AmWest vows to fly right

By Dawn Gilbertson and Peter Corbett

July 28, 2000 Web posted at: 2:34 PM EDT (1834 GMT)

In this story: Quick fix Analysts, regulators approve Unions not impressed RELATED STORIES

TEMPE, Arizona (The Arizona Republic Online) -- America West Airlines, facing unprecedented customer wrath and lost business for repeated delays and cancellations, is cutting flights and beefing up maintenance and baggage operations in a dramatic bid to improve service.

The moves come a week after the Tempe-based airline, the nation's ninth-largest, reported a drop in second-quarter profits due, in part, to service snafus.

It was the second straight quarter the airline's bottom line has taken a hit from flight problems. The service shortcomings go back much further, however: America West has ranked at or near the bottom of industry on-time rankings for more than two years. Maintenance issues also got the company into trouble with the Federal Aviation Administration, culminating in a $2.5 million fine two years ago.

"The issue here is we haven't been operating a reliable airline," said Doug Parker, America West president. "We have been working as hard as we possibly could to figure out what the issues were and to get them addressed."

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America West came up with a long list of fixes, detailed in a major announcement Thursday. Most center on maintenance operations, the root of its flight delays and cancellations. The company said it plans to temporarily add two maintenance lines, increase overnight repair teams and automate spare-parts routing.

Those moves will take time to show up at the gate, so America West also came up with a more immediate fix: fewer flights. Beginning Tuesday, the airline will temporarily cut its daily flight schedule from 880 to 863 to free up four more planes to serve as spares. That will give America West a total of eight spares.

"We're going to have extra aircraft sitting on the ramp," Parker said. If there's a problem with the scheduled aircraft, "that plane will roll up and take customers," he said.

America West is cutting only one route: Columbus, Ohio, to Los Angeles. The other cuts will involve reduced frequencies. For example, the number of flights between Phoenix and Kansas City, Mo., and between Phoenix and Oakland will be reduced from five to four per day. Affected passengers will be notified and rebooked.

Parker promises that America West customers will notice improvements immediately. He said cutting flights is a "very expensive" way to fix the problem - fewer planes in the air means fewer paying passengers - but acknowledged that America West is left with few choices.

"Our customers and our employees aren't going to give us six to 12 months (to beef up maintenance), and we're not going to ask that they do," he said. "We're going to fix this now."

Valley attorney and sports agent Rick Erickson already ran out of patience with America West. He stopped flying the airline in January after years as a regular customer. Not only were his flights often canceled or delayed, but employees were unsympathetic, he said.

"I don't need someone holding my hand the whole time, but you do expect a little respect," Erickson said.

The last straw for Erickson was when he was late to an NFL players union meeting in Washington because of an America West flight delay.

Wall Street analysts applauded America West's moves, but called them long overdue. The service woes have cost the airline lucrative business travelers in a time of strong demand, they say.

"America West has been struggling to achieve any semblance of operational reliability for close to a year now," said Sam Buttrick, airline analyst with PaineWebber in New York. "Management has been talking about reliability, and now it looks like they're going to put some money into it."

James Higgins, who follows America West for Donaldson, Lufkin & Jenrette in New York, said the moves will hurt the company's profits in the short term, but should eventually pay off.

"As Continental Airlines has found, frequently when you spend a little more money on crucial service-related areas, you more than make up for it on the revenue side," he said. "I think this is where America West is headed."

The FAA praised America West's move. FAA spokesman Roland Herwig said the agency did not order the company to reduce flights, and the moves have nothing to do with an ongoing FAA safety audit of America West maintenance. All of the 10 major airlines are being audited in the wake of an Alaska Airlines crash in January.

FAA officials this winter threatened to block America West from adding planes until it improved its maintenance record, but later backed off.

Key union leaders criticized America West initiatives, saying the moves fall short of what's needed.

"The announcement you have today is not nearly enough. It's the tip of the iceberg," said Roger Cox, head of the Air Line Pilots Association at America West, which is negotiating a new contract.

Bill McGlashen, Association of Flight Attendants local president, said the union is troubled by the flight reductions because it could hurt job security if the flights aren't restored.

Parker said the reduced schedule will be in force until America West's problems are fixed.

McGlashen praised America West for plans to add maintenance and baggage staff but said it should have been done much sooner.

"I wish senior management would listen to the folks that are running the operations and would have listened to them long ago," the union leader said.

Asked why it has taken America West so long to seriously tackle its service problems, at least publicly, Parker said the underlying maintenance issues were complex.

"It's taken us some time to truly understand what is needed to do it," Parker said. America West went wrong, he said, by not growing its maintenance operations along with its flight schedule over the past few years.

The airline has been on a steep growth curve the past five years, adding 47 percent more aircraft and increasing daily flights by 24 percent. Although the reduction in flights means America West will grow by 5 percent rather than the planned 10 percent this year, Parker said the cutbacks don't mean America West is veering from its long-trumpeted growth plan or conceding that it grew too fast.

"The growth has been the absolute right strategy for the airline," he said, citing strong earnings growth until recently. "We haven't implemented well."

Two airlines top forecasts

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