change, the airport / city ticket office service fee (domestic and international) was $20. Dividend Miles Changes: A new award redemption processing fee will be assessed to all Dividend Miles award tickets issued on/after Aug. 6, 2008. The fee will be based on destination ($25 for domestic/Canada tickets, $35 for tickets to Mexico / Caribbean, and $50 for Hawaii / international). US Airways is also eliminating its bonus miles program for Preferred status Dividend Miles members. Preferred members currently receive mileage bonuses based on their status level. The Preferred bonus program will be discontinued for tickets purchased on/after Aug. 6, 2008. The airline's frequent flyer program continues to be one of the best programs in the industry and presents the most generous upgrade opportunities. Dividend Miles Preferred members are eligible for unlimited complimentary upgrades up to seven days prior to departure versus five days, often accompanied by a fee, in other airlines' frequent flyer programs. Navigating the Present and Investing in the Future In addition to the capacity reduction, revenue growth and fee initiatives announced today, US Airways will maintain its focus on operational excellence and its investment in its Reliability, Convenience and Appearance program. Navigating the Present: US Airways will continue to invest in the operational turnaround initiatives that have vaulted the airline from the bottom of the Department of Transportation's (DOT) on- time performance charts in early / mid 2007 to industry-leading on-time performance. The DOT has ranked US Airways among the Top Three in on-time performance (among the ten largest U.S. airlines) for the past five consecutive months and number one in on-time performance (among the ten largest U.S. airlines) for the first quarter of 2008. The airline has also made substantial improvements in its baggage handling operations. According to DOT reports, US Airways has steadily improved over the past year to a better than industry average baggage handling performance in April 2008. Investing in the Future: Despite the industry challenges related to fuel and economic uncertainty, US Airways will maintain its previously stated commitment to its Reliability, Convenience and Appearance (RCA) initiative. While reducing its 2008 capital expenditures from $240 million to $225 million, the airline will continue to pursue all of its previously stated RCA programs, including cabin refurbishments, improved and additional check-in kiosks, airport club refurbishments, facility upgrades, new gate-reading technology and the completion of the airline's next-generation Web site. SOURCE: US Airways           Home | Business Travel | Demo Room | Reservations | Contact Us Travel Management Program | Groups & Meetings | Club Getaway ©1997-2008 Atlas Travel International. All rights reserved.