US Airways Dividend Miles (Pre-FlightFund Merger) - Next Phase of Transformation Plan Unleashed

Wow! I am especially impressed with the increased utilization of the fleet. Sounds good all around . . .unless you are Pittsburgh.

Oh, and I realize we already have two postings on schedule changes, but this goes far beyond schedule changes.


US AIRWAYS IMPLEMENTS NEXT PHASE OF TRANSFORMATION PLAN, INTRODUCES CHANGES TO FEBRUARY 2005 SCHEDULE

New Schedule Improves Aircraft Utilization, Increases Flights and Redefines Hubs

ARLINGTON, Va., Oct. 18, 2004 -- US Airways today announced it will significantly restructure its flight schedule beginning Feb. 6, 2005, as the company continues implementing its Transformation Plan.

"With our February schedule, we will lay the groundwork for a complete overhaul of the US Airways business model, a design that uniquely combines the best business practices of both legacy and low-cost carriers," said B. Ben Baldanza, US Airways senior vice president of marketing and planning. "Improved aircraft utilization and changes to hub operations will allow us to operate approximately 230 more daily flights, the equivalent of adding 27 mainline airplanes and 15 regional jets (RJs) to our fleet at today's utilization levels, without acquiring additional aircraft."

Key elements of the new schedule, which assumes a fleet of 281 mainline aircraft and 169 RJs:

- Significant changes at Philadelphia, where traditional flight-connecting banks will be replaced by a "rolling" structure;
- The addition of two new flight-connecting banks in Charlotte, N.C., combined with significant capacity growth;
- The beginning of expanded operations to the Caribbean and Latin America from Fort Lauderdale/Hollywood International Airport, including four new destinations in the region added to the US Airways network;
- The redefinition of Ronald Reagan Washington National Airport, with new nonstop service to primary business destinations, complemented by the replacement of many turboprop flights with RJ service; and
- Increased productivity of aircraft and other assets closer to low-cost carrier (LCC) standards, brought about by better balancing the hub-and-spoke and point-to-point business models.

Philadelphia

US Airways' hub in Philadelphia will continue to serve as a primary connecting point in the Northeast and as a gateway to Europe, the Caribbean, and Latin America. Total departures from Philadelphia will increase to 495 each business day, or seven percent more than the November 2004 schedule, and 32 percent more than February 2004. Connecting arrival and departure banks also will be replaced by a steady flow of flights throughout the day. This is expected to relieve airfield delays and increase operational efficiency. Further, two new destinations will be added to the schedule, with 50-seat RJ flights to and from Wilmington, N.C., and Washington Dulles International Airport, operated by Mesa Airlines and PSA Airlines, respectively.

Charlotte

US Airways' largest hub will grow to 564 daily weekday departures (from the current 495) and by two departure and arrival banks, an increase of 100 daily flights as compared to the February 2004 schedule. Charlotte will continue as a modified hub-and-spoke system to maximize revenue and profitability. The current schedule includes eight flight-connecting banks.

Charlotte will continue to be US Airways' largest gateway to the Caribbean and Latin America, and transatlantic service to Frankfurt and London (Gatwick Airport) will continue as well. Service from Charlotte to Sarasota will be seasonally upgraded to Boeing 737 jets, replacing 50-and 70-seat RJs.

Ronald Reagan Washington National

New nonstop service will be added to six key business destinations, including Atlanta, Cleveland, Detroit, and Chicago (O'Hare) with four daily nonstop roundtrip flights each, as well as Dallas/Fort Worth and Houston (George Bush Intercontinental), with three daily nonstop roundtrip flights each. The new markets will feature the 72-seat Embraer 170 Regional Jet on most flights. Mainline jets will replace 50-seat RJ and 37-seat turboprop service on selected flights from Washington to Albany, Buffalo, Rochester and Syracuse, N.Y.; Columbus, Ohio; Indianapolis; Jacksonville, Fla.; Manchester, N.H.; and Raleigh, N.C., versus the February 2004 schedule. Departure levels will be unchanged in Washington versus February 2004, with seat capacity increasing by 40 percent to reflect the use of larger RJs and mainline aircraft.

"US Airways is already the leading airline at Reagan National, and with the new business markets and larger aircraft in our February schedule, we significantly increase our scope of service," said Baldanza. "The use of larger aircraft is consistent with the stimulated demand environment created by the launch of GoFares in the Washington market."

With the change, US Airways will provide nonstop service in 15 of Washington's 20 largest markets.

Fort Lauderdale/Hollywood

As previously announced, US Airways will expand service in Fort Lauderdale/Hollywood, Fla., on Feb. 13, 2005. Daily departures will increase from 27 this fall to 54, with the introduction of daily nonstop service to nine destinations in the Caribbean and Latin America, as well as six new nonstop destinations in the U.S. In February, US Airways will initiate service to Guatemala City, Guatemala; Panama City, Panama; Kingston, Jamaica; and San Salvador, El Salvador, all subject to foreign government approval. US Airways will also introduce nonstop daily flights to Key West, Fla., operated by PSA Airlines. Connections will be created in Fort Lauderdale/Hollywood for passengers traveling from the Northeast to points in Latin America and the Keys. US Airways' new low GoFares are available on all nonstop flights to and from Fort Lauderdale/Hollywood.

