USAir to Cancel Its Service to Orange County

USAir, victimized by the recession, a bruising West Coast fare war and soaring aviation-fuel costs, said Friday that it will cancel service to Orange County and seven other West Coast airports in an effort to pare costs.

As part of the retrenchment, the Phoenix-based carrier said it will terminate 22 daily flights between John Wayne Airport and the Bay Area, Sacramento and Phoenix as of May 2. The airline now provides more service to Orange County than any other carrier.

The move effectively undoes USAir’s 1986 purchase of Pacific Southwest Airlines and comes two weeks after a bruised American Airlines all but pulled out of California’s north-south corridor. As part of that decision, American canceled five flights from John Wayne to San Francisco.

With the cutbacks, air fares in the corridor--currently as low as $20 one way--are expected to rise. “Fares will go up, although I will be appalled to see” a rise in business fares, said Joe Brancatelli, editor of Frequent Flyer magazine.

Local travel agents also said the reduced competition is likely to increase fares on flights to and from Orange County. “Already, you find fares 15% to 100% higher out of Orange County,” said Kevin Thompson, manager of Bounty Travel Service of Anaheim.

The curtailment of service out of Orange County comes just months after the county completed a $310-million expansion of the airport. But local aviation officials said they expected other carriers to quickly fill the vacuum left by USAir.

“This doesn’t raise the specter of an empty terminal,” said Eugene Moriarty, chairman of the private Orange County Aviation Council.

USAir’s extensive cuts in California are part of a broader retrenchment to help stop a tide of red ink. The airline Friday reported a $454-million loss on $6.6 billion in revenue for 1990. The Arlington, Va.-based airline is also halting service to Portland, Ore., and reducing flights from Baltimore-Washington Airport and Cleveland.

Last summer, USAir laid off 3,600 employees because of losses related to its acquisition of Piedmont Airlines. USAir’s condition has worsened lately as the Persian Gulf crisis drove up the price of jet fuel while dampening travel demand.

In California, USAir is pulling out of six airports on May 2: Burbank, Ontario, Palm Springs, San Jose, Oakland and John Wayne, and is also dropping service to Bellingham, Wash. It will continue to fly from Los Angeles, San Francisco, San Diego and Sacramento.

By pulling out of six of the state’s airports, USAir is reducing its daily departures from California airports by 97 to 192. Most of the remaining flights will go to locations out of the state.

The cutbacks will affect 500 workers in California. USAir spokesman Larry Pickett said an undetermined number of workers would be transferred to jobs in the East. He said he did not know how many workers would lose jobs. USAir said that its fourth-quarter results included a $46-million charge related to relocating or laying off employees.

USAir workers, many of them former PSA employees, shed tears when they heard the news. “A lot of us are crying today,” said one.

Bob Stone, a supervisor of customer service at John Wayne and a 12-year USAir employee, said the company has vowed to relocate employees to other jobs. “It’s not a pretty proposition,” he said. “Unfortunately, cities like this tend to be senior and a lot of us are entrenched. We have our families here,” he said.

But passengers waiting in the USAir ticket line at the terminal did not seem as affected. “I use it (USAir) four or five times a year,” said John Aschieris of Sacramento. “To my knowledge, American flies the same route.”

USAir’s shrinking act comes after a yearlong fare war in California triggered when no-frills Southwest Airlines invaded Burbank and slashed one-way fares to the Bay Area to $59 from $164.

Then last spring, United Airlines raised the stakes with half-hourly flights between Los Angeles and San Francisco and Delta Airlines, in slow gear on the West Coast since its 1988 acquisition of Western Airlines, started hourly service between the two cities.

The intense competition earned the air corridor between Los Angeles and San Francisco the nickname of “suicide alley.” Airline executives have estimated each airline lost around $12 million in the corridor last year. The current $20 one-way fare promotion is costing the air carriers another $200,000.

Industry watchers said the low fare helped drive American from the heavily traveled Los Angeles-San Francisco route on Jan. 19, although American blamed the decision on labor troubles with its pilots. The move effectively dismantled AirCal, which American acquired four years ago. American continues to fly from its West Coast hub in San Jose to Los Angeles and to Orange County.

USAir’s decision Friday dismantles the extensive PSA network it acquired for $313 million nearly five years ago. San Diego-based PSA was the state’s largest air carrier, with more than 55% of the California market. USAir is believed to have less than 40% of the market currently.

“I am dismayed to see the system dismantled,” said Larry Guske, former PSA vice president of finance.

Industry observers and former PSA executives have said that USAir failed in California because it ignored advice of PSA executives and tried to replace PSA’s well-known image with its own.

“They (USAir) bought two airlines”--PSA and Piedmont--”and turned it into muck,” said Brancatelli. “It is inconceivable that on their own, AirCal and PSA would not have survived.”

As part of its cost-cutting strategy, USAir is getting rid of its fleet of BAe-146 jets, which are among the quietest planes available but heavy fuel consumers. The carrier is canceling its Orange County operations in part because it must use the 85-passenger British-made jets for at least 12 of its flights from John Wayne Airport.

The BAe-146 is one of just a few types of jets that have been approved for many of the flights at the airport under a court-ordered noise-abatement plan. Because of the noise limitations, the county-owned facility is one of the most highly restricted airports in the nation.

County officials said the economic problems besetting USAir and several other carriers do not diminish the demand for access to the airport. Airport authorities said there is a waiting list of carriers that want to serve John Wayne.

Airport officials said they would review the complicated slot-allocation plan and work to ensure a smooth transition of USAir’s flights to other carriers. Several airlines that already serve Orange County want more flights than they currently are permitted to fly under the airport’s court-ordered, noise-control plan.

Spokesman Alan Wayne said Friday that United is “very interested” in obtaining more slots at John Wayne. USAir’s pullout, he said, “is an opportunity for us, and our scheduling department is looking at it.”

Don Valentine, marketing vice president for Southwest Airlines, said, “We have to study this very seriously.” Houston-based Southwest has expanded rapidly in California during the last three years, pushing aside USAir to become the biggest airline in Burbank and one of the top three in Ontario.

In its fleet, Southwest has 60 aircraft that would meet noise restrictions at John Wayne, but it isn’t clear whether Southwest would try to move in on Orange County. It passed up the chance to fly from Orange County when American discontinued some flights last fall.

“We’ll take all (the flight slots) we can get,” said Harry G. Lehr, vice president of planning for Alaska Airlines, which currently has three daily flights from John Wayne.

Freelance writers Anne Michaud and Zion Banks contributed to this report.

FLYING CALIFORNIA’S SKIES

With USAir’s withdrawal from many of its California routes, air competition in the state will be noticeably reduced. Map shows major intrastate carriers that serve Southern California airports and major destination cities.

1. LAX: American United Delta USAir Alaska Southwest America West Pan Am TWA 2. Burbank: American United Southwest Alaska 3. Long Beach: United Delta Alaska 4. Ontario: Alaska United Delta TWA America West Southwest 5. Orange County: Delta American America West 6. San Diego: American United Delta Southwest Alaska Pan Am TWA America West

In California, USAir is pulling out of six airports on May 2: Burbank, Ontario, Palm Springs, San Jose, Oakland and John Wayne in Orange County. It will continue to fly from Los Angeles, San Francisco, San Diego and Sacaramento.

Source: Official Airline Guide, January, 1991 FINGER POINTED AT USAIR: The stuffy East Coast airline reportedly cramped PSA’s free-wheeling style. D1