US Airways will hire 1,000 to address service woes

Still struggling to repair the damage from its service problems this winter, US Airways announced plans today to hire 1,000 employees at its hub airports and upgrade the amenities on its flights.

Although the airline made money in the first quarter, US Airways' senior executives said they would have done better if they had not been forced to cancel or delay thousands of flights because of two winter storms and a poorly executed switch in computer reservations and ticketing systems March 4.

Most of the 1,000 additional employees will work in the Philadelphia and Charlotte, N.C., hubs, and are needed to help with the normal increase in passengers each summer and to compensate for workforce attrition, the officials said.

Chief executive officer Doug Parker, speaking to analysts and reporters on a conference call, said the new hires were not expected to increase US Airways' expenses much. "We think they'll help us reduce our costs," he said, "because there's nothing more expensive than running a bad operation."

The airline - Philadelphia's largest, with more than 60 percent of passengers and flights - announced the initiative at the same time it reported a $66 million first-quarter profit, with almost half the earnings coming from special items.

US Airways said it also had begun replacing 600 of its airport self-ticketing kiosks, which did not work properly after the reservations switchover, resulting in delayed or canceled flights and long waits for days afterward for passengers who had to be rebooked.

US Airways already is hiring the airport workers so they can be trained by the time passenger traffic increases during the summer-vacation season, Parker said. The airline now has 36,000 employees, but because of attrition the total this summer will not be much greater, he said.

Starting pay for US Airways airport workers ranges from $7.50 to about $10 an hour.

The airline said it would create "passenger operations control" centers at its Philadelphia and Charlotte hubs, and at Boston Logan and Washington National airports; it already has one such center at its Phoenix hub. About 80 employees will work in the new centers.

The control centers will monitor airline operations to identify customers on inbound flights who may miss their connections, rebooking the passengers on other flights before they land, the airline said. Passengers will be met at the gate by airline employees, and given their new flight information and boarding passes, or hotel accommodations and meal vouchers if they cannot be booked on another flight the same day.

In recent years, US Airways has accumulated one of the airline industry's worst reputations for service, particularly for baggage handling in Philadelphia. Passengers often endure long waits at airports or on the phone for help with lost bags or rebooking when flights are canceled.

On board its airplanes, US Airways said it would improve the quality of its food and beverage offerings in all classes of service on both domestic and transatlantic flights, including offering more and better meals for sale in coach. It also will install in its transatlantic jets more business-class seats that recline into nearly flat beds, and upgrade its in-flight video and audio entertainment systems.

In its quarterly financial report, US Airways said its profit of $66 million, or 70 cents a share, compared with a profit in the same quarter last year of $64 million, equal to 75 cents a share at the time. Excluding special items, net income was $34 million, or 37 cents a share. Revenue in the three-month period was $2.7 billion, 3.8 percent more than the $2.6 billion in the first quarter of 2006.

US Airways said the rising cost of jet fuel would have "a material effect" on its outlook for the rest of 2007, pushing up costs by $300 million over what the company had budgeted at the beginning of the year. The airline expects to make money in the second quarter, but revenue is likely to be flat compared with a year ago, the officials said.

Parker said that the company was making progress on getting new labor agreements with unions representing its pilots and flight attendants, but that there still was a "relatively big gap" between what the employees believed they should make and what was affordable.

The US Airways chapter of the Air Line Pilots Association has scheduled informational picketing tomorrow near the airline's Philadelphia International Airport ticket counter to protest the slow progress of the negotiations and recent bonuses given to senior executives.

The quarterly results exceeded analysts' expectations. US Airways stock declined by $3.32, or 7.8 percent, closing today at $39.33 on the New York Stock Exchange