Remember, with Delta, US Airways didn’t try to get labor’s buy-in but it would have had trouble anyway. The US Airways plan then was to shrink the combined airlines, and that doesn’t sit well with labor. Meanwhile, Delta was able to rally its workforce and a huge groundswell of support to “Keep Delta My Delta” sprung up. That couldn’t be further from what’s happening at American.

US Airways doesn’t want to shrink, but more important than that, at American, labor hasn’t respected management for a decade. Sure, there’s a new CEO in town but Tom Horton is still part of the same regime. His announced plans for labor involved so many cuts to wages and jobs, that it wasn’t hard for US Airways to come in with a better plan.

Revenue Growth, Not Just Cost Cuts
See, the current management team at American blames nearly all of its problems on its costs. Sure, that’s an issue, but Doug Parker, Scott Kirby, and the rest of the US Airways team know that there’s a big revenue problem as well. Fix that, and you don’t need to slash labor to the same extent. That’s music to the unions’ ears.

The terms that American unions have agreed to will keep 6,200 jobs that would be furloughed under the American plan. While we don’t know details of where these jobs will come from, this plan should be a no-brainer for mechanics and those in the airports because they stood to lose the most under the current management team’s plan. But what’s really telling about the potential here is that the pilots and flight attendants have jumped on board.

American’s misguided plan is to flood the market with a 20 percent capacity increase over the next few years. Though incredibly misguided, that would mean more jobs for pilots and flight attendants. So even with that carrot being dangled, they’re supporting the US Airways plan. Why?

The pilots have been very vocal about it. In a memo, the message was blunt. “The APA leadership does not believe that AMR’s business plan will produce an airline that is viable long term.” In other words, they agree with US Airways and most airline analysts that they need some heft to compete with Delta and United. And they need that heft without organic growth since there’s no need for more capacity in the market. US Airways offers that opportunity plus the promise of a very smart management team that can make American competitive again.

A Better Team with a Better Network
The real issue here is that labor has no faith in American’s management team. They don’t believe that the business plan will work (read what the flight attendants say), and they have good reason to feel that way. They also don’t trust their management team and haven’t for years. In the pilots’ memo, it was pointed out that American has engaged the same attorney the much-hated Frank Lorenzo used with Continental/Eastern. Things like that do not help build trust. Neither does a Section 1113 proposal that will result in dramatic cuts.

More importantly, the US Airways efforts have started to help build trust with that management team. Some have worried that a combined US Airways/American would look like US Airways. It won’t. It will be American but better-run. The airline will remain American Airlines and will be headquartered right where it is today. There will just be a better team in place to run a better network.

Keep in mind, this is just an agreement with the unions IF an acquisition happens. That means there’s a lot of work to do, but this is a huge first step that might seal the deal. Why do I say that? Look at the creditors committee.

Swaying the Creditors
The unions hold 3 of the 9 seats on the creditors committee, and clearly they support this move. Boeing sits on the committee as well. With US Airways affirming the orders on the books, Boeing should be happy since it hasn’t sold an airplane to US Airways in years. This creates more opportunity.

The Pension Benefit Guarantee Corporation (PBGC) is also a member. It has been downright angry about American’s plans for its pensions, so you would think that US Airways would present a better option. And then there’s Hewlett-Packard. American has been working with HP on a new reservations system but nothing has come of it yet. US Airways, however, uses SHARES, a system that HP owns. You think HP will be onboard? Oh yeah.

That’s plenty of votes right there. If you have the creditors committee behind you, that’s huge. Of course, we haven’t seen what US Airways will offer yet, but you know that if it couldn’t offer something compelling, it wouldn’t be putting so much effort into this.

Can it Be Stopped?
What can American’s current management team do to stop this? Well, they continue through the process on breaking union agreements in bankruptcy (Section 1113). Could this move by US Airways make American reevaluate its proposal to try and keep labor? Probably, but labor is lost. A new proposal now will be seen as hollow. I don’t think American can get labor back, but really it doesn’t even want to try. The airline circulated some talking points that included this:

We believe statements of non-binding support from union leaders for alternative proposals are no coincidence given the timing of the 1113 process.

Right, it’s all just a negotiating ploy. Keep thinking that, American, and you’ll watch your airline slip away.

I’m sure there are still ways that American can try to maneuver, but so far it doesn’t seem to be trying very hard. It appears to be playing the “stay the course” game with a reminder that it has the exclusive right to reorganize until September 28. What it fails to mention, as has been reported by Holly Hegeman over at PlaneBusiness, is that the while American has the exclusive right, it’s not true exclusivity. The creditors can ask the court to end the exclusivity early if there’s another real option.

What About US Airways Unions?
Yet another common objection to this merger is the tired line that US Airways can’t get its own house in order, so how could it handle American? Very well, actually. The US Airways unions are being cautious, but they should be happy. US Airways has been clear that it needs to keep wages lower because it can’t produce as much revenue as the big three from it existing network. With American, that changes and raises will become possible.

