US Airways unveils services, says it's still studying merger

PHOENIX -- US Airways executives on Wednesday were tight-lipped about the airline's ongoing evaluation of a potential bid for bankrupt American Airlines but suggested no decision is imminent.

CEO Doug Parker didn't dodge the merger issue entirely, kicking off the airline's media day with Adele's "Rumor Has It" song playing in the background.

"I know there are a lot of rumors and speculation going on about US Airways and many of you want to hear our views," he said at the Musical Instrument Museum in Phoenix.

Aside from repeating his frequent comment that US Airways is in sound shape and doesn't need to merge, as America West and the old US Airways did in 2005, Parker said only that the Tempe airline and the financial advisers it hired to study the bid are still doing just that.

"That work continues and that's where we are — and that's where I suspect we'll be for quite some time," he said.

The airline had plenty of news for travelers, most of it new services, including the addition of in-flight Wi-Fi to more than 200 planes, new in-flight movies and TV shows for sale, and a new option to buy a speedier trip through the airport.

The not-so-good news: Airfares are likely to remain high.

Travelers aren't seeing the almost weekly fare increases they were a year ago when fuel prices were spiking, US Airways President Scott Kirby said, but solid business travel and vacation bookings mean airlines can still raise prices to offset sharply higher fuel costs. That wasn't the case in 2008 when airlines weren't able to raise fares and lost billions.

"The demand environment remains strong," Kirby said.

"It's unlikely that there will be aggressive fare sales this year."

The new services for travelers include:

The significant expansion of in-flight Internet service, already underway at other airlines including US Airways' main competitor in Phoenix, Southwest Airlines. The service, by Gogo, is currently offered on just 63 US Airways jets, all Airbus A321s. It will be added to its 73 Embraer regional jets by this summer and to the rest of its Airbus fleet, an additional 209 planes, in the next year. When completed, 90% of the airline's mainline fleet will have Wi-Fi.

Kirby said the expansion is a competitive move more than a money-making move, as in-flight Wi-Fi usage rates are still low. He said some travelers have started picking airlines based on whether Wi-Fi service is offered. Some carriers, including AirTran and Virgin America, offer Wi-Fi on all U.S. flights, and Delta is getting close.

"I make choices about which flights I take based on having Wi-Fi on board," he said.

US Airways introduced in-flight Wi-Fi in 2010. The Internet service starts at $4.95 per flight.

Video on demand. The new Gogo Vision, initially available on laptops and computer tablets, will include the rental of movies and television shows. TV shows will start at 99 cents, and movies will be $3.99. Passengers don't have to buy in-flight Internet service to access the system. There will also be some free features, including online shopping, restaurant reservations and information on the flight's destination.

It should be available beginning in the fall.

"I think that's going to be a real hit," said Andrew Nocella, the airline's senior vice president of marketing and planning.

A "Preferred Access" package will go on sale online beginning in late April. Travelers who buy the service, which is also offered in various forms by other airlines including United and JetBlue, will receive expedited flight check-in, security screening and boarding. Those perks are already free for US Airways' frequent fliers and first-class passengers. The airline did not reveal pricing, except to say it will vary by airport and other factors. The lowest fee will be $3.

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