In Surprise Move, USAir Says Its Chairman is Retiring
NEW YORK (AP) _ A day after USAir said it would return to profitability this year, the airline on Wednesday announced the surprise departure of its chairman.
USAir Group Inc. didn’t give any specific reason for Seth Schofield’s retirement, but analysts said his departure might restart key talks with the airline’s unions.
The company, which hasn’t posted a profit since 1989, is seeking $500 million in labor concessions and $400 million in other savings.
``He understands how far we’ve come and what’s best to take it to the next step,″ said USAir spokesman Rick Weintraub. ``He also knows that there are still things that need to be done.″
Just a year ago, many industry observers thought the Arlington, Va.-based company was headed for bankruptcy.
The airline has been plagued by five crashes in as many years, $3 billion in losses since 1988, high costs and continuous fare discounting.
Schofield’s departure, announced after the markets closed, came a day after the carrier predicted it would report a pretax profit for the third quarter and the full year.
That news surprised analysts, who had not been expecting the airline to turn a profit for the rest of the year.
But the airline, the nation’s sixth-largest, has made something of a turnaround this spring and summer, helped by the resurgence in the U.S. economy.
However, key labor negotiations collapsed in July when flight attendants voted down a package negotiated with management and talks with pilots stalled.
``A new leader won’t bring the same baggage into the negotiations with the unions,″said Barbara Beyer, president of Avmark Inc., an aviation consulting firm.
``There has been a lot of wrangling back and forth between the unions and the company. They need someone new to come in and say `OK, this is where I am starting.‴
Schofield, 56, was not immediately available for comment.
Schofield started at USAir as a baggage handler and worked his way up during a 38-year career. He was named chairman and chief executive in 1992.