USAir Sounds a Retreat in Battle Over California Skies : Transportation: The airline slashes intrastate service in the face of a new challenge from United’s Shuttle.
USAir, unwilling to face intense competition from both Southwest Airlines and United Airlines’ planned Shuttle, is effectively fleeing the busy California market.
The carrier is slashing its daily round-trip flights between Los Angeles and San Francisco to four from 16, effective Nov. 13, after deciding it could not compete with the low-cost, low-price service of Southwest and United’s Shuttle, which debuts Oct. 1.
USAir said it will keep operating 43 daily flights to Midwest and Eastern cities from Los Angeles, San Francisco, Orange County, San Jose and San Diego. But it will close its San Francisco flight-crew base, requiring 273 pilots and flight attendants there to be relocated.
In addition, about 170 customer service and maintenance employees in Los Angeles and San Francisco will either have to accept transfers or be laid off, the airline said.
The decision, announced Tuesday, means USAir is virtually abandoning one of the key franchises it acquired in 1988 when it bought Pacific Southwest Airlines, a quirky airline that caught the public’s fancy by painting smiles on its jets.
Indeed, USAir joins American Airlines and Delta Air Lines in retreating from the “California Corridor” less than a decade after the trio paid a combined $1.5 billion to buy airlines that were dominant in California in the late 1980s.
Delta bought Western Airlines in 1987, and American bought Air Cal the same year. While the mergers helped Delta and American expand their overall route systems, the carriers were unable to retain their shares of the intra-California market.
The three retreated after concluding they could not compete within the state with Southwest, which claims to now have 52% of the intrastate market.
Armed with its low costs, Southwest is adept at earning a dollar on frequent, short-haul routes such as those serving California cities. When USAir, American and Delta began abandoning several California routes in the early 1990s--such as Oakland to Burbank, and Sacramento to Ontario--Southwest swooped in and never relinquished them.
The one airline that still hopes to muscle out Southwest is giant United, with its Shuttle. But Southwest responded last week by announcing plans for 15 additional flights in California. Thus, while it’s questionable whether United will be successful, there’s little doubt that the Shuttle’s debut leaves little room for USAir or other rivals.
California “is already one of the most heavily served air markets in the country and will be even more hotly contested” with the Shuttle, said Seth E. Schofield, chairman of USAir, an Arlington, Va.-based carrier that focuses on short routes in the East.
“It has become a battleground between low-cost, low-fare carriers,” he said. So USAir--already saddled with financial woes, high operating costs and Southwest’s incursions on its Eastern routes--simply pulled back in California.
Of course, travelers can still board USAir--as well as American and Delta--flights at most major California airports. But the passengers will most likely be flying out of the state.
“Instead of going north and south (in California), we’re going east,” said USAir spokesman Bryan Enarson.
Enarson also defended the purchase of PSA, and said the economic problems in California and nationwide that led the airline industry to lose $10 billion in recent years also forced USAir “to relinquish a lot of the PSA routes that were purchased.”
But some analysts said USAir never fully exploited the benefits of the PSA merger, even to the extent that American and Delta improved with Air Cal and Western.
“USAir was, in my opinion, the least successful of the three carriers in integrating what they had bought,” said Tim Sieber, research director at the consulting firm Aviation Systems Research Corp. in Golden, Colo.
