Major Airlines Woes continue

By Jeremy Pelofsky

WASHINGTON (Reuters) - U.S. airlines, after a Christmas weekend that snarled thousands of travelers' holiday plans, will face a government review of whether they are living up to customer service commitments made five years ago, the U.S. Transportation Department's top auditor said on Monday.

Travelers on US Airways and Delta Air Lines' regional carrier Comair were stranded or separated from their luggage over the weekend and the carriers blamed bad weather, computer problems and unexpected staff shortages.

The Transportation Department's Inspector General, Kenneth Mead, unveiled his planned review of the industry after Transportation Secretary Norman Mineta earlier on Monday sought his assistance in investigating the weekend troubles of the two airlines.

"Given that air traffic and flight delays are approaching the levels experienced in 2000, it is appropriate that we review the extent to which air carriers are meeting their commitments," Mead said in a statement.

"Much has changed since the airlines pledged to improve air travel in 1999," he said. Among other promises, the airlines agreed to give travelers better information about flight delays to avoid stricter regulations by Congress.

Lawmakers had threatened action in 1999 after rising dissatisfaction among travelers and high-profile incidents of passengers stuck on delayed aircraft.

A catalyst for congressional ire was the stranding in January of that year of Northwest Airlines passengers who sat for up to 10 hours inside planes during a snowstorm. Many planes ran out of food and water, and toilets overflowed.

Lawmakers had proposed bills that would force airlines to refund discount tickets, return lost baggage faster and award generous compensation to passengers stuck on parked airport.

Mead said he would take into account changes in aviation security after the Sept. 11, 2001 attacks, the industry's financial health and the impact of low-cost carriers. Much of the industry is still walking a financial tightrope years after the attacks.

WEEKEND TRAVEL WOES EBB

US Airways, the bankrupt No. 7 U.S. airline, was still experiencing some delays on Monday after an unexpectedly high number of employees called in sick over the holiday weekend, forcing the cancellation of hundreds of flights and separating about 10,000 bags from their owners.

Comair, grounded by a computer shutdown on Christmas Eve, said it hoped to run 60 percent of its 1,160 daily flights on Monday and back to its full schedule by Wednesday.

Mineta cast doubt on the airlines' excuse that weather was a primary factor for the problems, noting that no other major carriers reported weather-related problems over the weekend.

"We will of course cooperate with their inquiry although we believe the facts are relatively simple, and the efforts of the company and 99 percent of our employees have been to take care of our customers," said Amy Kudwa, a US Airways spokeswoman.

A Comair spokesman was not immediately available for comment.

At US Airways, the troubles threatened to further alienate customers as the carrier fights to avoid liquidation by cutting employee pay and other costs. The company suffered a net loss of $58.4 million in November.

"This airline cannot afford to have any reductions in revenue right now," said Michael Boyd, an airline industry analyst. "When your employees are this disaffected and the financial condition of the airline is this weak, it's really questionable whether they can get through this."

US Airways pilots, customer service workers and smaller unions have ratified wage concessions, while flight attendants have reached a tentative deal for givebacks.

Mechanics and baggage handlers continue to negotiate, but their union denied organized action against the airline.

US Airways said it had canceled just 15 flights on Monday due to snow in New England. Its Web site showed some delayed flights from Philadelphia because of baggage loading problems.

The airline said it had whittled its backlog of lost luggage to under 1,000 pieces.

Delta shares closed down 13 cents, or 1.7 percent, at $7.43 on the New York Stock Exchange. US Airways stock was unchanged at $1.26 on the over-the-counter bulletin board.

(Additional reporting by Jui Chakravorty in New York and Tim Dobbyn in Washington)