USAir will meet competition from new airlines on its routes head-on, Edwin I. Colodny, chairman and president of the Washington-based airline, told shareholders yesterday.
"This represents a very determined decision by this company that it takes the new competition seriously and it will not be undersold," Colodny said, adding that USAir will offer increased schedules where it faces new competition.
With the start of People Express operating from Newark Airport, USAir is seeing for the first time some competition from new entrants whose formation was made possible by enactment of the airline deregulation law in 1978, Colodny noted. Like New York Air, People Express is using efficient twin-engine aircraft, paying lower wages to its new employes than the establishmented airlines have to pay, and is offering drastically reduced fares.
"The consumer obviously is intrigued with low fares in a time of inflation," Colodny said. "The travel market is price-sensitive -- particularly the discretionary traveler."
In response to a question from a shareholder, Colodny said the new competition is "going to be a problem" but how substantial a problem depends on how successfully they compete. He said that USAir was maintaining an 87 percent load factor on its Newark-Buffalo route while the new People Express was flying with a load factor in the range of 30 percent to 40 percent. He also contended the new airlines will not be able to maintain their low fares.