US Airways Summary

  • Last updated on November 10, 2022

A large U.S. air carrier of passengers and cargo, serving mainly the East Coast.

Although few U.S. airlines have achieved the status of a major carrier (those with revenues over $1 billion per year) without acquiring some or all of the assets of another airline, most carriers have significant periods of internal growth and development. During these periods, the airline grows using money generated by their operations or raised through loans or stock issues to acquire new aircraft, add new routes, or expand existing service. US Airways is an exception to the rule. Its growth has come almost entirely through the acquisition of other carriers. The modern US Airways represents the consolidation of more than ten regional earners into a single network.

The Acquisition Years

US Airways traces its beginnings to a company called All American Aviation. Like many modern U.S. airlines, All American Aviation started as a mail carrier providing airmail delivery to western Pennsylvania and the Ohio Valley in 1939. In 1949, All American Aviation changed its name to All American Airways and began its first passenger service. As its route network expanded, the airline changed its name again in 1953 to Allegheny Airlines, in recognition of the mountains and river that lay at the heart of its operations.

By 1967, Allegheny had begun operations that would link many of the smaller communities in the Northeast. Other carriers operating under contract to Allegheny to provide service included Reading Aviation Service, which joined the commuter service in 1973 and became a wholly owned subsidiary in 1986, and Pennsylvania Commuter Airlines, formerly Clark Aviation Corporation, which also joined in 1973 and was purchased in 1985. In 1968, Allegheny itself merged with Lake Central Airlines. Lake Central was based in Indianapolis, Indiana, and serviced a network of destinations including Dayton, Columbus, and Cincinnati, Ohio, and St. Louis, Missouri. The next acquisition was Mohawk Airlines in 1972. Mohawk Airlines served cities through New England from its base in Utica, New York. With this acquisition, Allegheny became the sixth-largest airline in the world as measured by passenger boarding.

Now serving markets as far away as Arizona, Texas, and Florida, Allegheny changed its name to USAir in 1979 to reflect the growth in its service area. USAir did not make another acquisition until May, 1987, when Pacific Southwest Airlines, based in San Diego, became a wholly owned subsidiary.

In early 1987, USAir had begun negotiating with Piedmont Airlines regarding a possible merger. The company originally known as Piedmont Aviation was authorized to begin service from the Ohio Valley to North Carolina in April, 1947. However, protest from unsuccessful applicants for the route had prevented them from taking off until February 20, 1948. By this time, the airline had changed its name to Piedmont Airlines. Piedmont continued to expand along the east coast of the United States, eventually opening one hub at Charlotte, North Carolina, in 1981 and another in the Baltimore/Washington, D.C., area in 1983. Along the way, Piedmont became the first airline to send an all-female crew on board a jet aircraft on May 10, 1982. In 1983, Piedmont became the first airline to own its own regional carrier when it purchased Henson Airlines. Piedmont was honored as “Airline of the Year” for 1984 by the magazine Air Transport World. Two years later, Piedmont acquired a new hub at Syracuse, New York, and ten new cities to their route structure by purchasing Empire Airlines. In May, 1986, Piedmont became the sixth U.S. carrier to board over two million passengers in a single month. When final approval was granted for the USAir-Piedmont merger, it became the largest airline merger in U.S. history.

Changing Times

The acquisition of Piedmont was not only, at $1.59 billion, the largest deal in U.S. aviation history, it was also the most expensive. After the acquisition, USAir began to incur large operating losses. The value of its stock dropped, and the company spent the next few years hovering on the brink of bankruptcy. A major problem was the difference in labor costs between the two airlines. To avoid employee unrest, the salaries of former Piedmont employees were raised to match those of their USAir counterparts. These difficulties appeared to be over when the U.K.’s British Airways agreed in 1994 to purchase 24.6 percent of the shares of USAir. This is the highest level of investment allowed a foreign carrier in the United States. As part of the new alliance, USAir gave up its right to the London Heathrow route and began code sharing on sixty-four U.S. destinations with British Airways. A code-share flight divides a route into two or more segments, with a different carrier flying each segment. A flight might be listed as a USAir trip from Chicago to London; however, USAir would only fly the segment from Chicago to New York and British Airways would fly the segment from New York to London.

In 1995, USAir posted its first profit since 1988. Unfortunately, by December, 1997, British Airways had announced the end of the alliance and the sale of its stock. USAir, now called US Airways, which had announced earlier that year one of the largest single aircraft orders in history, was again struggling with high operating costs and a weak international alliance of partners. The airline that had once formed itself through acquisition became the rumored target of acquisition by other carriers as it faced increasing competition from lower-cost carriers. A proposed merger with United Air Lines in 2001 was halted by a U.S. Department of Justice investigation.

Bibliography
  • Jones, G. The Big Six Airlines. Osceola, Wis.: Motorbooks International, 2001. This book contains a brief history of the Big Six as well as the large color photographs that Motorbook is famous for printing.
  • Jones, G., and G. P. Jones. US Airways. Shepperton, England: Ian Allan, 1999. The most up-to-date book on the history of US Airways, by an author who specializes in aviation.
  • Moody’s Transportation Manual. New York: Mergent FIS, 2000. The Moody’s series presents a good overview of the company history, structure, and financial position.

Air carriers

Airline Deregulation Act

Airline industry, U.S.

British Airways

Mergers

Categories: History Content