Now, that might not please the pilots union USAPA since that group has acted against its own interests from the start, but that’s too bad. American’s pilots outnumber USAPA members handily. USAPA will disappear in a merger and then hopefully there will be a rational union leadership that will best represent its members on both sides. If the legacy American pilots can come to an agreement with US Airways so quickly, then the US Airways pilots would probably be insane not to take that same contract.

In the end, US Airways is making all the right moves right now. It has now become far more likely that we’ll see a combination of the two airlines.

[Original photo via Flickr user numberstumper/CC BY-SA 2.0]

This was my first chance to see the newly-refurbished US Airways Express aircraft operated by Mesa. It was also the first chance I had to fly a US Airways mainline aircraft into Long Beach in quite some time. Overall, everything was fine but the ground experience in both places left something to be desired.

As usual, I left home an hour before the flight and found myself in a short but barely-moving security line. It was apparently amateur-hour at LGB with every other person forgetting to empty pockets, take liquids out, remove shoes etc. Once through, I tried to find a seat in the packed trailer terminal.

It was packed because US Airways, Delta, and Alaska were all pushing out airplanes at the same time, and the little trailer isn’t meant to handle that much at once. I can’t wait until the new concourse opens up.

Even though everything was running on time, it was a tense situation just because of the packed house. When they called boarding for our flight, people rushed up to get on board quickly just to escape the terminal.

The agent who was boarding was aggressive and forced almost everyone to tag their bags for planeside checking for this CRJ-900. The guy in front of me balked and said he had brought his (relatively small) bag on board this exact same aircraft type on the way out, but she wanted to hear nothing of it. She barked back at him that he had to check his bag.

He looked like he wanted to fight, but instead, he just shoved his boarding pass in front of the agent and said “fine, just check me in.” That did it. She made him stand to the side, scolding him publicly for his behavior. Soon after, she let him board after his tone softened. I was just happy to be out of there.

The construction is coming along nicely but that means the walk to the airplane is long and confusing. With several aircraft boarding at once, we all merged into one lane for walking and then there was a split to different aircraft at the end. Needless to say, they were pretty loudly announcing where our airplane was going once we boarded, just in case.

This was my first chance to see the new Mesa interiors and they looked good. First Class seats were a nice touch, and even the recovered leather coach seats looked significantly better. Our mostly full flight pushed back just about on time and we took off on a relatively uneventful flight.

I say “relatively” uneventful, because there were some strange characters onboard. The woman next to me stared at a copy of her itinerary for most of the flight. She just held it up in front of her face . . . for maybe 30 minutes. Very weird.

I had my customary ginger ale and that’s when I started to notice that these seats didn’t look as good as I first thought. The seatback looked like stucco that had been painted over one too many times. There were chips in the paint and it just didn’t look great.

More annoyingly, these seats would not stay upright. The flight attendant had asked several of us to push the button to bring our seats up before departure. I had figured that came from the last person in the seat, but I was wrong because when we descended into Phoenix, the same thing happened. Apparently, these seats do their own thing.

Normally after a hard week of work, I like to stay overnight and have a beer with friends. But I couldn’t leave my wife alone with the little guy any longer, so I came back Friday night, taking advantage of a nice mainline flight home.

I got to the airport about an hour in advance and it was surprisingly busy. The A350 model I had won at the conference was suspicious enough that the TSA pulled me aside and searched my bag. Funny.

I went to my gate and found a fair number of people waiting around with our airplane there already. I had thought that tickets provided by US Airways were upgradeable if seats were open so I went to the gate agent to ask. She looked at me funny and asked if this was a mileage ticket. I explained to her what it was and she said I could buy an upgrade like anyone else for $50. Ok. I didn’t take it and just went to wander and remember the good old days when I use to roam these halls.

I’m always surprised when I find someone who I knew from my America West days, but sure enough I ran into a guy who was there back then and we caught up on life. He took at a look at my ticket and said it really did look like it was a travel voucher used to purchase it. Interesting. I should ask the US Airways folks about that one.

I went to board the flight and asked the gate agent if it was full. Without looking up, she said it was very full and hurried me along. It wasn’t full at all. I took my window seat and had an empty middle and aisle next to me. I’m guessing we were three quarters full at most for the short ride home.

The captain was in a good mood. He came on and thanked “junior travelers” James and Bella for stopping by the cockpit on their way on to the airplane. I loved that because I knew the kids probably went nuts hearing their names over the PA. It’s a little thing, but it’s a great way to make kids feel special when they fly.

The airport had gone and uncharacteristically switched the runways on us, so we had a long taxi to the west end of the airport only to take off to the east and then turn right around. It was a mostly clear night so the view was beautiful. I had a ginger ale and soon we were on our way into Long Beach and I was on my way home.

