WASHINGTON -- Pennsylvania officials are negotiating with US
Airways in an effort to persuade the airline to keep its Pittsburgh
The key issue is money. US Airways is threatening to leave
Pittsburgh if state and local officials don't contribute $864
million for improvements at both its Philadelphia and Pittsburgh
hubs, primarily to accommodate its plans to use more regional
At a June 11 meeting that included the state's governor and two
U.S. senators, Pennsylvania officials offered US Airways $264
Pennsylvania and US Airways officials hope to close that $600
million gap, and close a deal, by mid-July. To that end, state Gov.
Edward Rendell appointed a negotiating team June 17. The governor's
press secretary called the $264 million offer "a first step in the
When US Airways was in bankruptcy court under Chapter 11
protection, it received approval to walk away from its Pittsburgh
Airport leases in January if it cannot renegotiate them and lower
its costs. But the spokesman also said the airline is optimistic an
agreement can be reached.
"We have a common goal," he said. "Ours is to continue to
operate at Pittsburgh, and theirs is to continue to have us operate
at Pittsburgh. We just have to do that in a cost-effective
US Airways is not questioning the quality of the airport, which
continues to place high in airport rankings. Even David Siegel,
president and CEO of US Airways, has called Pittsburgh "a great
But in a recent speech he also added this: "As impressive as it
is, and as much as people like connecting there to shop the stores
of the airport mall, not one passenger is willing to pay us extra
for the privilege of connecting at our Pittsburgh hub."
Siegel said it costs US Airways $9 per passenger to use the
airport, and $8 of those $9 are used to service the facility's $675
"I believe that the issues at play in Pittsburgh will soon
confront other airports and other airlines as the industry
continues to restructure," he added.
But Pittsburgh isn't the only place US Airways has been
threatening to leave. Siegel has been issuing similar warnings
about the airline's home near Washington, chiding local business
and community leaders for not lobbying hard enough on the airline's
Siegel wants Congress to include US Airways in any legislation
to increase the number of long-range flights allowed to fly out of
Washington's Reagan National Airport and to let the airline use its
new, larger regional jets there.
Where did Siegel suggest the airline might move if it left the
According to a May 28 speech Siegel gave to Washington-area
business leaders, the airline's new majority owner, the Retirement
Systems of Alabama, would love to find an economic justification
for moving the company's headquarters to Montgomery, Ala.
Meanwhile, the business community in Charlotte, N.C., where US
Airways also has a hub, "has long courted us to relocate to North
Carolina," he added.
"Most recently," he continued, "the governor of Pennsylvania has
suggested that we should relocate to that state as part of our
negotiations to maintain our hub in Pittsburgh."