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Tue February 12, 2013
American Airlines-U.S. Airways Merger Could Launch Wednesday or Thursday
The expected American Airlines – U.S. Airways merger will result in the world’s largest carrier again operating out of Fort Worth. What will the marriage mean for passengers and employees?
Industry experts say the management team from smaller U.S. Airways will take over management of both carriers. Holly Hegeman, of Dallas-based Planebusiness.com, says U.S. Airways CEO Doug Parker will be the top dog for good reason.
“If the creditor’s committee had not been convinced that the management team at U.S. Airways was not the superior choice, we would not be talking about a potential merger.”
So what’s the difference between U.S. Airways' Parker and American Airlines’ CEO Tom Horton?
“What Parker has is vision and leadership," says Mike Boyd, who heads his own consulting business in Colorado. "What American has seen over the past year and a half has been decision-by-committee rather than decision by vision.”
Boyd says American entered bankruptcy almost a year and a half ago with two big goals - reduce debt, and clear pension obligations from the books, as competitors had done.
"Instead of that, they’ve run way off into the weeds doing all sorts of indecisive things. At a time when American Airlines is petitioning the court to stop paying health care benefits to retirees, they’re also hiring fashion consultants for new uniforms. And they’re unnecessarily painting airplanes. When you’re telling retirees ‘we can’t pay health benefits’ and they’re going to spend $50,000 to $100,000 to paint each of 500 airplanes, that is outrageous.”
Hegeman says unions at both carriers have signaled they’re ok with a U.S. Airways management takeover. She’s not sure American’s workers would tolerate less.
The American Airlines employees are so... fed up would be a nice way to put it… with the current situation and what they’ve gone through over the last ten years that I think the employees would have shut the airline down."
Hegeman says the two to three year transition will be uncomfortable and ugly for workers wondering if they’ll keep their jobs. But she says most will because both carriers will stay aloft. Mike Boyd says with the addition of the Phoenix carrier here, more destinations will be available for DFW customers. And he does not buy analysts' predictions that fares will rise because of the merger.
“Right now airlines are pricing to make payroll, not to gouge the public. There is no credible evidence to show fares have gone up or capacity has gone down directly because of mergers.”
Observers say a merger announcement could come today or tomorrow.