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USAir’s Chairman Announces Retirement

September 7, 1995

NEW YORK (AP) _ The retirement of USAir Group Inc.’s chairman could remove a perceived obstacle to the debt-ridden airline’s efforts to win concessions from its workers.

A day after USAir said it would return to profitability this year, the airline on Wednesday announced the surprise departure of Chairman Seth Schofield. He will leave when his successor is chosen.

The unexpected move may enable the nation’s sixth-largest carrier to restart talks with its three major unions over reductions in labor costs, analysts said.

``This move may strengthen the company’s position,″ said Barbara Beyer, president of Avmark Inc., an aviation consulting firm based in Arlington, Va.

``A new leader won’t bring the same baggage into the negotiations with the unions. Someone new won’t have all the bickering and conflict that has come with these talks.″

USAir hasn’t posted a profit since 1989. It has been seeking seeking $500 million in labor concessions and $400 million in other savings to compete better in an industry hurt by weak demand and continuous fare discounting.

Key labor negotiations collapsed in July when flight attendants voted down a package negotiated with management and talks with pilots stalled.

``There has been a lot of wrangling back and forth between the unions and the company,″ Beyer said. ``They need someone new to come in and say `Okay, this is where I am starting’.″

USAir, which primarily serves the East Coast, didn’t give any specific reason for Schofield’s retirement beyond the need to pass the torch to a new manager.

``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.″

Schofield, 56, started at USAir as a baggage handler and worked his way up during a 38-year career to lead in the company in 1992. He was not immediately available for comment Wednesday.

A special committee has been formed by the USAir board to search for a replacement.

The news of Schofield’s retirement comes a day after the carrier predicted it would report a pretax profit for third quarter and the full year. That news surprised analysts, who had not been expecting the airline to post a profit for the remainder of the year.

USAir shares rose 87 1/2 cents Wednesday to $10.62 1/2 on the New York Stock Exchange, adding to gains made Tuesday after the airline made the profit predictions. Schofield’s retirement news came after the markets closed.

Just a year ago, many industry observers thought Arlington, Va.-based USAir was the industry’s most likely next candidate for bankruptcy court.

A fifth crash in as many years and new cheap ticket competition on its routes on top of a losses totaling $3 billion since 1988 led to speculation the carrier was was doomed.

As recently as April, USAir said in its annual report that low-fare competition combined with high costs threatened its ability to keep aloft.

Tough conditions and intense competition have caused difficult times for a number of the airline industry’s most illustrious names, resulting in layoffs and other cost cutting measures. TWA, in fact, just emerged from a prepackaged bankruptcy proceeding, its second in three years.

Despite the difficulties, USAir made something of a turnaround this spring and summer, helped by the resurgence in the U.S. economy. That boosted air traffic, especially for leisure travelers on vacation.

By the end of the second quarter, USAir had earned $112.8 million, nearly eight times more than the year before.

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