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.

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