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PITTSBURGH Carrier rejects airport leases



Published: Wed, April 23, 2003 @ 12:00 a.m.



US Airways wants lower costs to stay in Pittsburgh.

PITTSBURGH (AP) -- When US Airways rejected its leases at Pittsburgh International Airport last month, so thorough was the break that county and airport officials were stunned.

A four-page list of rejected contracts or leases filed with its bankruptcy recovery plan covers services from hangar space to wheelchair and skycap services -- even fire-extinguisher maintenance.

County and airport officials are negotiating with US Airways to keep the airline's hub at the airport.

The airline is one of the region's largest employers, providing some 9,000 jobs. It also wants rent concessions at Philadelphia International Airport, but it didn't reject any leases or contracts there or in Charlotte, N.C., its other major hub.

County Chief Executive Jim Roddey said the magnitude allows US Airways to make a clean break should negotiations fail.

"I think they just gave themselves both options, either staying or leaving," he said.

No promises made

Roddey has said Pittsburgh's days as a hub could be numbered unless local leaders and the airport authority are able to reduce the airline's costs. Authority officials have said the airline was making no promises even if demands are met.

"It looks like they're pulling 100 percent out of Pittsburgh," Eric Smith, a lawyer who has represented the Allegheny County Airport Authority in the US Airways bankruptcy, said of the numerous services affected.

But, he added, that couldn't be possible. Among the contracts was one relating to fuel. Even if the airline closed its Pittsburgh hub, it still would need fuel for whatever service remained.

"That just makes me say, 'You really don't mean it, do you?' It's just so broad," Smith said.

Desire to stay

US Airways spokesman David Castelveter said the carrier does not intend to abandon Pittsburgh.

"This is an airline that would like to maintain and develop a regional jet hub in Pittsburgh," he said. "In order to do that, we have to reduce our entire cost structure in Pittsburgh."

Renegotiating the 100 contracts and leases relating to operations was not as daunting as it would appear, Castelveter said. The airline renegotiated more than 700 contracts while in bankruptcy.

Airline industry analyst Darryl Jenkins said he did not see US Airways pulling its hub from Pittsburgh.

"It's hard to go into another place and start over again," he said. He viewed the rejections as a negotiating tactic.

"I think what they're trying to do is reduce their costs. To reject [leases and contracts] across the board, that gives them lots of room to negotiate, doesn't it?"




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