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Keith Alexander

US Airways Must Win Over Wary Customers

By Keith L. Alexander
Tuesday, January 25, 2005; Page E01

US Airways cleared some important financial hurdles last week, culminating with the approval Friday of its last remaining renegotiated labor agreement. Now it has to clear another critical hurdle: winning back a customer base wary of the struggling airline's future.

Over the weekend, the Arlington-based carrier launched a marketing blitz seeking to assure customers that it had made great strides to guarantee its survival. It sent e-mails to 3.2 million customers and published full-page newspaper advertisements saying that the worst of its troubles had passed.

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In the e-mails, Bruce R. Lakefield, US Airways chief executive, thanked customers and employees for not abandoning the airline and urged them to remain with the carrier.

"The most difficult days are behind us," Lakefield said, reiterating the carrier's plan to emerge from bankruptcy protection by June 30.

The message is critical and needs to be sent out quickly, airline experts said. Fare expert Tom Parsons, publisher of Bestfares.com, said US Airways needs to repair its image among customers right away because travelers have begun to make spring and summer travel plans.

"They need to do something like this to get the word out. For months we've been seeing and hearing reports on how bad it's been looking," Parsons said.

To win back travelers, US Airways is using cheaper fares and bonus frequent flier miles.

It held two fare sales last week that set records for single-day sales and for revenue generated during a traditionally slow period for ticket sales. Its Web site sold nearly $5 million worth of tickets on two days, marking the second- and third-highest revenue days in the site's history.

The airline is also giving away 40,000 frequent flier mileage points for business-class tickets to Europe. It's also giving 10,000 miles to passengers who fly to the Caribbean, Latin America or Bermuda, as well as double points to all other destinations. Tickets for all three promotions must be purchased by Jan. 30.

Frequent fliers are a critical customer base for US Airways, but many had begun depleting their accounts out of fear of being left holding thousands of miles at the airline's demise.


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