US Airways Group Inc. has agreed to give up 29 of its airplane gates at Baltimore-Washington International Airport and will eliminate an additional 110 ground crew positions as part of its post-Sept. 11 cost-cutting plans.
The financially battered Arlington, Va.-based airline has slashed dozens of flights at BWI since last year's terrorist attacks, leaving it with more gates and ground employees than it needs to service its planes.
With Southwest Airlines and others looking for more space at BWI, the Maryland Aviation Administration agreed to pay $4.3 million to buy US Airways out of its lease on 17 jet gates and 12 commuter plane gates.
Analysts described the deal as a bargain for the airport, which can now market the underused gates to other airlines.
The deal, approved yesterday by the state Board of Public Works, will leave US Airways, the airport's second-biggest carrier behind Southwest, with seven jet gates and six commuter gates. BWI has 65 jet gates and 18 commuter gates, but more are under construction as part of the airport's $1.8 billion expansion.
In a region where airlines have historically fought over control of airport gates, analysts said, the deal is further evidence that US Airways' downsizing at BWI is permanent.
"There are hundreds of airports with scheduled air service in this country that don't have 29 gates total," said Robert Mann, a New York aviation consultant. "This is a massive giveback of what is typically a scarce resource."
The announcement comes as US Airways is preparing to eliminate about 110 ground crew positions at regional carrier Piedmont Airlines, a subsidiary that serves BWI. The work will be taken over by US Airways' own ground crew and maintenance staff, though a date has not been set. Employees at the subsidiary were notified Tuesday, an airline spokesman said.
"Following the events of Sept. 11 there has been a subsequent reduction in traffic, and we, like other carriers, have been restructuring our operations," said David Castelveter, a spokesman for US Airways.
A spokesman for the International Association of Machinists, which represents most of the Piedmont ground workers, said it was too soon to talk about the furloughs because it was unclear which employees will be affected.
Airport officials downplayed concerns about US Airways' cutbacks, saying the gate buyback will give other airlines room to grow. The deal will also make it easier to complete construction on Pier A, which is being expanded to give Southwest Airlines more gates. The deal calls for United Airlines to move from its current location in Pier A to Pier D, where US Airways is giving up gates.
Pier D is also home to AirTran Airways, a new carrier at BWI that is considered a more credible competitor to Southwest's dominance in the low-fare market. AirTran officials say they are confident they will thrive at BWI - something US Airways was never able to do because of its high operating costs relative to Southwest.
"We've gone from no flights at the beginning of December to 22 by April," said Kevin P. Healy, AirTran's vice president of planning. "I think BWI has additional potential."
Airport officials say they are confident they can lease the gates left behind by US Airways.
"There will be no unused gates, let's put it that way," said George Ferris, a member of the Maryland Aviation Commission and chairman of brokerage firm Ferris Baker Watts. "It will simply be a rebalancing of gates between airlines."
Analysts agree that there is opportunity for other airlines to pick up where US Airways has left off. BWI is one of a small number of airports that reported modest passenger gains last year despite an industry tailspin precipitated by the Sept. 11 attacks.
"From an airline planning perspective, I would tell you ... there are a number of carriers who will find [29 open gates] a tantalizing possibility that is very intriguing," said Stuart Klaskin of Klaskin, Kushner & Co., a Miami-area aviation consulting firm.
Mann, the New York consultant, said airlines are wary of going head-to-head against Southwest. But there are carriers that would be able to carve out a niche in the BWI market.
"That's actually a fairly forward-looking strategy on the part of the airport," he said. "They are replacing a failing situation in US Airways with someone who can properly utilize the assets."