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Thu, Jul 10, 2003

US Airways Changes Mind on CRJ Order

Mesa Airlines to Operate CRJ-700 as US Airways Express

US Airways sent a note to Bombardier Aerospace, saying that it will not be taking delivery of the 25 CRJ-705 regional jet aircraft ordered in May, and instead, will contract with Mesa Airlines to fly at least 25, and perhaps as many as 55, 70-seat regional jets under the US Airways Express name.

Result of Union Logjam

The decision was made after US Airways and its Air Line Pilots Association (ALPA) unit could not reach an agreement on terms under which the 75-seat CRJ- 705 would be flown by a wholly owned US Airways affiliate using furloughed US Airways pilots under the carrier's 'Jets For Jobs' program.

"We continue to believe that the CRJ-705 falls within the parameters of our contract with ALPA, and we were enthusiastic about the purchase of these planes, which would have provided jobs for up to an additional 225 furloughed US Airways pilots," said Bruce Ashby, president of US Airways Express. "ALPA disagreed, and rather than spend months -- maybe even years -- negotiating and arbitrating our differences, we have decided instead to place the jets at Mesa. That will mean fewer jobs for furloughed pilots and at lower wage rates, but it reflects the position ALPA has maintained in representing its members."

Under the US Airways-ALPA 'Jets For Jobs' agreement, half of all regional jet pilot positions at affiliate carriers such as Mesa must be filled with furloughed US Airways pilots, but 100 percent of the jobs associated with the CRJ-700 series and Embraer 170/175 aircraft go to furloughed pilots placed at the airline's regional carriers (PSA, Piedmont and Allegheny) or its new wholly-owned MidAtlantic Airways division.

"Throughout our negotiations, we impressed upon ALPA the need to stay on track in order to take delivery of these new regional jets," said Ashby. "We finally concluded that we must agree to disagree, and since we must continue to run the company and implement our new business plan, the end result was the decision to utilize Mesa and its workforce, since that is the net result of ALPA's position."

Mesa Notes:

Mesa Air Group says that all aircraft are expected to be put in service no later than December 31, 2004.

"Regional jets are a critical piece of the US Airways restructuring strategy," said Jonathan Ornstein, Mesa's Chairman and CEO. "We are delighted to have the opportunity to significantly expand this important part our operation. We would like to thank our employees and employee leaders for their hard work and vision which has made this possible."

FMI: www.usairways.com; www.alpa.org; www.mesa-air.com

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