US Airways Dividend Miles (Pre-FlightFund Merger) - Consolidation of Allegheny and Piedmont Express Operations

Just received the following press release in my in box.
---------------
US AIRWAYS GROUP, INC. TO CONSOLIDATE PIEDMONT AND ALLEGHENY AIRLINE OPERATIONS


ARLINGTON, Va., Jan. 14, 2004 -- US Airways Group, Inc. announced today that it will consolidate the operations of two of its wholly owned subsidiaries, Allegheny Airlines Inc., and Piedmont Airlines Inc., with a target effective date of March 31, 2004.


As part of the transaction, Piedmont Airlines will operate the entire de Havilland Dash-8 fleet. Allegheny and Piedmont currently operate 82 Dash-8s, with 41 flown by Allegheny and 41 flown by Piedmont, but the Dash-8 fleet size will likely decrease as more regional jets are brought into the US Airways Express network.


"We have an ongoing review of every aspect of our business to find ways to operate more efficiently and compete more effectively, and the consolidation of these two carriers will optimize the assets of both companies," said Bruce Ashby, president of US Airways Express. "Turboprop aircraft will still have a role in our network, but it is inefficient to have two wholly owned Dash-8 operators with duplicative overhead functions for a shrinking part of the company. We believe it provides the best outcome for our employees."


Members of the US Airways Express management are meeting today with representatives of the respective organized labor groups for Allegheny and Piedmont to share details of the proposed consolidation.


The preferred option is to merge Allegheny into Piedmont, allowing for the orderly transition of the Allegheny employees into Piedmont.


The other and less-preferred option would be a partial asset transfer to Piedmont, the liquidation of the remaining Allegheny assets, and the shutdown of the Allegheny operation. Ashby said this option can be avoided through the timely conclusion of labor agreements about representation and work rules.


"Our focus is going to be on the orderly consolidation of the two carriers, because that is clearly in the best interest of our employees, customers and shareholders. The timeline is short because we believe it is best to resolve issues quickly so that our employees have a clear understanding of what the future holds for them," said Ashby.




------------------
A "Mileage Run"... is that what they're called? I've been doing them for years and didn't know they had a name.

Hopefully this is a good sign that US is trying to work smarter and not harder. Could this possibly be early fruit from the labor/management discussions?

WOW. I haven't been on the east coast in decades, and this reminds me when US was Allegany Air out of BUF. We used to call it AGONY Air. What a flashback.

This is just going to make it easier for Mesa Airlines to aquire the entire US Express fleet when USAir goes under. Seems that Mesa wants to aquire someone, since Atlantic Coast is a no-go they have now said they would purchase all US Express carriers if it came to that, deploying them for HP and UA.

Mesa has said (repeatedly) that their preference is to fly under the US Express banner and not aquire.


I'm glad US is consolodating these two wholly owned. Of course now we will have the usual labor issues (seniority, etc.) but it was clearly a stupid scenario to have two divisions of wholly owned express carriers flying the same planes (Dash 8's) and yet have two pilot groups, two FA groups, not to mention two sets of management and union reps. No wonder these guys are bleeding cash.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by geo1005:
Mesa has said (repeatedly) that their preference is to fly under the US Express banner and not aquire.</font>

If Mesa were to buy any assets, they wouldn't touch Dash-8s... they would only take RJs.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">[/B]
I'm glad US is consolodating these two wholly owned. Of course now we will have the usual labor issues (seniority, etc.) but it was clearly a stupid scenario to have two divisions of wholly owned express carriers flying the same planes (Dash 8's) and yet have two pilot groups, two FA groups, not to mention two sets of management and union reps. No wonder these guys are bleeding cash.[/B]</font>

Aren't these two entities still remnants of the PI/US merger in '87? Allegheny was the original Allegheny Commuter, Piedmont was originally Henson (and probably one or two others) of the Piedmont Commuter system. So, this basically means they have had this split system running since the merger. No wonder they have always had a higher cost per mile.

------------------
A "Mileage Run"... is that what they're called? I've been doing them for years and didn't know they had a name.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by jimcfsus:
Aren't these two entities still remnants of the PI/US merger in '87? </font>


Yup. If after 20 years the labor contracts dictate you STILL have to run these as separate entities, there is no wonder US can't make money.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by geo1005:
Mesa has said (repeatedly) that their preference is to fly under the US Express banner and not aquire.


</font>

Ornstein (MESA AIR) said he would consider acquiring US Airways' regional carriers -- Piedmont Airlines Inc., Allegheny Airlines and PSA Airlines Inc. -- which currently operate as US Airways Express, but declined to say what other assets he might be interested in.

PSA operates seven regional jets and turboprops, while Piedmont and Allegheny operate turboprops exclusively. The regionals could be used to serve other Mesa partners, such as United Airlines and America West Airlines, Ornstein said.

"It is our hope that US Airways doesn't have to sell any assets and that they can profitably operate all of the assets they are considering selling," he said. "But if that's not the case, we stand ready to do what is necessary that is in the mutual interest of Mesa and US Airways.


Taken from the Charlotte Observer.