Consolidation
CEO Doug Parker and the team weren’t stupid. They knew that many of the questions of the day would revolve around consolidation and whether a US Airways-American merger was in the cards. Of course, there was no way that Doug could comment on anything like that despite repeated questions asking the same exact thing. Doug did address it right at the beginning, however. Doug reiterated his belief that consolidation has been very good for the industry, and he is not averse to participating. He was, however, quick to make the distinction that consolidation is now “no longer a strategic imperative.”

In other words, while the industry needed consolidation to get healthy in the past, there has been tremendous benefit from what’s happened to date and US Airways doesn’t need to participate to remain viable. That being said, US Airways isn’t shying away from it. You know that it was difficult for Doug to say “no comment” every time someone mentioned a certain AAirline, because he would have loved to talk about it. But he just couldn’t. We’ll have to wait to see how that plays out.

Five Goals
Back to running the airline at hand, we were given five goals for the year, and as it was noted, they haven’t changed must from past goals. Consistency was certainly the theme of the day. The goals were:

1. Ops: Industry leader in operating reliability
2. Revenue: Maximize value of existing assets
3. Costs: Maintain strategic cost advantage
4. People: Actively engage employees
5. Long-term strategy: Control our destiny through sustained profitability better than our peers

In short, US Airways needs to continue to run a great operation and keep its costs lower than other legacy carriers because its network will continue to produce less revenue than the other guys. To do that, it needs to make sure to keep explaining this strategy over and over to employees so that everyone understands the situation at hand.

Fuel
Much of the discussion of the day touched on the cost of fuel. The point was made that in 2008, US Airways actually paid a little less for fuel than it did in 2011 ($3.11 per gallon vs $3.09). In 2008, however, the airline lost over $800 million while in 2011 it made over $100 million. The difference? The airline could pass along over 85 percent of the increase in 2011 while 2008 saw demand crash so quickly that it was a bloodbath. Some of that new revenue is from fare increases, but ancillary revenue plays a big part as well. In fact, nobody seemed to think that the industry would exist today in its current form if it weren’t for ancillary revenue, of which US Airways brought in $537 million in 2011. Oh, and let’s not forget the benefit that comes from the industry collectively keeping capacity under control.

Operations
The operations discussion was an easy one. On time percentage is way up, baggage mishandling is way down, and complaints are way down as well when looking back toward the dark days of 2007. This year, thanks to benign winter weather, things have been going even better. On January 31, US Airways hit an all time record for the airline with 96.1 percent of flights arriving on time. The airline also has already had more days without a cancellation in 2012 than in any previous FULL year.

Irregular Operations Recovery
While the mantra used to be about reliability, convenience, and appearance, the latter has now been switched out to “recovery.” The airplane interiors are in much better shape these days and a lot of work is underway to create more opportunities to fix problems when things go wrong. One tool that we were shown was Sensis Aerobahn, which is a real-time ground radar program that shows where all airplanes are while on the ground at an airport. It will help identify short connecting opportunities where there is risk of misses, and it will allow the airline to more easily switch gates around to help make connections. This is being rolled out to all the hubs.

Capacity and More DC Flying
This year effectively marks the end of the US Airways transition to focus its flying on its Phoenix, Charlotte, and Philly hubs along with its Washington/National focus city. In 2006, only 83 percent of flying touched these cities, but with the completion of the LaGuardia slot swap with Delta that gave US Airways more slots in Washington, it’s now up to 99 percent. All non-hub flying from Vegas is gone. Same goes for LaGuardia except for the Shuttle to Boston along with Pittsburgh flights. Nearly all Pittsburgh and Boston flying is gone with the exception of a few random markets like Boston to Buffalo and Pittsburgh to St Louis. In its hubs, US Airways is the number 1 airline, so it’s playing to its strengths. The comparison to American’s weaker position at three of its five hubs was not lost on anyone.

As part of this discussion, US Airways announced what it would do with the remainder of its Washington/National slots that it acquired from Delta. It will begin flying to Augusta (GA), Minneapolis, Northwest Arkansas (Wal-Mart), Montreal, Quebec, and Toronto. In addition, it will use its newly-earned long haul flight exemption to start a San Diego flight. This comes at the expense of a DFW flight. Interestingly, San Diego will be operated with an A320 – I really didn’t think that airplane could make it that far off National’s short runway, but apparently, it can.

The Fleet
US Airways has effectively committed to no fleet growth in the near future. It will take delivery of 12 new Airbus narrowbody airplanes this year, but those will all be replacements for old 737s. The 737-300s will be gone by the end of this year with the 737-400s being gone a year or so after. Meanwhile, fleet refurbishment is going well. All the big regional jets now have First Class seating onboard, and the A330-300 Envoy (business) Class upgrade to the flat bed will be completed by the summer.

