ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, April 17, 1996 TAG: 9604170039
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: ARLINGTON
The new chairman of USAir is telling employees the airline likely cannot survive as an independent company and should merge or ally with another carrier, union representatives said Tuesday.
Stephen M. Wolf told union members and managers the nation's fifth-largest carrier may buy another airline or merge with a larger carrier, said Michael Gearing, spokesman for the Air Line Pilots Association's USAir division.
``I'm convinced this road show he's doing is laying the groundwork for whatever play he's contemplating at this time,'' Gearing said.
Wolf said he would prefer to see the carrier grow internally but believes current market conditions prohibit that, union members said.
Merger discussions with United Airlines fizzled last year, and a brief flirtation with American Airlines also went nowhere.
``He said what happened last year probably was a precursor to some other talks,'' a union representative at one of the sessions with Wolf said.
Wolf, a former United chairman who took over at USAir in January, held six meetings with employee groups in the Washington area and in Pittsburgh and Philadelphia over the past two weeks, company spokesman Paul A. Turk said Tuesday.
``He's meeting with employees all around the system to give them a picture of where we are. He's not delineating the future course of the airline,'' Turk said.
Wolf did not offer specific plans during the get-acquainted sessions, Turk said. Wolf will not comment on the meetings, which were closed to the media and public, the spokesman added.
The airline employs about 200 in Roanoke, where it supplies slightly more than half of the daily departing flights from Roanoke Regional Airport and about two-thirds of the available passenger seats.
In trading Tuesday on the New York Stock Exchange, following first reports of Wolf's meetings in The New York Times, USAir shares rose 621/2 cents to close at $18.371/2 a share.
USAir is strong in the Northeast, making it an attractive target for a large airline looking to secure its position.
But it has a troubled history with its three largest unions. Last year the company scrapped its attempt to win $2.5 billion in labor concessions that previous Chairman Seth Schofield said were necessary to ensure USAir remained in business.
USAir's contract with machinists expired months ago, and the pilots' contract comes due at the end of this month. The flight attendants' contract expires next year.
``The meetings are very well-attended,'' said Gearing, who was at two of the sessions.
``The pressure in the industry is alliances and associations or marriages of convenience,'' said Association of Flight Attendants spokeswoman Jane Goodman. That union represents about 8,000 USAir flight attendants.
Wolf used the sessions to sound many of the same themes as his predecessor. Schofield also stressed that USAir must reduce costs and become more productive.
For 1995, the carrier earned $119.3 million, or 55 cents per share, compared with a loss of $684 million, or $12.73 per share, in 1994. Sales were $7.47 billion, up from $6.99 billion in 1994.
LENGTH: Medium: 64 linesby CNB