As US Airways struggles, industry ponders 'what if'

Local airports and competing airlines are preparing themselves for a world without US Airways.

The bankrupt airline faces several financial hurdles that will determine whether it survives beyond next month. What's more, the carrier is coming off a Christmas weekend in which a large number of employees calling in sick left thousands of passengers -- and their luggage -- separated from their loved ones.

With US Airways the third-largest airline at Logan International Airport and the second-largest at both T.F. Green Airport in Warwick, R.I., and Manchester Airport in Manchester, N.H., officials are bracing for the worst.

Yesterday, Tom Kinton, Logan's aviation director, asked his staff to start drawing up a plan for securing US Airways' Terminal B space in the event the carrier folds soon, said airport spokesman Phil Orlandella.

Logan's contingency plan includes determining who could use those facilities after the airline moved out, and how to get back airport security badges from former employees, he said.

At the same time, Logan would start looking for a new tenant. Airports earn money from airlines by collecting various charges, from landing fees to payments on gate leases. When Eastern Airlines liquidated and vacated its space in Terminal A, several now-defunct regional carriers filled the space, Orlandella said.

Logan officials would not say who they're courting, but JetBlue and AirTran are two carriers that are expanding and would probably want more and better space. "Losing a major airline means a lot of money and a lot of jobs, but if it happens, we can't control that," Orlandella said.

At T.F. Green, where US Airways flies 29 of 113 total daily departures, a liquidation of the airline would spark an immediate hiring freeze at the airport, said Patti Goldstein, an airport spokeswoman. A battle between US Airways and Southwest Airlines for passengers traveling to Philadelphia is largely responsible for the airport's rebound, which only in the last year began to grow following the loss of flights and traffic after the Sept. 11, 2001, terrorist attacks.

US Airways carries about 21 percent of all passengers at Manchester Airport, and its liquidation would be a big blow, said Kevin Dillon, the airport's director. But Dillon said he is optimistic other airlines, such as Independence Air or Southwest, would add flights if US Airways disappeared.

"What we would expect is that our other carriers would move in and pick up the slack," he said.

AirTran has already said it would be interested in picking up US Airways' lucrative hourly shuttle route between Boston, New York, and Washington. Other airlines yesterday stopped short of saying they were planning to scoop up former US Airways passengers, but none denied they stand to gain if the airline folds.

Independence Air competes with US Airways for passengers between its Dulles International Airport hub outside Washington and several other cities, including Boston and Manchester.

"Our system overlaps them at a 90 percent match," said spokesman Rick DeLisi. "We wouldn't want to have any comment other than to point out the similarity of the routes we fly."

Discounter JetBlue Airways' expansion plans hinge on Boston, New York, and Washington, three critical Northeastern cities for US Airways. JetBlue will begin taking delivery of new regional jets next year and plans to use them to develop new routes from those cities, said JetBlue spokesman Gareth Edmondson-Jones.

"We'd be going there with or without" US Airways' folding, said Edmondson-Jones. "That's where the people are in the Northeast, and any airline that's growing, that's where you're going to have to grow."

Analysts say Delta Air Lines, US Airways' sole shuttle competitor, could also win big.

US Airways filed for Chapter 11 bankruptcy protection Sept. 12, following months of tense negotiations with its labor unions. The airline is trying to wring $1 billion in concessions from labor in its attempt to emerge from its second bankruptcy filing as a leaner, profitable carrier.

Labor woes represent one of US Airways' biggest hurdles in January. Airline executives blame higher-than-normal sick calls from baggage handlers for causing the cancellation of hundreds of flights and thousands of lost bags over the Christmas weekend. The International Association of Machinists, the union that represents US Airways baggage handlers, is the last of the carrier's labor unions still without an agreement. Union officials have issued statements denying the absences were organized.

US Airways knows it must fight to win back its passengers after the Christmas fiasco, said David Castelveter, a spokesman.

If the machinists don't strike a deal with the airline by Jan. 6, a bankruptcy judge could invalidate the workers' contract and impose new labor terms. Beyond that, US Airways needs to raise $100 million in cash to comply with the terms of its aircraft lease agreements with General Electric Co.

A Jan. 14 deadline for the government to decide whether it will continue to guarantee a loan that US Airways has been using for operating capital is also looming.

Airline specialists said yesterday that US Airways can still survive those challenges, but any further glitches would almost certainly lead to its demise.

Keith Reed can be reached at reed@globe.com.