Employees
There actually was a really interesting discussion about everything US Airways does to communicate with employees. There are a surprising number of tools in the arsenal. Some are publicly available, like an employee Twitter feed. Others, like webcast employee group discussions, are not. But it’s safe to say that US Airways does invest a lot of time into trying to communicate. (I’d be curious to know how current employees feel about its adequacy.)

While I was live-tweeting the event, the one tweet that got the most action was one talking about one of the employee-support programs that the airline offers. For every 50 hours an employee donates to charity, US Airways will donate $500 in travel to that group. I like it. There are a myriad of other incentive and award programs that the airline puts out for employees to be able to benefit personally as well.

PreferredAccess
US Airways has now started to sell premium services as an ancillary revenue benefit. So you can buy PreferredAccess for your flight, and that includes premium check in, security lines, and boarding.

Wifi
US Airways also announced that it will expand wifi from just being on A321 aircraft to being on the entire Airbus narrowbody fleet. In addition, it will put it on the Embraer 170/175/190 fleets as well. The 737s won’t get it, but they’ll be gone soon enough. More interestingly, the only other large regional jet in the fleet, the CRJ-900s operated by Mesa, won’t be getting it either. I asked why that was the case, especially since those just got First Class along with the others, and the official line was that it’s easier to pick one new fleet type at a time. So we might see it later. But I will note that the contract for those Mesa jets comes up in just a couple years. Maybe there’s not enough certainty about whether they’ll be kept around or not.

As part of this, US Airways will also add GogoVision, the onboard offering that allows you to watch movies directly on your device. This, along with a better antenna, will be added to the fleet. Completion is expected by the middle of next year. Unfortunately, during that time there will be no indication of whether or not your flight has wifi so it will be a crapshoot until the fleet is done.

Like I said, not a ton of news, but just more of US Airways doing what it does best these days – run a good, profitable airline. With any luck, next year’s media day will be much more exciting. Maybe it’ll be in Ft Worth . . .

Jamie sees American’s revenue problems as a “decade-long marginalization of its domestic market.” What’s particularly interesting about this is that it has nothing to do with the local markets in the cornerstone plan, where American is trying to strengthen itself in its five key markets of LA, Dallas/Ft Worth, Chicago, Miami, and New York. Instead, it actually shows how the cornerstone plan is insufficient in serving the rest of the US. The idea is that with consolidation, Delta and United can now service non-hubs much better than American simply because of all the possible connecting choices going every direction.

Over the last couple of years, American has lost ground with its unit revenue when compared to competitors. Part of this, Jamie blames on American’s less the competitive schedule in non-hubs. Using a list of “small to moderate East Coast cities,” Jamie shows how inadequate American can be. Jamie used Buffalo in his example, probably because of the stark contrast in that market, but I’ll even go off the list. Let’s look at Knoxville, Tennessee. Here’s how service breaks down.

As you can see, thanks to consolidation, both Delta and United have ample service to get people anywhere in the US and into the global network. American? Not so much. For travelers heading west or north, there’s Chicago and Dallas. But what about those who want to go to the northeast? Nothing. Europe? You’ll backtrack through Chicago or Dallas and its more limited options. Plus, that longer journey time will make the options appear lower in reservation systems. What about intra-South? Nada. Even American’s Latin America stronghold loses out. American is pulling its single daily Knoxville to Miami service this April.

While there are a lot of cities you can pick that show the same exact thing, I picked Knoxville for two reasons. One, it wasn’t even on the JP Morgan list so it shows how easy it is to find these opportunities. Two, it’s the aircraft used that make this very telling.

American likes to blame all its problems on not having scope clause relief. It needs to outsource 60-90 seat airplanes so it can compete with the ones that Delta and United have, right? Well, Knoxville is mostly full of fifty seaters. In fact, every single United flight in there is on a fifty seat airplane which American could use if it so chose today. Delta has three CRJ-900s and 1 DC-9 in there, but everything else is on a fifty seater.

Maybe American want to argue that it needs enough larger aircraft capacity elsewhere in order to generate the connections to even be able to fill more fifty seaters on this route. I’m not sure I buy it, but let’s say that’s true. Then what?

American can add seats to Dallas and Chicago if it wants, but that doesn’t solve the problem. Sure, a Miami flight could come back, but I don’t think that Miami is where American really wants to see much in the way of larger regionals. The Latin market primarily needs larger airplanes that American operates today. If American wants to add more domestic flights from Miami on larger regionals, it could, but that’s still not a good connecting point for intra-South traffic. (And those ever-rising Miami airport costs will put serious pressure on those flights anyway.) Lastly, there’s New York. There aren’t really slots to be had in New York, so even if American wanted to connect that up, it couldn’t without either making it go at a bad time or giving up another flight.

