Location, Incentives Helped; Land New US Airways Center Airline's Decision

As politicians hailed US Airways' decision yesterday to build a new flight operations center in Moon, gone were the memories of US Airways' 10,000 local job cuts, the elimination of nearly 400 daily flights and broken promises that nearly destroyed a relationship between the airline and local airport officials.

"I know it's been contentious," Allegheny County Chief Executive Dan Onorato said to US Airways President Scott Kirby as the pair stood in front of a ticket counter at Pittsburgh International Airport, where Mr. Kirby announced the coveted $25 million, 600-person project would go to Pittsburgh over Phoenix and Charlotte, N.C. But "we have come a long way."

US Airways' painful decision to drastically cut its work force and flights here following a post-9/11 collapse of the U.S. airline industry was a result of Pittsburgh's poorer economic standing relative to other cities and its unprofitability as a hub. But yesterday's decision -- made by a new management team that took control following a 2005 merger with America West Airlines -- was symbolic of the positive role Pittsburgh can still play for the airline, now based in Tempe, Ariz.

Not only does the Pittsburgh area gain 150 technical jobs paying $50,000 a piece as a result of retaining the flight center, but it retains another 450 it might have lost had the contest been won by Phoenix or Charlotte.

US Airways picked Pittsburgh in part because of its respect for the 450 people who already work inside an operations center in Findlay, one of two centers that track and control all flights for US Airways at computers and on a big display board that tracks flights and weather across the country.

Pittsburgh's proximity to the East Coast was a plus, as well. The U.S. flight schedule begins each morning at 5 a.m. Eastern time, making a center located several time zones to the west more difficult, logistically, to operate. Acting as the "brain" of US Airways, the operations center will be responsible for 1,400 daily mainline flights -- pilots cannot take off or land without its approval.

It also helped that the state and Allegheny County offered a $16.25 million incentive package that includes $3 million in state and county grants, $12.5 million in loans and $750,000 in state tax credits tied to the number of jobs created by the project.

Still, "this wasn't an easy decision," Mr. Kirby said -- particularly with Phoenix reportedly offering $36 million in incentives and Charlotte still serving as the airline's largest hub with 534 daily flights.

Pittsburgh did not increase its offer as it might have in the past to keep a major job center here, perhaps a reflection of being burned in the past but also a recognition of the behind-the-scenes work done by Allegheny County Airport Authority Director Kent George.

Mr. George, observers said, was the person who pulled it all together, but as is his style, he remained in the audience at yesterday's airport news conference, while Gov. Ed Rendell and other politicians and executives stood in front of the microphones and cameras.

"Pittsburgh deserved this," Mr. George said.

The upbeat attitude of Mr. George yesterday was perhaps the clearest indication of improved relations between Pittsburgh and its largest air carrier. It was Mr. George who worked with US Airways through its two bankruptcies, as it stripped Pittsburgh of its hub status and slashed flights and close to 10,000 jobs -- it employs 2,700 now, down from 12,700 prior to 9/11.

The low point in his relationship with the airline came in March 2003, as US Airways emerged from its first bankruptcy and rejected its leases with the airport authority, the airport's owner and operator, 21 minutes before escaping bankruptcy protection. Local aviation officials, caught off guard by the move, later referred to the action as a "stealth attack" and claimed the 11th-hour decision violated a promise made only weeks earlier. "We were lied to," said airport authority solicitor Jeff Letwin, in 2004.

When US Airways merged with America West, though, the relationship improved dramatically. Just before the deal was closed in 2005, Mr. George met with the new management team, led by 45-year-old Doug Parker, and "that is when the tide turned," Mr. George said. He liked the fact that Mr. Parker was honest, even blunt at times. "When he couldn't do something, he let you know he couldn't do something."

Another step forward was a five-year lease US Airways signed last year to do heavy and overnight aircraft maintenance work at Pittsburgh International, bringing some stability to the jobs of 1,200 area airline maintenance workers.

The leadership, Mr. George said, is "respectful, above board, truthful and clear. Very direct -- that's good."

US Airways intends to break ground on its Moon operations center later this year. It selected a 10-acre site off Ewing Road on property owned by Allegheny County.

The center will be ready in 2008, but the first full day of operation will not be until early 2009. US Airways has agreed to a 20-year lease with two 10-year options. It also will have another 20,000-square-foot building nearby as a backup center.

Pittsburgh was such a strong candidate for the center that a proposed takeover of Atlanta-based Delta Air Lines -- a bid rejected by Delta creditors last month -- would not have made any difference in the decision announced yesterday.

"We would have still put it here," Mr. Kirby said.



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