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Thursday, July 19, 2012

US Airways Wants Merger with American Immediately

  Woodrow Bellamy III

US Airways Chairman and CEO Doug Parker on Wednesday took his case for a proposed merger with American Airlines to Washington D.C., hoping to change the minds of senior management at American who are currently refusing to merge while it is undergoing bankruptcy proceedings.

Parker said a merger between US Airways and American would create the largest airline in the world, surpassing United Continental Holdings, and would allow the combined airline to better compete globally and would protect thousands of jobs at stake in the American bankruptcy restructuring.

“We’ve taken a long hard look at American, and we feel that together, we can build the greatest airline in the world, an airline that could complete more effectively with the networks of United and Delta and others,” said Parker. “Together American and US Airways can connect more communities and provide greater benefits for American’s creditors and US Airways shareholders than either airline can do on its own.”

Parker said there are 100,000 jobs at stake for both airlines if the merger does not occur. He added the United-Continental and Delta-Northwest mergers left American at a disadvantage with a network that simply could not compete and is what ultimately lead them to filing for bankruptcy.

For its part, American Airlines CEO Tom Horton, during a meeting with the carrier’s bankruptcy creditors last week, said that US Airways is among the top airlines that they are considering doing mergers with but refused to give a timetable for the merger occurring. 

AMR Corporation, the parent company of American Airlines, filed for Chapter 11 bankruptcy in November 2011. As part of their bankruptcy filing, American holds the rights to presenting an official reorganization plan, which has prevented US Airways from presenting a formal merger offer to the Ft. Worth, Texas-based carrier.

In a statement released Wednesday, American Airlines spokesman Mike Trevino talked about the options that American is currently considering. “This will be a disciplined process guided by the facts and will not be influenced by baseless rhetoric,” said Trevino. “Our increasing strength positions us well to evaluate the full range of strategic options versus our reorganization plan.”

Parker said completing the merger while American is undergoing the bankruptcy process would avoid transaction expenses and expedite any fleet, facility and technology issues that could emerge as a result of the merger.

However, Parker warned that his carrier will move on if they cannot get the merger under way in a timely fashion.

“US Airways is here now and ready to get this done, and there is no guarantee that will be the case forever,” said Parker.

Parker on Wednesday in Washington was joined at the press conference by labor leaders from the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union, who are supportive of the proposed merger between the two carriers for the interests of the 55,000 American employees that they represent.

On Monday, Capt. David Bates, Laura Glading and James Little, all leaders from American Airlines unions, wrote an op-ed for Politico supporting the proposed US Airways merger for the sake of their employees. The three labor leaders said American plans to lay off up to 14,000 employees to cut costs. “The decision by those labor leaders to come out in support of a merger was an unprecedented move on their part, and I think is one of the great untold stories of this process so far,” said Parker.
 

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