How can American fix it? Well, merging is one answer. There has been talk of both Delta and US Airways as dance partners. Let’s focus on US Airways since I’ve heard so many people suggest that the route networks don’t really match up. US Airways gives American Philadelphia, and that is a good jumping off point to other cities in the northeast as well as to cities in Europe. Looking for intra-South connections? Charlotte will do the trick. In fact, Charlotte is so close that it can act like Atlanta. It’s a good hub to connect just about anywhere. That not only makes American competitive, but it probably leapfrogs it ahead of United in Knoxville.

That is just one example of the potential power of a merger. It makes American much more relevant for people in cities on both sides of the US. As Jamie notes, American is still strong in the Midwest. With Dallas/Ft Worth at the bottom and Chicago/O’Hare up top, that’s no surprise. But it’s the east and west where American lacks enough presence. Anyone remember the codename of the US Airways/America West merger? Project Barbell. That’s because it was strong on the coasts but not in the middle . . . . Sounds like a good fit to me.

Unlike Delta, US Airways is going with a phased introduction of new flights. Of the 42 slot pairs that it’s getting from Delta, it looks like it’s only announcing what will happen with 26 of them. I’m told by the airline that more will be announced in February. Meanwhile, Delta has already shown which flights will be getting the axe, so we have a pretty good picture of what’s happening. Here it is.

Now, I pulled all this up by hand, so there could be a couple of issues with the number of frequencies in some of these markets, but you get the idea. I’ve highlighted the most interesting ones to me in green.

As expected, Delta is pulling out of every market save for its hubs with one little exception. Want to guess which one that is? It’s Lexington, Kentucky, where it appears Delta will continue to have 1 daily flight on a CRJ. Why? I have no clue. Maybe there’s something special about that particular slot which will keep Delta serving that market, or maybe it was just an oversight and will be removed shortly. Regardless, other than that, there are no other non-hub flights for Delta.

That includes the ditching of all flights between Boston and Washington/National, a market which has probably suffered greatly with JetBlue in there. There’s plenty of room for US Airways and JetBlue in there, but it was probably a little too crowded with Delta anyway. There’s also a noticeable reduction in flights to JFK. I assume that’s because Delta is really trying to shift domestic flying over to LaGuardia. It doesn’t need as many flights to JFK anymore.

But let’s get to the meat of this story. What is US Airways doing? It is not following Delta by ramping up service in larger markets. Instead, it’s really serving some of the little guys out there. Look for flights to Fayetteville and Jacksonville . . . North Carolina. There will also be service to Ft Walton Beach, Pensacola, and Tallahassee in Florida. These are cities that have been begging for service to the nation’s capital and now they’re getting it. I imagine a lot of this is actually military traffic, come to think of it.

The upshot here is that US Airways is really bringing some great new service to smaller cities, a rarity today. That does mean that some of the cities Delta abandons will truly suffer. Des Moines and Jackson (MS) are the big losers here; they lose their only nonstop to National when Delta pulls out. Unless US Airways adds them in the next round of flights announcements, they’re out of luck.

Mid-sized cities Charleston (SC), Columbus (OH), Jacksonville (FL), New Orleans, Providence, and Tampa will all keep the US Airways service they have today, but they won’t get more flights. They will, however, be losing Delta as nonstop competition. That’s bound to impact fares to some extent. Grand Rapids and Madison are losing Delta as well, but they have new service from Frontier coming in just in time. That actually might turn out to do alright.

It’s funny to see big cities like Miami lose Delta service but not get US Airways in return. That’s probably a smart move on the part of US Airways. The airline doesn’t want to serve every big city from National. It wants to serve every city it can serve profitably. The high costs and massive frequency and loyalty advantage held by American in Miami probably make it worth avoiding.

But what will the next round of adds bring for US Airways? Great question. I would assume that the airline wanted to add the routes it thought had the most potential first, but there could be more in the next round that will surprise. Maybe we’ll even see some summer seasonal stuff, I don’t know. Either way, it seems to be a very methodical process for the airline, somewhat different from Delta in New York.

With Delta, it seems like it has an idea about which cities need to be served from New York in order to “win” the town. The airline made the flashy announcement so it could make its mark. For US Airways, however, it’s really a market-by-market decision based on viability, with no effort to “win” a city. Not quite as flashy, but it gives great insight into the amount of demand to different cities from Washington.

I look forward to seeing what’s next.

George is in the middle of a holiday trip where the flight out was on United and the return on US Airways. It was booked on Orbitz, but he had two problems. The first was that his United Mileage Plus numbers weren’t showing up right with US Airways, and second was that after his upgrade cleared on United, that flight disappeared from the Orbitz reservation.

For the Mileage Plus numbers, I called US Airways directly and the airline had them showing up as Dividend Miles numbers. They fixed how Orbitz had inputted it and everything was fine. For the upgrade problem, this has happened a lot with United lately. It shows up fine in United’s system, and that’s all that matters. In other words, George’s reservation was fine all the way through. But the lack of good communication from Orbitz just made things worse.

