Relaxation of scope clauses allows embattled airline to double number of smaller jets

US Airways has won a long-sought agreement with its pilots union to allow the airline to double its regional jet fleet from 70 to 140 aircraft. The agreement will allow US Airways regional carriers to operate additional regional jets with 50 or fewer seats. The airline had reached its earlier scope clause limit of 70 regional jets in February.

In return for the deal, Air Line Pilots Association members have received job protection assurances for at least 287 senior pilots and for some non-union pilots flying with US Airways Express carriers.

Adding more regional jets is seen as crucial to the airline's long-term viability. US Airways president and chief executive David Siegel last week cited increased competition from regional jet operators as a contributor to the airline's $269 million first-quarter loss.

With the highest costs among US airlines, US Airways has faced stiff competition from regional jet operators on its East Coast routes.

The airline had just $561 million in cash as of 31 March and will apply for US government loan guarantees, says Siegel. Although the airline has received a $169 million tax refund and predicts a positive operating cash flow by the second quarter, liquidity could become a major concern by year-end, without the federal loan guarantee and a reduced cost structure, says Standard & Poor's.

US Airways is expected to allocate the bulk of the 70 additional regional jets to wholly owned Express carriers, starting with the currently inactive Potomac Air, which was shut down last September when its Washington National base was closed after the terrorist attacks.

US Airways partner carriers Chautauqua Airlines and Mesa Airlines account for all 70 regional jets in Express service and both are keen to expand.

The agreement addresses some of the union's concerns, including the restriction of additional regional jets to 50 seats, and a guarantee of jobs to furloughed pilots if any new aircraft are earmarked for Potomac Air.

However, concessions from unions, management and suppliers remain part of a business plan to be submitted to the US government as part of the loan guarantee application, which must be received by 28 June.

The carrier has not unveiled any new regional jet orders for US Airways Express, which now operates Bombardier CRJ200s and Embraer ERJ-145s.

Source: Flight International