"HIA official sees more turbulence for airlines"

Sunday, February 6, 2005

HIA official sees more turbulence for airlines
By Ellen Lyon 
The Harrisburg (PA) Patriot-News
 

Although more travelers have used Harrisburg International Airport in the
last few years, it's been a bumpy ride for the airlines that served them. 

As for the future, airport Aviation Director Fred Testa has a few
predictions for the airline industry in general and HIA in particular for
2005. 

He suggested that US Airways and United Airlines may emerge from bankruptcy
into a consolidation. "I wouldn't be surprised if we saw some sort of merger
like they tried five years ago," he said. 

Although passenger traffic at HIA increased more than 5 percent in 2004, HIA
officials predict 2.5 percent growth this year. Testa, however, thinks it
could be as high as 7 percent. 

"Hopefully, we'll have another airline or some extra service by the year's
end," he said. 

Even as the major airlines struggle to right themselves by cutting costs and
changing work rules, he said disruptions may continue because of fuel
prices, fare issues and the political situation in the Middle East. 

"They were forced by market conditions to make changes they were loath to
do," Testa said of the major carriers. "Finally, reality has set in. No
longer will you find airline executives with big golden parachutes." 

Testa also found hope in the recent successful election in Iraq. 

"If the terrorists could not mount a sustained attack, then everybody's
fears are lessened," he said. 

US Airways, the dominant carrier at HIA, had nearly a 34 percent share of
the market in 2004, down from more than 50 percent a decade ago, Testa said.


The airline's second Chapter 11 bankruptcy filing last year stalled plans to
replace some of its smaller turboprop planes, including those flown out of
HIA, with larger regional jets with more seats. It also cut two of its
flights out of HIA. 

"We have shrunk as an airline," US Airways spokeswoman Amy Kudwa
acknowledged. 

Since the Sept. 11, 2001, terrorist attacks, US Airways has reduced its
flight schedule nationwide by about 30 percent, she said. However, the
airline added 245 flights just this month, Kudwa noted. 

"So now we're focusing on a plan of growth," she said. 

US Airways also downgraded its hub in Pittsburgh, which means it has more
flights from HIA to Philadelphia instead. 

Testa said central Pennsylvanians don't like to pick up connecting flights
out of Philadelphia because it is the second-most delay-prone airport in the
country, "and more often than not your bags disappear." 

Travel agent Helen Bowman at Liberty Travel in Lower Paxton Twp. said she is
booking as many US Airways flights as ever. But it takes more "coaxing"
because the bankruptcy has alarmed people, she said. 

Bowman said she isn't deterred from scheduling vacation flights on US
Airways months in advance. She just tells clients to pay for the tickets on
credit cards because that affords them certain protections if the company
liquidates. 

It's not as if the other airlines are doing a whole lot better. United
Airlines, the second-busiest carrier at HIA in 2004 with nearly 19 percent
of the market, also is operating under bankruptcy protection. 

Third-place Delta Air Lines, which posted an industry-record $5.2 billion
loss last year, and fifth-place American Airlines narrowly avoided
bankruptcy by getting employee concessions. 

Both Delta and United have increased passenger loads at HIA since 2001 by
adding flights and seat capacity. 

In an effort to attract more customers nationwide, Delta announced early
last month that it was reducing by up to half its most expensive fares and
eliminating an unpopular Saturday-night stay-over rule for cheaper tickets. 

Several midstate travel agents said they haven't noticed any increase in
demand for Delta tickets. 

American Airlines announced it, too, would sharply reduce fares and
penalties. Continental Airlines, Northwest Airlines, United and US Airways
followed suit in select markets. 

"Where there's competition, you'll find decent fares," Testa said. 

Last fall, US Airways announced simplified fares, some as low as $89, from
HIA to seven western destinations.


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