US Airways to Halt Customer Calls to Manila

TEMPE, Ariz. ( TheStreet) -- US Airways ( LCC) said it will close its Manila call center this year, continuing a trend for airlines to close offshore reservations call centers, which often disappoint consumers.

The major U.S. carriers have always had most of their call centers in the U.S. Delta ( DAL), United ( UAL) and US Airways added off-shore centers in the early half of the last decade, when the industry lost about $40 billion and four major carriers sought to reduce costs in bankruptcy.

US Airways opened the Philippines center as a temporary measure under a 2004 agreement, negotiated during its bankruptcy, with the Communications Workers of America, which represents its agents. "We agreed in 2004 that they could temporarily outsource this work," said CWA spokeswoman Candace Johnson. "There were going to be layoffs and the company said there wouldn't be, in exchange for allowing this work to be done offshore."

Johnson said the carrier has indicated that new jobs will be created for agents in the U.S. when the Manila center closes. US Airways, which currently employs about 1,200 reservations agents, is reviewing how the change "will affect staffing at our domestic call centers in Reno, Phoenix and Winston-Salem," said spokeswoman Michelle Mohr. The changes will occur by October, she said.

In 2006, US Airways brought back 600 reservations jobs from Manila, Mexico City and San Salvador to the U.S. "Our reservations team does a much better job than those the work has been outsourced to," said US Airways CEO Doug Parker, in a May 2006 interview with TheStreet. "Despite our efforts to improve the outsourcing, it will never be as good as having our own employees do it."

In the interview, Parker credited intensive cost-cutting for making it feasible to bring work back. "The lesson here is that when you get to where pay scales are outside of market rates, jobs go outside," he said. "But when you can do stuff in-house close to as efficiently as it can be done outside, you would always prefer to have it done inside."

It is not unusual for U.S. consumers in any industry to complain when their phone calls for assistance are routed to offshore locations, often in the Philippines or India, where agents speak English (but not American) and may not fully comprehend the full scope of a problem that is brought to their attention.

Delta has reservations centers in nine U.S. cities: Atlanta; Cincinnati; Dallas; Chisholm, Minn.; Minneapolis; Sioux City, Iowa; Salt Lake City; Seattle and Tampa, Fla. "We are focusing domestic calls in our U.S. based call centers, but do outsource a limited number of calls to Montego Bay and Cape Town," said spokeswoman Susan Elliot. "During extremely busy times, we also send calls to our call center in Santiago. "

In 2009, Delta closed a reservations call center in India. In a telephone message to employees, CEO Richard Anderson said: "The customer acceptance of call centers in foreign countries is low, and our customers are not shy about letting us have that feedback." Delta began sending reservations calls to India in 2002.

United has call centers in Chicago; Detroit; Honolulu; Rapid City, S.D., Manila; Delhi, India and Pune, India. The offshore centers opened early in the past decade. United's reservations agents, represented by the International Association of Machinists, are currently involved in contract talks.

"Securing and expanding the work of our members is always an issue in negotiations, including at United," said IAM spokesman Joe Tiberi. "Our members can provide better customer service than overseas call centers, and satisfied customers lead to successful airlines."

Continental has call centers in Houston and Salt Lake City and in Monterey, Mexico; the last responds to calls that require Spanish speakers and, in rare cases, is used to handle overflow calls, said spokeswoman Christen David. Continental also has about 1,000 agents working out of their homes.

Among other carriers, American ( AMR) answers all domestic reservations calls in Cary, N.C.; Fort Worth, Texas and Tucson, Ariz. "All of our domestic reservations call centers are in the United States and always have been," said spokesman Tim Smith.

Southwest ( LUV) has call centers in Houston, Chicago, Phoenix, Albuquerque, N.M., Oklahoma City and San Antonio. JetBlue ( JBLU) agents work out of their homes in the Salt Lake City area.

-- Written by Ted Reed in Charlotte, N.C.

>to contact the writer of this article, click here: Ted Reed

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