Air Transport World

BAe challenges USAir's claim of high 146 operating costs. (British Aerospace 146-200 Jet transport, USAir Group Inc.)

USAir's grounding of 18 British Aerospace 146-200s for "unacceptably high operating costs" was challenged as misleading by the manufacturer in a recent in-house study that took a swipe at the management abilities of a customer airline.

BAe cites a number of reasons for the grounding of the aircraft, including the narrow scope of the 146 California operation, excessive engine-maintenance costs charged by USAir's subcontractor, Pacific Southwest Airmotive, and the lack of effective competitive marketing strategies in the California market, which contributed to a steep market-share decline from 52% in the third quarter of 1987 to 32% in the second quarter of 1990. USAir's 146s operated only in California. The airline's lack of marketing acumen was heightened because it didn't establish hubs in California, as did American Airlines, which acquired Air Cal in late 1986, and United Airlines, said BAe.

BAe's report is a compilation of Form 41 data and additional information supplied by the manufacturer and other sources.

"The question remains, if unacceptably high operating cost' is the sole reason that the 146 is not accepted by USAir, why then, was the decision made to pull out of markets also operated with the 737-300?" the report asks. "Furthermore, why did USAir the Fokker 100] in place of the BAe 146? Firstly, USAir did not severely cut its West Coast service because of the operating costs associated with the 146. Secondly, the competitive nature of the region has pushed coach fare dilution to 70%. The resulting unreasonably low average fares have forced USAir's 146 yields down to a point where profitability is difficult regardless of the aircraft utilized."

BAe found West and East Coast yields of 20cts and 35cts per statute mile, respectively. While costs per available seat mile were even at 12cts on both coasts, break-even load factors were 60% and 34.3% for the West and East Coasts, BAe found.

Surprisingly, USAir since has tempered its criticism of the 146, although in the past, the airline had complained often about the aircraft's poor reliability and maintainability.

"In the environment we were forced to operate the aircraft-that being short-haul routes-in an extremely competitive discount-fare-war environment, in an era where fuel prices has skyrocketed, with an airplane that was using 20 seats fewer then it was designed to operate with, yes, the 146 did have high operating costs," said USAir spokesman David Shipley. …

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