AmWest maintains course

February  23, 1999

ALPA, Intl

Home

The airline told
Phoenix officials last month it expects to operate 300 flights a day at the airport within
the year, a 40 percent increase over the current schedule of 214 flights, said Dave
Krietor, acting director of the city’s Aviation Department. The airline is adding 12
gates at Sky Harbor’s Terminal 4 and plans to add eight to 10 Airbus A319s to its
fleet of 104 planes this year. Local and civic leaders on Monday cheered the
airline’s announcement that its board had rejected a purchase offer and opted to
remain an independent company.

Phoenix Mayor Skip Rimsza, who was so convinced the airline would leave town that he
put a 30-day hold on an airport parking project, said he was “delighted” at the
airline’s move. Even though he worried publicly that America West would leave, Rimsza
said Monday that the airline’s decision to stay put wasn’t unexpected.
“I’m not surprised,” he said in a telephone interview from Florida, where
he is vacationing. “I do think there is more value for the shareholders in staying
with a low-cost carrier at a low-cost airport in a growing market.” He said he had
been “very worried” that shareholders would be seduced by the short-term value
of a United Airlines deal and decide to sell. That’s why he postponed awarding an $86
million bid to continue with expansion of the Terminal 4 parking garage. That decision
drew withering criticism from America West Chairman William A. Franke, who accused the
mayor of trying to meddle in the airline’s private affairs. Rimsza said he was only
trying to protect the city’s investment in the airport, where America West is the
biggest carrier, claiming 42 percent of the flights.

Rimsza said he wants the city staff to finish an analysis he ordered of airport
operations, including a look at whether to proceed with the Terminal 4 parking-garage
expansion. Other city officials, while expressing relief that America West will remain an
independent company, said the past month has taught them that anything can happen. “I
think we’ve found out they’re sellable, marketable, purchasable, however you
wanna say it,” said Phoenix Councilman John Nelson. “You can never take anything
for granted.” Peggy Bilsten, chair of the city’s Transportation Subcommittee,
said there could be future suitors and other offers. Because of that, the city needs to
carefully follow airline business decisions and make sure that any further city investment
in the airport is warranted. In Tempe, the true hometown of America West, Mayor Neil
Giuliano said the airline board’s unanimous vote to reject a sale convinces him it
wants to stay for good. “That’s a strong message,” he said.

Giuliano, who got the good news about 10 minutes before Franke’s public
announcement, said Tempe will benefit by keeping 1,000 airline employees in its downtown.
“Those are employees who have time during the day to frequent the downtown, and they
get comfortable with it and they come back on weekends and bring other people,”
Giuliano said. America West is putting the finishing touches on a corporate headquarters
at Third Street and Mill Avenue and is expected to start moving in soon.

City officials had wondered if their downtown office scene would take a big hit if the
airline were sold, although some felt the new headquarters would have attracted tenants
quickly. “This will be one less major issue we will have to contend with,” said
Giuliano, noting Tempe is trying to complete its $45 million Rio Salado Town Lake and
continue downtown redevelopment. Krietor, the airport director, said the benefits of
America West’s remaining independent extend beyond the airport. “Ninety-nine
times out of 100, you’re better off having a locally based company than a company
that has out-of-town ownership,” said Krietor, who directed the city’s economic
development program before taking the airport job. For example, he said, companies with a
local headquarters tend to get more involved in civic affairs, from staffing volunteer
boards to filling charitable coffers.

Last year, the airline gave nearly $4 million in donations and flight assistance to
charitable causes. And it ranked 16^th in the United Way’s 1998 campaign,
with $550,394 in contributions.