Again, a straightforward email. But this time, he gets a personalized response from someone different.

Holy crap. Other than a passing mention of the real problem here, it’s not addressed. Instead, she gets distracted by the now-resolved Mileage Plus issue incorrectly saying that there are US Airways Dividend Miles numbers in the reservation. Not true.

Really, all he needed was that last paragraph, but at least there was finally an end here. The good news is that United had everything looking right for his United reservation (he had no troubles on the flight out) and US Airways has everything set for his US Airways reservation, so it’s all good.

But what a frustrating customer service experience.

The first thing to clear up is the basic philosophy. You’re not going to see American turn into US Airways if this happens, though you’ll hear plenty of speculation along those lines. The management team isn’t tied to any model in particular; it’s tied to making the best out of each situation. When this same team came from America West to take over the old US Airways, it realized that its best hubs still couldn’t match the revenue production of the power hubs that the Big 3 operated. So it had to focus on keeping costs down in order to remain profitable.

That is not the case at American. This would look more like American than US Airways when all was said and done. In fact, I’m sure it would still be called American and you’d probably still see the headquarters in Dallas Ft Worth. If this sounds similar to when US Airways tried to take over Delta, it is. We just never got to see what they could have done with Delta.

What would they do with American? There are so many things that run through my head. You can bet that plenty of airplanes in the fleet would be sent packing. Eagle would have to be sold off if anyone would even want to buy it. If not, it might just be shut down. That wouldn’t surprise me in the least. And who knows what would happen to the maintenance division. Big changes, I’m sure.

From a network perspective, there’s a lot that can be done. I don’t imagine we’d see dramatic changes in Chicago, Dallas, Philly, and Washington, but other places would probably look at lot different.

In the southeast, the airline could get Charlotte and Miami to play off each other. Miami gets more of the Latin/Caribbean flying that it excels at supporting and Charlotte continues to be the only true competitor to Atlanta for southeast US flying. Those two hubs can work very well together.

As costs rise to somewhere between US Airways and current American levels, Phoenix will likely be scaled back, but the operation there will allow American to pull back in LA a lot. There is no reason that those big regional jets should be flying around there. LA should really just focus on the big business markets that American needs to serve for its corporate clients.

Then there’s New York, where the biggest changes may occur. American is not a truly major competitor in New York anymore. I would actually suggest that American keep the slots needed for major business destinations, but then sell off the rest to JetBlue and enter into a stronger partnership. This is kind of funny, because had US Airways not just traded its La Guardia slots, it might be a different story.

Today, a full quarter of its JFK slots are used for Latin/Florida/Caribbean (and I’m excluding Miami hub flights from that). These are markets that are better served by JetBlue. There are also a bunch of one-off RJ flights feeding the small European bank. Kill ‘em. American simply is not going to compete with United or Delta in New York as they continue to bulk up, so it’s time to focus elsewhere while keeping only the routes that are commercially necessary.

But I’m getting off track. Maybe I’m off base with these changes, but the point is that when you get a smart management team like the current US Airways group in there, they will review everything and do what needs to be done. There isn’t much route overlap, but there is opportunity to optimize what’s out there without question. That’s exactly the kind of sandbox that these guys need. This team isn’t bound by tradition or legacy – they just want to make a better, more profitable airline. They’ll make the hard decisions that the current team likely won’t even consider.

A team with a track record like the current US Airways team will find plenty of money pouring in from the outside to help its cause, and that’s huge. If US Airways starts losing money again thanks to rising fuel, dropping demand, you name it, it doesn’t have much ability to raise more cash on its own. But it would have plenty of money being thrown at a merger with American, and that would give the combined airline some great breathing room.

Remember, these guys never put an airline into bankruptcy. They’ve relied on some skilled financial wizardry to make things work. Doug took over at America West right before September 11 and successfully steered the airline into a federal loan guarantee to keep the airline afloat. The feds made their money back on that one after the airline turned around. (I was quite proud to be a part of that.) Then they pulled US Airways from its last and final bankruptcy (it wasn’t going to escape alive) only to turn it into a modestly profitable success.

Just think what they could do with American.

Many, seem to think that this wouldn’t work because of the US Airways track record in dealing with labor. Oh please. The biggest labor problem at US Airways is that the East pilots went out on their own and trampled over the West thanks to their greater numbers. The issue is within the labor groups, not with management even though many like to point their fingers the wrong way.

A merger with American would fix that right up. The 5,000 US Airways pilots would be quickly outnumbered by the roughly 10,000 American pilots and there might actually be a chance at finding labor peace with a unified union running the show. (I said “a chance.” The American pilots have been pretty irrational in their own right.) But it’s not any worse with the US Airways folks in there than it is without. American is a mess today, and labor relations can’t get much worse. I’d say they could get better with a chance at stronger revenues (which means the potential for profit sharing) and a new team to sweep out the old baggage.

