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News Article - November 08, 2007

US AIRWAYS THREATENS TO CANCEL CHINA SERVICE  
  Livid at US Airways' threat to call off expansion of its service in Philadelphia, Sen. Arlen Specter accused the carrier yesterday of extortion and berated its chief executive officer. "If it's just jawboning, so be it," said a visibly angry Specter (R., Pa.), glaring at Douglas Parker, the CEO, following a meeting in Washington. "But maybe there's more that we can do."

   At the same moment in Dallas, Southwest Airlines - US Airways' rival in Philadelphia and nationwide - detailed its own growth plans for Philadelphia. And Ron Ricks, Southwest's executive vice president, pointedly complimented Philadelphia city and airport officials "who have bent over backwards to be fair to everybody." The reactions came after US Airways, the dominant carrier at the fast-growing Philadelphia International Airport, threatened to scuttle its plans to provide nonstop flights between Philadelphia and Beijing, capital of the world's fastest-growing major economy. Many local and national officials had lobbied for the routes on the carrier's behalf, but US Airways now says it cannot sustain the service if the airport allows Delta Air Lines to move into the disputed Terminal A-East as planned next week.

   Its threat Tuesday was met by jeers from city and airport officials, which grew into anger yesterday. The 60-minute Washington meeting, held in Specter's office and attended by Democratic Sen. Bob Casey and nine Pennsylvania congressmen, was highly acrimonious, according to a participant. Parker and US Airways president Scott Kirby were criticized for planning drastic cutbacks in Pittsburgh, as well as threatening the Beijing-Philadelphia route.

   "It was not a satisfactory meeting," Specter told reporters later. "The delegation and I worked very hard on the flight to Beijing, to get the Department of Transportation to agree. US Airways talks about a new terminal for Philadelphia, but I don't know that I will back federal expenditures for a new terminal with the way this company conducts itself. "I told Mr. Parker, and I don't use this word lightly, it sounds like extortion: 'If you give Delta these slots, the Beijing flights are off; if you give Delta these slots, then we will look to Charlotte and Phoenix as hubs,' " Specter said. The senator then noted that US Airways reported a sizable profit during the first nine months of 2007.

   Parker, who had led America West, based in Tempe, Ariz., until it merged with US Airways in 2005, mostly maintained his composure under the onslaught. He said that airline executives were "working hard to help the delegation understand our perspective" and that the carrier was "deeply committed to the Commonwealth of Pennsylvania."

   Parker said the Philadelphia airport's plans to allow domestic carriers to move onto its international concourse would adversely affect the expansion of US Airways' routes and service. "We're not trying to threaten anyone . . . but if, indeed, we have fewer gates than we had last summer, then not only won't we be able to expand, we will have to contract our international operations," Parker said.

   As Parker tried to explain his negotiations with the Philadelphia airport, Specter interrupted to say that the "adverse effects" predicted by the carrier "seemed a little more than coincidental." "It's the facts of the situation," Parker replied.

   Parker repeatedly referred to the delegation as "the congregation," but his preaching fell on angry ears. Specter said he took Parker's Philadelphia ultimatum seriously. "I'm going to be taking a look with the Department of Transportation about the Philadelphia-to-Beijing flight," he said. "Perhaps he can't withdraw it, perhaps he can." Delta's move from Terminal E to A-East that US Airways opposes is a long-anticipated and much-needed part of Southwest Airlines' plan to eventually double its flight schedule from Philadelphia.

   Ricks, who oversees Southwest's airport operations, detailed how the airline had worked with Philadelphia airport officials since it started service to Philadelphia in 2004 to get enough gates for its 120-plus flights a day. The airline now has 63 daily flights to 16 cities, with plans to add three cities next spring. But it eventually could use as many as 17 gates in Terminal E, Ricks said in an interview at Southwest's Dallas headquarters.

   "This is not Southwest vs. US Airways," he said. "The city's plan for using its gates has been years in the making. The Delta relocation looks simple, but it's a huge deal. . . . It's the first domino that has to fall, for a lot of other things to happen." Southwest decided to come to Philadelphia, the kind of major-airline hub that it traditionally avoided, in part because airport officials had a vision of adding a "hammerhead" or semi-circular extension, to the end of Terminal E. That would give Southwest additional gates beyond the four it had at first.

   Southwest later rented four more gates in Terminal D, but the separate security checkpoints for D and E make it a cumbersome operation for the airline, Ricks said. In order to begin working on the expansion of Terminal E, Delta would have to move to Terminal A-East, which it wanted to do anyway to save on rent and have better facilities, according to Ricks and city Aviation Director Charles J. Isdell.

   Southwest, US Airways, other airlines and airport officials all agreed almost 18 months ago that Delta's move would proceed. But airport officials came to Southwest in December, saying US Airways had asked for the plans to be put on hold because it wanted to use A-East to add more international flights last summer, Ricks said. Since then, Isdell said, the airport has studied and rejected other ideas proposed by US Airways to keep Delta out of A-East.

Source - Philadelphia Inquirer



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