UPDATE: US Airways to Cut 1,000 Jobs, Focus On Hub Cities

DOW JONES NEWSWIRES

US Airways Group Inc. (LCC) will trim 1,000 jobs, or about 3.1% of its total work force and cut flights, focusing on hub cities where it stands to make a profit.

The company said Wednesday it would concentrate on four hubs - Charlotte, N.C., Philadelphia, Phoenix and the District of Columbia, as well as its hourly shuttle service between New York's LaGuardia Airport, Boston and Washington's Ronald Reagan airport.

"By focusing on our strengths and eliminating unprofitable flying we will increase the likelihood of returning US Airways to long-term profitability," Chairman and Chief Executive Doug Parker said in a statement.

The move comes after AMR Corp.'s (AMR) American Airlines said in September that it would change its route network to focus on four key hubs - Dallas/Ft. Worth, Chicago, Miami and New York - while trimming routes to smaller cities. Overall, the airline plans to increase seat capacity by just 1% in 2010.

US Airways, the result of a 2005 merger of American West Airlines and the former US Airways, said it would reduce the number of flights to Las Vegas to 36 from 64 daily departures as a result of increasing fuel prices and weak demand. It also said it would end flights at Colorado Springs, Colo., and Wichita, Kan.

Other changes announced Wednesday include the suspension of five European routes: to London Gatwick; Birmingham, England; Milan, Italy; Shannon, Ireland; and Stockholm, Sweden, from US Airways' international gateway in Philadelphia. It will also give up its right to fly between Philadelphia and Beijing.

As a result of these changes, US airways will initiate systemwide job cuts during the first half of 2010. The reductions include about 600 airport passenger and ramp service jobs and about 200 pilots and about 150 flight attendants, with the shut-down of crew bases in Las Vegas and LaGuarida.

Airlines around the world have suffered from weak passenger demand, especially for business travel, and on international routes. But the declines appear to be stabilizing at many carriers, and last week, US Airways reported that its third-quarter loss narrowed. One bright spot for U.S. Airways and other carriers has been their ability to add new revenue from such things as checked bags and onboard meals, even though fare prices remain low.

Airlines have also been raising cash in recent months to bolster their balance sheets.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com