- The Washington Times - Thursday, June 12, 2003

A move by US Airways to relocate out of Arlington would hurt the business image of the Washington area, but competing airlines quickly would fill the void, business leaders said yesterday.

“There’s a very vibrant economy here,” said Darryl Jenkins, director of George Washington University’s Aviation Institute.”It’s not going to put it in the tank.”

At a meeting Wednesday with reporters and editors at The Washington Times, US Airways’ chief executive said he would move the airline’s headquarters out of the D.C. area if it continues to operate unprofitably here. He also said the airline might cut its 164 daily flights at Ronald Reagan Washington National Airport.

He blamed Congress for interfering with the airline’s business at the airport by unfairly restricting the number and length of its flights. He also said Virginia officials should offer incentives for US Airways to keep its operations in Arlington.

“We can’t sustain our position at Reagan National in the long term if we continue to lose money,” said David Siegel, US Airways president and chief executive officer. “If we can’t figure out a way to make Reagan National profitable, we will get out.”

For the D.C. area, a relocation by US Airways would be a “short-term hit” to the local economy, Mr. Jenkins said.

The airline employs 780 persons at its corporate headquarters and another 100 accounting staff members in the nearby Ballston neighborhood, making it one of the largest employers in Arlington County.

Mr. Jenkins said there was little doubt the threat by Mr. Siegel to leave was real.

“It is a credible threat,” Mr. Jenkins said. “I don’t think he’s the kind of guy in a poker game who would bluff.”

Loss of the corporate headquarters in Arlington is the greatest risk, he said. The flight operations probably would remain at Reagan Airport.

“I have a hard time believing they’re going to pull out of National,” Mr. Jenkins said. “I can see them leaving Arlington. Arlington is high cost. [Mr. Siegel is] on the warpath with nearly everyone right now on cutting costs.”

US Airways emerged from bankruptcy in March and is trying to cut costs to remain solvent.

If US Airways gave up its operations at Reagan Airport, other airlines would take over the valuable slots, Mr. Jenkins said.

Tara Hamilton, spokeswoman for the Metropolitan Washington Airports Authority, which operates Reagan and Washington Dulles International airports, said the corporate headquarters could move without diminishing the quality of US Airways’ service at Reagan Airport.

“Aircraft operations are not affected,” she said. “It’s a different operation.”

US Airways operates more flights than any other airline at Reagan Airport.

Nevertheless, US Airways is making Virginia officials nervous.

“The state of Virginia has not heard anything from US Airways,” said Mike Schewel, Virginia’s secretary of commerce and trade. “Our door remains open. I’m not going to speculate what we would or wouldn’t do. We obviously value them very much.”

Mr. Siegel said other states are trying to convince US Airways to relocate there.

The airline operates hubs at airports in Pittsburgh and Charlotte, N.C.

On Wednesday, Pennsylvania’s top officials offered the airline $263 million over five years to keep its hub in Pittsburgh. Gov. Edward G. Rendell, a Democrat, wants US Airways to relocate its headquarters to Pittsburgh.

Charlotte offers the advantage of being a less-expensive base of operations than either Arlington or Pittsburgh.

Congressional transportation leaders brush off criticism from US Airways that they are unfairly interfering with its business.

“We own National Airport and we own Dulles Airport, so we certainly have a right to protect taxpayers’ interest and also to encourage open and fair competition,” said Rep. John L. Mica, Florida Republican and chairman of the House Transportation and Infrastructure aviation subcommittee.

The Metropolitan Washington Airports Authority is the nation’s only airport authority run by the federal government.

Congress already has tried to accommodate US Airways by reclassifying 76-seat airplanes as being eligible for regional flights out of Reagan Airport, Mr. Mica said.

Federal Aviation Administration rules limit the size of airplanes that can fly shorter, regional routes out of the airport. The previous limit was 56-seat aircraft.

US Airways persuaded Congress to increase the limit in pending legislation to reauthorize the FAA. The larger aircraft are more efficient and bring in more revenue, airline officials said.

The House version of the FAA reauthorization, which includes the regional airplane reclassification, passed Wednesday. The Senate version, which does not mention the issue, is pending.

US Airways’ demands for more concessions would give them an unfair advantage over competing airlines, Mr. Mica said.

“I’m sure people would like to see them keep their corporate activity here, but that’s their decision,” Mr. Mica said. “I would love to have a business and eliminate competition, but when I was in business, I never had that opportunity.”

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