US Airways Continues to Pursue American Airlines
Doug Parker, CEO of US Airways, is becoming aggressive in his plight to merge US Airways with American Airlines. Parker’s eyes are set on AA along with the new Boeing 777-300’s on order, the Flagship Lounges, and even the significant fleet of aging “Super-80’s”. Today, June 19, 2012, Parker will meet with key members of US Congress in Washington, D.C., in an effort to foster an environment to make the American merger a reality.
Dallas/Fort Worth based AMR Group, the parent company of American Airlines, declared Chapter 11 Bankruptcy re-organization on November 29, 2011, by vote of Board of Directors. The board also replaced Gerald Arpey as CEO with Tom Horton, who is currently Chairman and CEO of AMR.
While Parker was en-route to Washington, the cat slipped out of the bag about a stop in North Texas to meet with media outlets in the Dallas/Fort Worth Metroplex – confirmed by numerous sources.
American is on a bumpy road as they work to cut costs under Chapter 11 protection. It’s been announced 12,000 some employees, primarily from union work groups, will lose their jobs. American Airlines continue to face problems with union work groups, including the Allied Pilots Association (APA) and the Transport Workers Union (TWU) which represents aircraft mechanics and baggage handlers. The Association of Professional Flight Attendants is also unhappy with company proposals.
During the stop in Texas, Parker attempted to influence editorial media a merger would be best for American and its employees. He’s even touted nearly 7,000 of the 12,000 jobs to be cut can be saved, in an effort to win the unions over. Ironically, when Parker merged Tempe, Arizona, based America West with US Airways, retaining the US Airways brand, the combined carrier faced numerous problems with union work groups.
The products at US Airways and American also vary significantly. American provides three-cabin service on key international routes, including an international First Class product on long-haul routes. AA has also invested in Flagship Lounges for premium customers, a significant step up from American’s AAdmiral Club – a membership club similar to US Airways lounges.
Should a merger occur, word on the street is the combined carrier would operate under the better known American Airlines name and the existing US Airways Tempe headquarters would move to Dallas/Fort Worth.
Despite Parker pushing for a merger, Horton and other executives at American are fiercely against becoming involved in a merger and have stated it is their plan for American to emerge from bankruptcy as a stand-alone carrier. Exiting bankruptcy without a merger is also best for the flying public, given the numerous mergers over past years have resulted in less competition and higher prices.
At this point, a merger would be an uphill battle, but if something is in the works, its being kept quiet. Given additional consolidation is likely to hurt consumers, Parker would also have to drive down a rocky regulatory road.
The judge handling the case, AMR 11-15463, which is in United States Bankruptcy Court, Southern District of New York at Manhattan will soon issue a ruling regarding the layoff of the 12,000 employees.