Wednesday, June 11, 2003

US Airways’ chief executive said yesterday that the airline would move its headquarters out of the Washington area if local operations remain unprofitable.

He said Congress should stop interfering with the airline’s business at Ronald Reagan Washington National Airport and Virginia officials should offer incentives for the carrier to stay at its Arlington headquarters.

“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, during a meeting with editors and reporters at The Washington Times. “If we can’t figure out a way to make Reagan National profitable, we will get out.”

Members of Congress who limit US Airways’ access to the airport represent the biggest obstacle for the Arlington-based airline, Mr. Siegel said.

“There have been 12 pairs [of slots] handed out in the last four years, and we haven’t gotten any,” Mr. Siegel said.

Instead, the flights went to Delta Air Lines, Alaska Airlines, Corporate Air, Frontier Airlines and America West.

“Like a lot of things in this city, there were some political deals cut,” Mr. Siegel said.

The Metropolitan Washington Airports Authority is the nation’s only airport authority controlled by Congress rather than local government or private enterprise. The airports authority oversees operations at Reagan and Washington Dulles International airports.

Reagan Airport is commonly used by some of the same members of Congress who authorize the Federal Aviation Administration to allocate takeoff and landing rights, called slots, to airlines.

Bills are pending in Congress to increase the number of slots at Reagan Airport by 20, some of which would be for long-distance flights. FAA rules favor giving slots to “new entrants” and disadvantaged airlines, which refers to airlines only beginning to operate at Reagan Airport or that have a small presence there.

US Airways is the largest airline at the airport, where it operates 164 flights a day.

“If you’re going to add more slots, at least give us our fair share,” Mr. Siegel said.

Although he refused to give details, Mr. Siegel said several states are trying to persuade US Airways to move its headquarters.

The airline operates hubs out of airports in Pittsburgh and Charlotte, N.C. Its corporate backers, who helped finance US Airways’ emergence from bankruptcy in March, have discussed moving the headquarters to their home in Alabama, he said.

“There have been some pretty significant incentives from other cities to move,” Mr. Siegel said.

Yesterday, Pennsylvania’s top officials offered the airline $263 million over five years to keep its hub in Pittsburgh. Gov. Edward G. Rendell, a Democrat, has said he would like US Airways to relocate its headquarters to Pittsburgh.

Mr. Siegel said after the meeting with Pennsylvania officials that he has made no decision on their offer.

US Airways officials said Sen. John McCain and Sen. John Ensign are among politicians who have interfered with US Airways’ growth plans at Reagan Airport.

Mr. McCain, Arizona Republican, is chairman of the Senate Commerce, Science and Transportation Committee. In 2000, America West was awarded slots for two flights from Reagan Airport to Phoenix.

Another slot went to America West for flights to Las Vegas, in the home state of Mr. Ensign, a Nevada Republican and member of the Senate Commerce, Science and Transportation aviation subcommittee.

“Flights to and from our home state contribute to our state’s number one business, which is tourism,” said Jack Finn, spokesman for Mr. Ensign. “Senator Ensign has an obligation to do what he can to help that business thrive.”

US Airways’ concerns of political gamesmanship are shared by Delegate Eleanor Holmes Norton, the District’s Democratic nonvoting member of Congress. She is a member of the House Transportation and Infrastructure aviation subcommittee.

“There were comments made in subcommittee that many members had a proprietary sense of our local airport,” Mrs. Norton said. “They made it clear they were making their decisions based on the convenience of their own flight schedules.”

She favors turning over control of the Metropolitan Washington Airports Authority to local authorities.

“We don’t want to slide back into congressional micromanagement of Reagan Airport,” Mrs. Norton said.

Mr. Siegel wants not only more slots for US Airways but also greater discretion in using them.

The FAA determines which airlines get the slots and how far they can fly. Most flights out of Reagan Airport are limited to 1,250 miles.

“Every town has a hometown advantage,” he said. “We want to stay, but there has to be some advantage to staying in Virginia.”

A huge incentive to stay would arise if United Airlines closes its hub at Dulles Airport, he said. United operates 60 percent of the flights out of the airport.

Mr. Siegel said US Airways would open a hub at Dulles if United pulls out. However, despite industry speculation that bankrupt United will close the hub, he said he doubted it would happen.

Constraints on US Airways’ access to Reagan Airport keep its infrastructure and operating costs high, he said.

In addition, some of the slots have been given to small airlines for short flights, which Mr. Siegel said was an inefficient use of the airport.

For example, the Transportation Department this week granted an option on a slot to Corporate Air. The regional airline is authorized to use the slot for flights to Wilmington, N.C., with a 19-seat turboprop airplane.

“What we want to be able to do is use our slots more efficiently,” said Ben Baldanza, the airline’s marketing director.

US Airways supports an FAA reauthorization bill planned for a vote in Congress as soon as this month. It would raise the definition of a regional jet from airplanes with 56 seats to those with 76 seats, which airline officials said would be a more efficient use of aircraft.

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