At the end of the day, the industry would end up with a leaner, meaner, and more competitive American Airlines. For travelers, it would mean a better network, undoubtedly a better onboard product, and just a better airline in general. It would add some of the strengths from the US Airways network along with a management not bound by any preconceived notions about what can and can’t be done. It would strengthen oneworld as a competitive alliance while putting a little dent in Star’s US coverage.

Is this even possible? I have no clue. We’ll see how the bankruptcy proceedings unfold. But I think it would be the best possible outcome. Now it’s your turn to rant about why I’m wrong . . .

That was frustrating, of course, and it got me thinking about ways to improve the customer experience in weather disruptions. (I’m not talking about onboard delays, though that was on the news this past weekend.) Most of my ideas would never fly, but there was one that I think makes sense: the retroactive refund.

I don’t want to single out US Airways, because they all have similar policies. When a weather event like this becomes a possibility, airlines issue a weather waiver, which is basically a one-size-fits-all policy that is just about worthless for a large chunk of travelers. The weather waiver nearly always says the same thing.

• If you are scheduled to travel on a day that is expected to be impacted by bad weather, you can change your flight without penalty to a day or two before or after your scheduled flight as long as you keep the same departure and arrival cities.
• If your flight is canceled (as with any flight that’s canceled), you can get a refund.

Some airlines extend the change period up to a couple weeks at times, but the problem is the same. This is completely useless for people who are either attending a specific event or people who don’t have a flexible schedule. For them, they either go as planned or they don’t go at all, so the waiver never applies.

It gets really tricky when there are other aspects to the trip involved. Maybe the hotel has a 2 day cancellation policy. Maybe you need to give more notice to people you’re meeting with. Maybe you need to make alternate plans with adequate notice. There is a lot at stake, and when the airlines grind you down to the last minute, it can be a real problem.

For some people, it becomes a gambling issue. If it looks like the weather is going to scuttle your flight but the airline hasn’t canceled it yet, you have to make a decision. Do you cancel the hotel to avoid a penalty and then just eat the $150 change fee on the plane ticket? Or do you wait until the flight cancels and hope the hotel will be forgiving? Some might say that people should just wait because they don’t know if the flight will even cancel at all. That makes sense in a vacuum but with so many moving parts, it can often make sense in a situation like this to just scrap the existing plan and make alternate arrangements.

But for people on a budget, it’s worth trying to see if the flight will cancel in order to get a refund instead of throwing $150 down the drain. That means they sit on seats they don’t plan on using, just hoping to get their money back. Can the airlines improve on this?

We all know how the airlines think. It’s all about revenue. The airlines don’t want to give up any revenue that they already have, so they aren’t going to let people off easy. They’ve created a system that effectively traps travelers until the flight is canceled, and I can’t really blame them for doing it. I do, however, think the retroactive refund would help.

This doesn’t solve every problem, but it’s the only way I can see to make things better for travelers without having a largely negative impact on the airline’s revenue. (And we know that if it’s revenue-negative, the airlines won’t even consider it, even if it makes good sense from a customer service perspective.) Here’s how I envision it working.

• When a major weather event is predicted, airlines continue to issue a weather waiver as they do today. If people do have flexible travel plans and can take advantage of the offer to change by a couple of days, then that’s great.
• For those who aren’t helped by that, they can still just walk away and pay the $150 change fee BUT if the flight does cancel at a later date because of that weather issue, then the airline will give them the refund that they would have had if they had waited.

The customer benefit is obvious. If the customer sees a hurricane bearing down on his destination, he can cancel his ticket knowing that if the flight does cancel, he’ll still get that refund that he would have just waited around for nervously all week. If the hurricane goes a different way and the flight operates, well, then it’s a gamble that lost and the traveler is out $150. But that’s ok because it still gave him the flexibility to make the decision earlier on his own time without leaving anything on the table.

Now, the harder part to quantify is the benefit for the airline. Only those with access to airline data could really figure out how this looks from a dollar perspective, but there are very clear potential benefits.

Those people who would have paid the $150 fee to make a change might now get a refund instead, and that’s a loss. But there is also a potential for gain. Those who sat around waiting for the flight to cancel are probably squatting on seats they might not use anyway. They just don’t want to pay the change fee so they hope it cancels. These people would now cancel early, freeing up a seat that can be re-sold or used to reaccommodate passengers if the flight operates. If it doesn’t operate, then at least the person will already be removed from the system. One less person who needs immediate help when the reservations group is probably feeling overloaded.

This doesn’t solve every problem but it would help. Any other ideas out there on how to make this process better for travelers?

And I thought I’d throw in a bonus topic this week for its insanity. Not sure how much readers know about Stelios Haji-Ioannou, but he is the man behind the “easy” name. The best known easy brand is easyJet, one of the largest airlines in Europe. While Stelios is still the largest shareholder, he doesn’t run the company. He has, however, inserted himself at times and made life difficult for all involved. Now, it appears he’s fed up and wants to start a rival airline, Fastjet or E-jet, to compete with, um, the airline he owns a big chunk of? Riiight. This one is just downright silly.