Pittsburgh

Pittsburgh continues to be an important part of the US Airways network. US Airways expects to operate approximately 229 daily departures to 67 destinations with the February schedule, including 28 of the top 30 markets for local travelers. As previously announced, a redesigned Pittsburgh schedule will take effect on Nov. 7, 2004. Currently, minimal changes are planned to the Pittsburgh schedule between November 2004 and February 2005. Depending on final network and schedule decisions made by non-owned affiliate carrier providers, the total departure count could vary slightly.

Boston and New York LaGuardia

Capacity from Boston and New York will increase by 36 and 12 percent, respectively. Capacity growth occurs as larger RJs and mainline equipment replace smaller, less efficient aircraft.

US Airways Shuttle

Shuttle flights currently operate hourly between New York LaGuardia, Boston Logan and Washington Reagan National. Beginning on Feb. 6, 2005, Shuttle flights between Washington and Boston will depart 45 minutes after the hour, rather than on the hour or half-hour. Shuttle service between New York and both Boston and Washington will continue to operate hourly on the hour. The new service pattern is another part of US Airways' overall plan to ensure increased efficiency through better aircraft utilization and airport staffing.

Transatlantic

US Airways will continue to offer nonstop service to its existing 11 destinations in Europe from its international gateways in Philadelphia and Charlotte. Overall Atlantic capacity is expected to remain unchanged in 2005.

Efficiency

The revised flight schedule will reduce aircraft turn times by 15 percent, in turn allowing mainline aircraft utilization to increase by ten percent and US Airways Express utilization to increase by five percent, versus February 2004. Mainline capacity for US Airways will increase by seven percent in February 2005 as compared to February 2004.

"Adoption of the Transformation Plan represents a turning point in the history of US Airways," Baldanza said. "By changing our core business model, US Airways will be better positioned to successfully compete in an aggressive competitive environment where declines in yields, growth of other low cost carriers, and record high fuel prices are expected."

-------------------------------------------------------------------------
To unsubscribe click here
http://www.shareholder.com/visitors/unsubscribe.cfm?companyID=u
-------------------------------------------------------------------------
service provided by Shareholder.com.

^ ^ ^ Sounds great. Hope they can make it work.

It is nice to see a plan that contains some elements other than cutting the employee's wages. It seems like people have talked about rolling or de-peaking PHL for years. I'm cautiously hopeful that this will finally make a difference. I'm also glad to see more banks in & out of CLT, which is a much better airport to connect through.

One would hope that a/c utilization could be increased by more than 10%, but its a start.

Has anyone seen project CASM numbers? I'd guess this might be worth about 1c.

What exactly is "rolling"? "de-peaking"?

What exactly is "rolling"? "de-peaking"?

Not the best explanation, but basically for a hub and spoke system, where the majority of passengers are connecting, ideally you'd like all of your flights to arrive around the same time, passengers get off their originating flights, walk to their connecting flights, board, and leave, hopefully within the hour. This allows you to fill a potentially smaller flights, because you have more flights landing there from which people can transfer from.

The problem with this is you have a TON of activity when all the planes are landing (baggage has to be transferred potentially among all other planes), plus you have air traffic when all the planes are trying to land and take off. The rest of the time, the airport gates sit relatively idle. You end up with 'peaks' of activity at some times and valleys at others. Imagine all the flights landing at 9am (with a wave of 10am departures), 12p for 1pm deptures, 3p for 4pm departures, and 6p for 7pm departures. From 10a-12p, 1p-3p, 4p-6p, and 7p on, not much activity.
De-peaking is designed to try to eliminate this. The downside I believe is that connecting times increase. For example, suppose your connecting flight still leaves at 1pm. With depeaking, your originating flight now is scheduled for a 11am arrival, not 12p. You land during a less busy time, but your layover is longer. Or now you land at 1pm (between taking off flights), meaning now you miss the 1pm departure, you need to wait for the 4pm one.


Jeff

:p :p :p :p :p

I posted a response about "abandoning ship" back in August when everything seemed doom & gloom for US Airways.

While their employees have taken a pounding...those who choose to stay are loyal to the company & their efforts will, I think, be rewarded by these changes.

I believed that with some time & a real change in model, U would survive - the changes above make me think this is possible and probable.

I have a trip to Europe in Dec that I booked on U and I will be booking my spring travel soon on U as well...they will come through this, I am sure!

Ideally, it will also mean that we don't have to wait in line on the taxiways for an hour at a time too.

A key benefit of a rolling hub for the airline is that individual aircraft should be able to turn around more quickly, resulting in a higher average utilization and lowering US Airways total cost.

Has anyone seen project CASM numbers? I'd guess this might be worth about 1c.

