US Airways prides itself on serving the East Coast, operating a prized shuttle service among Washington, New York and Boston and offering low-fare flights to warm-weather destinations in Florida and the Caribbean.
But the jewels in US Airways Group Inc.'s crown may hold little luster to others. As the carrier struggles to survive a second Chapter 11 bankruptcy filing, analysts say its operations would be of scant value to other airlines if it were forced out of business.
"As far as assets, there ain't nothing there," said Michael J. Boyd, aviation consultant with the Boyd Group Inc. in Evergreen, Colo. "People say they could sell a hub. A hub is nothing more than a piece of paper with a schedule on it. The only possible fungible asset they have is the East Coast shuttle."
The Arlington-based carrier's other assets include gates at its hubs in Philadelphia and Charlotte, several non-shuttle slots at Reagan National Airport and international flights to the Caribbean, Europe and South America. According to Merrill Lynch & Co., the airline has a current fleet of 264 single-aisle Airbus and Boeing jets, most of which have about 150 seats. The airline also has about 20 double-aisle planes made by Airbus and Boeing, according to Airclaims Group Ltd., an aircraft database company.
Most analysts who follow the airline industry agree that US Airways' main asset is its shuttle service that operates at slot-constrained National and La Guardia airports, as well as in Boston. The shuttle has always been lucrative because of the high volume of business travelers who commute each day. But its value has dropped in recent years as more travelers in those cities opt to drive or take Amtrak instead.
US Airways purchased the shuttle from real estate and casino tycoon Donald Trump for $285 million in 1997. Trump bought the shuttle from now-defunct Eastern Airlines for $365 million. Several analysts doubted that the shuttle today could fetch anywhere near that amount, with several saying it would go for more than $100 million or $150 million but not as much as $300 million.
Low-fare carriers have jumped onto the shuttle's routes, which limits an operators' ability to raise prices, said Michael Miller, partner in aviation consulting firm Velocity Group of Washington. "Nobody would pay [$365 million] right now, partially because of the lower fare environment," Miller said.
Miller noted that Flyi Inc.'s Independence Air is adding lots of flights to the shuttle cities from Dulles International Airport, offering fares as low as $49 each way.
Analysts speculated that perhaps AMR Corp.'s American Airlines or low-fare JetBlue Airways Corp. would be likely bidders on the US Airways shuttle if it goes up for sale. JetBlue declined to comment on that possibility. American spokesman Tim Wagner said "it's far too early in the process to speculate anything."
US Airways' other assets, such as its hub routes along the East Coast and to the Caribbean, hold little value because other carriers have easy access to those same routes, analysts said. Already, US Airways has faced pressure to lower fares on routes that JetBlue has added to Florida and the Caribbean.
The asset least likely to be picked up by another carrier is US Airways' gates and maintenance facilities at Charlotte-Douglas International Airport, where the airline has operated a hub since it absorbed now-defunct Piedmont Airways, analysts said. But unlike Philadelphia, Charlotte does not have a huge metropolitan area from which to draw passengers. In recent years, other carriers have downsized or eliminated hubs that are not in major cities.
Jerry Orr, Charlotte's director of aviation, said he is hopeful that another network airline could take over US Airways' hub operations there. US Airways accounts for more than half of the Charlotte airport's daily flights.
"We have lots of runway capacity, a favorable geographic location halfway between the Northeast and Florida, not to mention a very, very low cost structure here at the airport," Orr said.
One potentially valuable asset is US Airways' fleet of newer single-aisle jets that until recently had attracted little interest in the market among airlines looking for secondhand aircraft, said aviation analyst Richard Aboulafia of Teal Group Corp. The company has 90 Airbus planes about five years old and 28 other single-aisle Airbus planes about three years old, according to Merrill Lynch.
These planes could easily be picked up by low-fare, start-up carriers in Asia, Aboulafia said. "There's a big sucking sound coming from Asia right now," Aboulafia said. "These [Airbus] planes could be an easy fit."
Staff researcher Margot Williams contributed to this report.