According to USAPA’s website, here’s what happened that day:

• When pushing back from the gate, the auxiliary power unit (a backup source of electrical power) and the Hot Battery Bus (a critical source of primary electrical power) both failed – in other words, the plane had no electrical power and no radio communications. None.
• After opening a window to verbally call down to the ground crew (the Captain’s only option), US Airways maintenance was able to restart the power unit, but offered no explanation as to why it failed or any reasonable assurance that it wouldn’t fail again.

So we have a couple issues here. US Airways did a thorough review to see what happened. According to the letter from the US Airways VP of Flight Ops that I’ve obtained, the airline tried to meet with the captain in person to discuss the review but she was unwilling. So they put the results in writing to her.

On the issue of the APU failing, no problem was ever found. The APU (auxiliary power unit) is like a mini-engine which provides power when the engines aren’t running. This is actually used to start the engines on the ground, but it’s not necessarily required for flight. If you’ve ever seen an engine started while you’re at the gate with a big generator nearby, then that’s probably a case where the engines needed an external start because the APU wasn’t working.

Back to this incident, the first entry in the logbook from the captain said “APU failed at gate, unable to restart.” According to US Airways, the mechanics did a test that found no fault with the APU and then proceeded to restart it at the gate without any trouble at all. The captain said she wouldn’t accept the aircraft unless the APU was fixed, but since the mechanics couldn’t actually find any problems that needed fixing, they deferred the issue as permitted by the maintenance program.

That was followed by a second entry from the captain saying:

After APU Auto Shutdown on gate with no external power connected, battery power lasted 3-4 minutes. Unable to restart APU or communicate on VHF [radio] #1.

So the APU failed and wouldn’t restart. US Airways pulled the Electronic Control Box (ECB), which the airline describes as the “brains of the APU.” The ECB records any abnormal events to help with maintenance. So the airline sent the ECB to Diehl Aerospace, which is described as “the repair subcontractor for Honeywell (the manufacturer of the APU).”

Upon review, no auto shutdown nor any failed attempt to restart the APU was recorded. Could the ECB have failed to record the incident? Unlikely. It recorded minor issues before and after the event so it was functioning properly. Diehl sent the ECB back saying no problems were found, and that ECB went back into service with no further issues. The APU apparently was working just fine.

But what about the radio not working? Was there an issue preventing that from functioning properly? Well, that assumes that the APU did shutdown. All we know for sure is that the APU didn’t automatically shut down. But as US Airways notes in the letter, “the ECB does not record a ‘commanded’ shutdown.” So maybe there was a commanded shutdown by someone on the aircraft? I have no clue because it’s not spelled out, but let’s assume that the APU was in fact shut down for one reason or another. What about those other issues that followed?

Apparently the airplane worked as designed. When on the ground, if the engines aren’t on, the APU isn’t on, and there is no ground power (basically, when the airplane is plugged in to a source at the airport), then the batteries will power many of the electronics. But there’s a catch.

To avoid completely draining the batteries while on the ground, the system will cut battery power when voltage drops below 23V for 16 seconds and the airplane is on the ground. When that happens, that VHF radio #1 won’t work. So that’s probably what happened here, and it worked as designed. Was the battery draining too quickly? Not according to US Airways. The airline says “the two main batteries were . . . tested by an outside source and have also been returned to the Company with no faults found.”

So the APU worked, the batteries worked, and the airplane in general seemed to work as advertised. The only thing I don’t see mentioned is anything about the “Hot Battery Bus” not working. The only mention of the hot battery bus in the letter is this:

. . . The [automatic battery shut off on the ground] will not disconnect the batteries when either one is discharged below 23V while in the air; they will continue to power the hot battery buses, DC BAT bus, DC ESSENTIAL bus, and the AC ESSENTIAL bus as long as possible.

So that seems to say that the bus (or buses), which provides continuous power to vital systems, was working. But no further mention is made beyond that. In short, US Airways says “this aircraft performed exactly as it was designed.”

Does that mean the captain fabricated what happened? I wasn’t there, so I don’t know. The only clue we have is from the US Airways letter which says “there is no discipline contemplated” after reviewing this incident. US Airways says it just wants to “put closure on the incident.”

It seems to me that if a pilot fabricated a maintenance problem, and it was proven conclusively, then that would be grounds for discipline of some sort, right? So since there is no disciplinary action here, maybe they’re chalking it up to a misunderstanding or confusion about the situation. Either way, it puts a serious hole in USAPA’s ongoing campaign to question the airline’s safety procedures.

[777 (not an A330) APU exhaust photo via Flickr user Robbie 1/CC 2.0]