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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: May 8, 1997
US Airways Group, Inc.
(Commission file number: 1-8444)
and
US Airways, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware US Airways Group, Inc. 54-1194634
(State of Incorporation US Airways, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
US Airways Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number)
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Item 5. Other Events
On May 8, 1997, US Airways issued a news release announcing
that it will reduce flying on some of its most unprofitable
routes and close excess facilities. The actions are part of its
plan to ensure that it has the strongest possible foundation as
decisions are made about the company's ultimate strategic
direction.
Under the efficiency program, US Airways will remove 22
excess aircraft from its fleet (the last five F28-4000 aircraft
and 17 older DC-9-30 aircraft) and end unprofitable jet service
to nine cities and eliminate other routes that have not been
profitable. Summer 1998 capacity will be reduced by approximately
6.5% on a year-over-year basis (as measured by available seat
miles). Among other actions, US Airways will close its flight
crew base in Los Angeles, consolidate reservations operations by
closing reservations centers in Utica, NY and Nashville, TN and
close maintenance facilities at Greensboro and Winston-Salem, NC
(except for a landing gear shop) and Roanoke, VA.
The company said it will work closely with union leaders and
employee groups to minimize to the greatest degree possible the
impact of changes in operations on individuals, although there
are expected to be some employee furloughs.
US Airways is currently unable to estimate the cost savings,
revenue impact, or possible one-time charges associated with
these actions. US Airways may incur expenses related to employee
severance and asset dispositions, among other charges, related to
these actions.
The news release is attached hereto as Exhibit 99.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Designation Description
- ----------- -----------
99 News release dated May 8, 1997 of US Airways announcing
that it will reduce flying on some of its most
unprofitable routes and close excess facilities.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly
authorized.
US Airways Group, Inc.
Date: May 8, 1997 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
US Airways, Inc.
Date: May 8, 1997 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
(this space intentionally left blank)
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Exhibit 99
US AIRWAYS ANNOUNCES EFFICIENCY STEPS
ARLINGTON, Va., May 8 -- US Airways said today that it will
reduce flying on some of its most unprofitable routes and close
excess facilities. The actions are part of its plan to ensure
that it has the strongest possible foundation as decisions are
made about the company's ultimate strategic direction.
Under the efficiency program, the airline will end jet
service in September to nine unprofitable cities and eliminate
other routes that have not been profitable. These steps are
necessary whether the airline ultimately decides to move ahead on
its hoped-for path to become a global competitor or decides to
become a regional airline. The actions will lead to the grounding
of 22 aircraft. Summer 1998 capacity will be reduced about 6.5
percent on a year-over-year basis.
The company said it will work closely with union leaders and
employee groups to minimize to the greatest degree possible the
impact of changes in operations on individuals, although there
are expected to be some employee furloughs.
The company's plans include:
* Closure of the Los Angeles pilot and flight attendant
crew base by February, 1998, with affected employees being
transferred to other crew bases. US Airways also currently
maintains flight crew bases at Baltimore, Boston,
Charlotte, Philadelphia, Pittsburgh and Washington, D.C.
* Consolidation of maintenance operations. Maintenance
facilities in Roanoke, Va., and Greensboro and Winston-
Salem, N.C., will be phased out beginning in September and
continuing until the end of 1998, except for the Winston-
Salem landing gear shop, which will remain open.
Maintenance operations in Charlotte, Pittsburgh and Tampa
will be expanded to handle work done in the locations
being closed. A hangar in Miami will be closed but
existing overnight maintenance operations at the station
will continue.
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Page Two
May 8, 1997
US Airways Announces Efficiency Steps
* Consolidation of reservations operations. Reservations
centers in Nashville, Tenn., and Utica, N.Y., will be
closed by October 1. US Airways also operates
reservations facilities at Dayton, Indianapolis, Orlando,
Pittsburgh, San Diego, Syracuse and Winston-Salem.
* Closure of unprofitable cities and a trimming of other
unprofitable flying. Cities where jet service will be
ended effective September 4 are Albuquerque, N. M.;
Austin, Tex.; Bangor, Maine; Cincinnati, Ohio; Daytona
Beach, Fla.; Islip, N.Y.; Melbourne, Fla.; Newburgh, N.Y.
(Stewart International Airport ) and San Antonio, Tex.
Other schedule changes are expected in the future. Overall
capacity will be reduced by about 6.5 percent.
* Removal of excess planes from the fleet. The remaining
five F-28s will be removed from the fleet by the end of
the summer, eliminating one fleet type, and 17 older and
expensive-to-maintain DC-9s will be grounded in the coming
months.
In coordinating the actions with unions and employee groups,
the company said it would:
* Work with leadership of the International Association of
Machinists (IAM) both to facilitate transfer of employees
they represent to other work sites and to determine to the
degree possible opportunities for bringing in outside
maintenance work.
* Work with leadership of the Association of Flight
Attendants (AFA) and the Air Line Pilots Association
(ALPA) to mitigate the impact of the changes announced
today.
* Stop new hiring in the ground services and reservations
departments and work with the System Roundtable, and
employee forum, to find ways to maximize opportunities for
affected employees to seek jobs elsewhere in the system.
"While we recognize that US Airways has made great strides
in many areas in the past year, other areas remain unchanged. The
time has come to move ahead by beginning to put in place
operational changes that enable us to become more efficient,"
Chairman and CEO Stephen M. Wolf and President Rakesh Gangwal
said earlier this week in a message to employees, noting that US
Airways' board of directors "has stated that we need to move
forward."
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Page Three
May 8, 1997
US Airways Announces Efficiency Steps
Robert LeBuhn, the senior member of the board of directors,
said, "The upside potential associated with the company's new
business plan is as high as I have ever seen. Without a
competitive cost structure, however, the board will not approve
the very large capital expenditures necessary to grow the
company."
Wolf concluded: "Make no mistake, we remain committed and
hopeful that our labor discussions ultimately will enable us to
put in place a competitive cost structure."
In a recent series of employee meetings, Wolf and Gangwal
said the company is at a crossroads. With a competitive cost
structure, they said, US Airways would move on the preferred path
of growth and of becoming a global competitor. The alternative
path leads to the airline becoming a superior, but smaller
regional carrier.
The company made no estimate of the cost savings it expects
to realize from the steps being taken, or of the one-time costs
connected to implementing them.
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Number: 3264
