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US Airways as a discounter?

The struggling carrier will relaunch nonstop New York-Florida flights as it tries to go toe-to-toe with low-fare flyers.

STEVE HUETTEL
Published August 12, 2004

Struggling US Airways wants to jump back into highly competitive, low-fare routes between the Northeast and Florida as it tries to remake itself into a discount carrier.

The airline has a strong presence in New York, Boston and Washington, D.C., and must beef up schedules between those cities and high-demand destinations like the Sunshine State, said Ben Baldanza, senior vice president of marketing and planning.

"Being able to serve big markets means being able to fly where customers want to go, like Florida," Baldanza said in an interview Wednesday. "We recognize that we can't be scared ... of markets like New York-Florida."

On Nov. 7, US Airways will resume nonstop flights between Fort Lauderdale and New York's LaGuardia Airport. "It would be logical and natural to assume Tampa and Orlando will have point-to-point service to big cities on the East Coast," Baldanza said.

US Airways took perhaps the most severe financial hit among airlines when passenger demand plummeted after the Sept. 11 terrorist attacks.

In response, the carrier slashed flight schedules, including nonstop service from Florida to New York and Boston. Passengers flying US Airways to those cities have had to connect through one of three hub airports or Ronald Reagan Washington National Airport.

US Airways remains in shaky financial shape. The airline says it needs to cut about $1.5-billion in operating costs, including $800-million in wage and benefit concessions or changes in work rules. Without new labor agreements in place before Sept. 30, US Airways says, the carrier might file for its second bankruptcy reorganization in two years.

At the same time, US Airways has begun carrying out a plan to transform into a low-cost carrier along the lines of Southwest, JetBlue and other competitors.

The airline began to roll out a system of lower fares and fewer ticket restrictions in select markets. US Airways also plans more nonstop flights between big markets, replacing connecting service through hubs.

New York City is far and away the nation's largest airline market. And Florida cities are the most popular destinations from the Big Apple.

New York-Fort Lauderdale was the No. 1 route in the United States last year, with 3.5-million passengers - or 9,600 per day - flying back and forth. New York-Orlando ranked No. 2, with New York-Tampa No. 16.

One big reason for their popularity is the proliferation of cheap flights. JetBlue Airways has extended a $49 one-way sale for flights between New York and Florida through Monday. At the peak of winter, JetBlue will have 71 daily nonstops from New York to Florida cities.

Stuart Klaskin of KKC Aviation Consultants in Coral Gables says a weak US Airways is foolish to challenge JetBlue and other established discounters on the routes.

"No market in the country is more influenced by low-cost carriers than New York-Florida," said Klaskin, who has worked for JetBlue and discounter Spirit Airlines. "They're in no shape to get into a pitched battle with JetBlue."

Baldanza acknowledges US Airways must cut costs to compete in New York-Florida markets. "You can't just lower fares," he said. "It's all one big thing. If you take one piece, it doesn't work on it's own."

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