I'm going to guess a little lower than 1c, as its a year over year increase of 7% in "mainline capacity" according to press release, which I can only assume is the same as a 7% increase in ASMs. So flying 7% more ASMs with the same costs should make the new CASM (Old CASM/1.07). If their old CASM was 12 (can't remember what it is off the top of my head) that works out to about 11.2, and a .8c reduction. Throw in a potential small increase in costs associated with flying more (but not a 7% increase, just a small one) and I'd guess the result of this to reduce the CASM somewhere between .5 and .8c. If I'm off with anything please correct me.

The real question will be whether they can maintain their RASM and not let it drop much with increased capacity and reduced fares from Gophers. I think it will drop, whether it drops more than CASM drops is the question.

Best move in a long time. "Depeaking" has apparently worked well in Chicago for American. Also, if you read between the lines, it looks like full size planes are sneaking back onto routes they had been taken off. The big hurdle remains Philly. A lot of connections under an hour. I am continually amazed that they don't see fixing that place as an imperative for making any of these strategies work. It's a bit like trying to pacify Iraq without clearing out the Sunni Triangle. Good luck to them. I have tickets bought all the way to May.

The big hurdle remains Philly. A lot of connections under an hour. I am continually amazed that they don't see fixing that place as an imperative for making any of these strategies work.

You mean physically transporting people around the terminals? I definitely agree with this considering the expansion of the E70 fleet and continued usage of express carriers which keeps the F terminal busy. Making short connections between express and mainline flights is a workout at times. The F-C shuttle is good, however the F-AWest connectivity is seriously lacking but I'm not sure how they'd accomplish this well/easily.

-JC

Since my greatest use of the U is from LGA, I can only hope that the mainliners are actually put back on the routes that I take that seem to have overloaded the JungleJets. For example, the 420P ERJ nonstop from SDF will soon be supplemented by a 6P. Does it make sense to run two Embraers when a mainliner scheduled sometime in between those two would probably cost them less money with more capacity?
Let us hope that the plan takes this kind of thing into consideration and that it actually works to pull the U out of the hole. If it does, they have my business lock, stock, and barrel for next year.

While I wish them well, I can't really see the idea behind service from DCA to every major carrier's hub. Not a good idea to pick fights with those stronger than you...

While I wish them well, I can't really see the idea behind service from DCA to every major carrier's hub. Not a good idea to pick fights with those stronger than you...

With a lower CASM than the rest of the legacy carriers they will be able to effectively compete on these runs.

I disagree Alpha Golf. I think it is about time US Airways became agressive in the market instead of rolling over on it's back. Especially some markets where there is no one to compete with.

Especially with the E170. The crew are on RJ pay or something close to it.

With a lower CASM than the rest of the legacy carriers they will be able to effectively compete on these runs.

The problem with this is you have a TON of activity when all the planes are landing (baggage has to be transferred potentially among all other planes), plus you have air traffic when all the planes are trying to land and take off. ... You land during a less busy time, but your layover is longer. Or now you land at 1pm (between taking off flights), meaning now you miss the 1pm departure, you need to wait for the 4pm one.



not only does this improve efficiency for use of airline resources, it means that there are fewer annoying unplanned delays from the stacking, there is more slack in the system for weather ground delays, and... there is time to use the US club, airport dining and shopping, t-mobile hotspots... and simply relax a bit - or work a bit - between flights.

total travel time might go up. but, the likelihood of dealing w/ last minute plan changes due to missed connection should go down. if one can avoid running through airports to make connections, and have more predictable arrival, and maybe eat/relax/shop/work during the longer connection... seems like a good tradeoff for me.

seems like it will reduce stress by reducing the running through the airport and increasing the likelihood of final arrival through a connection more predictable, because there is slack in the connection schedule... running from F to A-west at PHL when the CMH-PHL is late... even if they are allegedly (unofficially) holding the PHL-DCA connection for the 14 people making the run... is no fun!

Now that I have had time to think about it for a while, this is really the first time I have seen from US a plan that looks like it just might pull the fat out of the fire for them.

Their plan to increase capacity in February is IMHO, the only chance that they have to survive. Since they have contracted with the pilots for increased productivity, the best thing that they can do is to take full advantage of it by using them hard and extracting every last ounce of productivity that they can get.

Using the rolling hub method and concentrating more on the strong O&D locations in their system (such as LGA & DCA) makes a lot of sense to me. With careful execution and lots of good luck, we just might be flying on a recovering airline at this time next year. If HP can do it, maybe the U can pull it off also.

Now that I have had time to think about it for a while, this is really the first time I have seen from US a plan that looks like it just might pull the fat out of the fire for them.

Their plan to increase capacity in February is IMHO, the only chance that they have to survive. Since they have contracted with the pilots for increased productivity, the best thing that they can do is to take full advantage of it by using them hard and extracting every last ounce of productivity that they can get.

Using the rolling hub method and concentrating more on the strong O&D locations in their system (such as LGA & DCA) makes a lot of sense to me. With careful execution and lots of good luck, we just might be flying on a recovering airline at this time next year. If HP can do it, maybe the U can pull it off also.


I like the plan too but it takes time to build a customer base for the new flights. I hope there is enough time.



Jay, aka 1095