US Airways Cuts Routes, Retrenches to its Hubs

Posted by: Justin Bachman on October 28

US Airways (LCC) will slash 1,000 jobs and reduce red-ink routes by the middle of 2010, continuing the trend of U.S. airlines focusing on their hubs as a way to return to sustained profits. By the end of next year, US Airways says 99% of its seat capacity will be concentrated at its three hubs and Washington-Reagan National, up from 93% now. As part of the moves, US Airways will end flights to five European cities: Birmingham, England; London, Milan; Shannon, Ireland; and Stockholm. Two others, Brussels and Zurich, will get year-round service instead of seasonal flights. The airline also is dropping plans to begin flights to Beijing.

Two cities, Colorado Springs and Wichita, will be dropped from the airline’s network, and Las Vegas will see further cuts as the company goes from 64 to 33 daily flights at one of its former hubs. US Airways will also close crew bases at Boston, LaGuardia and Las Vegas. As for its hourly Shuttle service, the airline plans to swap 124-seat Airbus A319s for smaller 99-seat jets on the New York-Boston route.

“By focusing on our strengths and eliminating unprofitable flying we will increase the likelihood of returning US Airways to long-term profitability, which is in all of our best interests,” US Airways CEO Doug Parker said Wednesday in a statement. Last week, the company reported an $80 million loss for the third quarter.

U.S. airlines, which are nervously watching crude oil flirt with $80 per barrel, have taken a hard look at marginal routes in recent months and decided to focus on where the money is. That means the places where they dominate, ie, their hubs. American announced similar plans on Sept. 17, and in August US Airways swapped 125 slots at LaGuardia with Delta, in exchange for 42 slots at Reagan-National and access to Japan and Brazil.

If 2008 was the year of deep capacity cuts amid the crisis of $147 oil, 2009 has been the year of even further strategic pruning. Executives no longer tolerate flights that are not consistent financial performers.