ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 10, 1996 TAG: 9610100070
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
USAir plans to offer low-cost air service between the Northeast and Florida if it can get its unions to accept the idea, a spokesman for the Air Line Pilots Association said Wednesday.
The new service would compete with Delta Air Lines' new low-fare operation, Delta Express, as well as Southwest Airlines Co. and ValuJet Airlines, all of which are encroaching on USAir's traditional territory in the Northeast.
But, first, the Arlington-based airline has the difficult task of persuading its unions to accept the flexible work rules, lower wages and longer hours that higher productivity budget airlines require, said airline analyst Raymond Neidl.
Bob Gaudioso, chairman of the USAir chapter of the pilots' association, said the airline's management approached the union with the idea in August. On Sept. 20, the pilots allowed their negotiating team to begin formal talks on the issue.
``We've done an analysis and feel it's appropriate for us to look at competitive strategic alternatives,'' said Gaudioso.
``Certainly, looking at Delta Express and Southwest's encroachment on our markets, it's important for USAir to be able to provide competitive service,'' he said. ``That means job security for employees, and it's also in our shareholders' best interests.''
Stephen Wolf, USAir's chairman and chief executive officer, has had success getting union cooperation in similar situations, said Neidl.
``He turned around troubled airlines Flying Tiger and Republic and, most recently, he increased earnings at United Airlines,'' he said. ``The question is, does he have another rabbit to pull out of his hat?''
USAir spokesman David Castelveter would not discuss the specifics of the airline's plans. But it's likely that USAir's new service will resemble Delta's low-cost operation, Delta Express, Neidl said.
Delta runs its no-frills low-cost service from eight cities in the Northeast and Midwest to Florida. It was launched Oct. 1 after Delta won concessions from its union.
Gaudioso, however, emphasized that USAir is looking for a unique solution. ``There are a lot of templates out there from what other airlines have done, but we have to look at our situation specifically and structure our response so that it works for USAir.''
USAir has about 42,000 employees, most of them on the East Coast.
LENGTH: Medium: 51 linesby CNB