By Kollengode S Venkataraman (Written 2002)
Note: A condensed version of this appeared in the Pittsburgh Post-Gazette as Note: A condensed version of this appeared in the Pittsburgh Post-Gazette as a Letter to the Editor.
On Sunday, August 11, 2002 US Airways, which occupies over 70% of the gates and accounts for over 80% of the arrivals and departures in Pittsburgh International, filed for bankruptcy under Chapter 11. I was in Little Rock on business, and on August 12, US Airways CEO David Seigel said (quoted in USA Today,) “When an airline files for bankruptcy, there is always some erosion. But we are in a strong cash position. The sophisticated customers will understand.”
In the post-Enron, post-Arthur-Anderson, post-WorldCom, post-Tyco world, people, sophisticated and unpadh, are not trusting company executives when they try to reassure the public, particularly when they are in deep doo-doo. So, I didn’t take Seigel’s comments seriously.
With US Airways dominating Pennsylvania’s air travel industry (it has hubs both in Pittsburgh and Philadelphia), news on US Airways is always on the front page above-the-fold in papers. With thousands of jobs directly and indirectly tied to air travel, not to speak of the tax revenues, this is, as it should be. So, on 8/13/02, the Post-Gazette ran a story on US Airways’ problems, assuring readers with a bold caption, “Fliers won’t see much change, but stockholders will.”
If fliers indeed do not see much change, US Airways has the real possibility of not recovering from its Chapter 11 woes. Here is why:
Let me start by saying I am not a “sophisticated” traveler. I work for a large, Pittsburgh-based corporation, and I travel on and off on business. Neither my company nor my immediate boss has insisted — or even reminded me, for that matter — that we should always choose the least expensive air carrier. They have left it to our judgment.
Years back, when I booked tickets through our travel agents, I started routinely asking ticket prices for different airlines. I started comparing US Airways ticket prices to cities to which US Airways was the only one flying nonstop, or worse still, US Airways is the only airline flying. And I was outraged.
Once I flew to San Francisco on business. The US Airways nonstop ticket was over $1500, nearly three times as American Airlines ticket with one connection, for identical travel dates and times.
I go to Little Rock frequently on work. US Airways flies 50-seater small jets nonstop to LR, and the ticket price at short notice is over $1100. American Airlines and Delta routed through St. Louis, Cincinnati, or Atlanta, are slightly over $700 for identical terms of travel.
I was mad. And I wondered, “How come US Airways is in the red despite gouging its corporate customers?” As a helpless single business traveler, I did the only thing in which I had full control: I simply refused to fly US Airways. For several years now, even without any prompting from my company, I’ve been choosing the inconvenience of connections via Cincinnati, St. Louis, Dallas, Chicago, you name it, instead of letting US Airways fleece my company.
You can imagine how other companies with tighter travel budgets, not to speak of individual travelers, make their travel decisions.
If you have to travel from Pittsburgh to, say, Raleigh-Durham, Indianapolis, Philadelphia, and similar places that are too far away to drive, and not far away enough to warrant a ticket with a connection, you are out of luck. You have no option other than getting ripped off by US Airways.
Pittsburgh has first-hand experience of the vulnerability of its well-being tied to one industry — Steel. It took Pittsburgh more than twenty years to recover from the demise of Steel.
If tying your fortune to one industry is bad, tying it to one company is even worse. And yet, that is precisely what Pittsburgh International did by letting US Airways overwhelm the airport.
Pittsburgh airport and the region can, and will, recover from the US Airways mess in the next several years. Pittsburgh International has the advantage of its location, and is an excellently designed airport with over 100 gates. It is one of the finest airports in the nation, perhaps in the world.
What we need are two or three dominant carriers using Pittsburgh International as their hub. Having two or more carriers operating from Pittsburgh will serve the traveling public better, and bring stability to the airport’s finances and the region’s economy.
My eyes swell with tears upon hearing US Airways Chapter-11 bankruptcy humiliation. But they are not tears of sorrow. END