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US AIRWAYS MEDIA DAY
US Airways' headquarters is five minutes from the Phoenix airport in Tempe. I thought it was pretty cool that they actually set up an official media day and brought in 30 journalists from around the country, including outlets like USA Today, Wall Street Journal, Reuters and Cranky Flier to name a few. We were invited to meet with the airline's management people and ask them our hard-hitting questions. To my knowledge, US Airways is the only airline in the country (and possibly the world) to host such an event with the whole upper management team present. As much flack as US Airways gets, including their fair share from me last summer, I have new respect for these guys. I never really thought I'd say that.

THE USCAR AWARDS
It takes guts to put on an event like this and then invite your harshest critics. They had a good sense of humor as they presented those journalists who had made their lives the most miserable with an Uscar Award (the ‘O' in Oscar was replaced by a ‘U' for US Airways). It was pretty funny when they handed out the 10 miniature Oscar replicas. What's cool is that they videotaped the whole day so all their employees could see exactly what was going on. They'll post the video, along with all the speeches made that day including the CEO's, on their employee website. Speaking of the CEO, I had no idea that Doug Parker and the rest of the management team, for that matter, were so young. The large majority of them are in their late 30s and early 40s.

CROSSING THE PICKET LINE
A little refresher: In 2005, a bankrupt US Airways and America West Airlines merged. They kept the US Airways name but kept America West's management and headquarters in Tempe. The transition didn't go all that smoothly, which you're probably aware of, especially if you flew out of Philadelphia last summer … Philly is their main hub. It turns out there are still some lingering problems and I was introduced to them the moment I got out of my taxi. Directly outside the US Airways headquarters were about two hundred picketing US Airways employees. The picketers included pilots, flight attendants, mechanics and other labor unions. They were doing this just for the publicized media day and of course, my taxi driver dropped me off in an awkward spot so to get to any of the entrances, I had to go right through their territory. I had no choice but to walk directly through the picketer's continuous, oval-shaped march. I felt like a trapped zoo animal with glaring eyes fixated on me.

PILOT PAY
The labor unions even brought out an enormous 50-foot inflated rat gripping bags of cash to make their point. The rat, it seems, was meant to represent the company's greed in offering employees minimal salary increases. The main concern was that the "East" (US Airways) and the "West" (America West) have been on separate contracts since the merger. One of the journalists, Runway Girl for FlightGlobal.com pointed out that the US Airways captains and first officers continue to make less than their counterparts at other US majors and some low-cost carriers. It's all depicted on this snapshot from AirlinePilotCentral.com. These guys all took huge pay cuts and did you know that UPS and FedEx pilots are now the highest paid? According to Doug Parker, it's because their business plans work.

CONSOLIDATION
Inside the headquarters, the executives were forthcoming about the carrier's plans. They said their main concern right now is turning a profit. If they can get their flights to depart on time, it reduces costs and provides morale. They claimed that their problems from last summer's debacle weren't due to labor unrest as the media portrayed but rather due to the migration of the reservations system. You see, right after a merger, everything runs smoothly because both airlines are still being run as separate companies. But typically nine to 18 months after a merger is when computer systems are emerged and it's not easy. Doug Parker truly believes that consolidation of airlines is beneficial to everyone and the benefits from the merger with America West were real and significant. "Mergers need to eliminate excess capacity, which causes airlines to lose money on many tickets," Parker said. He talked about how you can't make everyone happy and that management's job is to manage all constituents. When asked how consolidation is good for consumers, he said because they make for a more sound company. Will US Airways merge with another airline? It appears so as Doug Parker says they remain a strong advocate of industry consolidation.

PHILADELPHIA HUB
One way US Airways has begun their goal of making money is to get flights to depart on time from Philadelphia (PHL) and its other hubs, is to offer each employee a $50 bonus when they are listed number one in the DOTs on-time departures for the month. They were #1 in January and they shelled out $1.8 million in bonuses. In addition, they are establishing a "satellite headquarters" in Philly. That should hopefully help out. Their other main focus is dealing with mishandled baggage. Philadelphia needs the most help out of all their hubs and it's also their most important. That's why they're investing heavily into it. Philly has 441 flights a day to 109 nonstop destinations. Thirty-five of them (28 are US Airways) go to international cities. That seems like a lot but a few miles up the road, JFK has 186 international destinations. US Airways has just 20% international operations while their competitors are at about 39%. They want to expand on their flights to Europe so they are relying heavily on their hub-and-spoke model. Geographically speaking, Philadelphia works the best: travelers coming from the south or west would be passing over Philadelphia so it makes sense for them to stop there. One of their grand plans to improve customer service is to put wait times at all points of contact. Now that would be helpful.

A LA CARTE PRICING
Of course the big killer for airlines right now is the price of oil. Did you know fuel comprises 30% of US Airways' expenses? Payroll is second at 26% and rents are the third biggest cost at 13%. Currently, oil is over $100 a barrel (it used to be at $35 a barrel a few years ago) and at those prices, they have to either increase fares or figure out new ways of making money. Hence, they rolled out the $25 fee for a second checked bag, which is expected to bring in $75 million extra annually but only affects 8% of their passengers. The bad news for consumers is that it appears the industry is evolving towards an a la carte pricing model. I won't be surprised when they begin charging for the first checked bag as well or other legacy carriers (not just Northwest) charging for aisle seats and exit rows. FYI: Legacy carriers are the major airlines: American, Continental, Delta, Northwest, United and US Airways.

NEW FLIGHT ATTENDANT UNIFORMS
On a lighter note, I was able to get a sneak peak of their flight attendant's new uniforms, which they will all be wearing by early summer and sampled their new envoy (business) class transatlantic meals.

CHEAP AIRFARES
After meeting the management team and learning about the industry, I can totally understand why these guys are nickel and diming customers. Over the years, airfares have significantly gone down as opposed to up. If you think about it … it's unreal how inexpensive some tickets are, especially for major markets like Los Angeles to New York; sometimes fares are $99 each way! I really don't think the public realizes how good they have it right now.

THANK GOD FOR AIR TRAVEL
Think about it for a second. Our forefathers had the cajones to travel cross-country over a hundred years ago, in a horse-drawn carriage and brave the elements … all for a journey that could take them up to six months. Thank God times have changed and we have automobiles and planes but just imagine for a second if we didn't have the airplane. To drive our cars across the country can be done in what ... three days? Well, if you drive like one of my madman roommates in college, who was half-baked on marijuana and depressed because his girlfriend had just broken up with him, you can do it in two and half days. But I digress ... I don't know about you but I hate driving long distances and if I had to make the 3,000-mile trek, how much would gas cost for the drive? My car gets about 300 miles per tank and it's $60 to fill ‘er up. That's $600 right there and that doesn't include tolls, food or hotel. Even if I packed the car with four people, they would still be spending well more than a plane ticket, have less space for themselves and their luggage and definitely not getting to their destination as fast or as safely. So, before you complain about high airfares or how bad you were treated by the flight attendant, just think about the alternative. We all want things cheaper and better – it's human nature. But come on folks. Let's be appreciative of what we have. Heck, I haven't even mentioned overseas trips but I'm sure glad I made it here to London in just 10 hours and didn't have to take a car and boat.

VIDEO
Sorry, no video this week but we do have all the Johnny Jet videos ever made on YouTube.

NEXT WEEK
Join me next week as we explore London and Heathrow's new Terminal 5, which might just change the way we travel. Stay tuned.

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Happy Travels,
Johnny Jet

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Note: This trip was sponsored in part by US Airways & Camelback Inn





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