Merger of American and US Airways Expected

By Bill Zeeble, KERA News

DALLAS –   The expected American Airlines/U.S. Airways merger will result in the world’s largest carrier again operating out of Fort Worth.

Industry experts say the management team from smaller U.S. Airways will take over management of both carriers.  Holly Hegeman, of Dallas-based Plane Business–dot-com, says U.S. Air’s CEO Doug Parker will be the top dog for good reason.

HOLLY HEGEMAN:   “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. Air’s Parker and American Airlines’ CEO Tom Horton?

MIKE BOYD:  “What Parker has is vision and leadership.  What American has seen over the past year and a half has been decision by committee rather than decision by vision.”

Mike Boyd heads his own airline consultant business in Colorado. He 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.

BOYD:  “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 repaint each of 500 airplanes, that is outrageous.”

Hegeman says unions at both carriers have signaled they’re ok with a U.S. Air management takeover.  She’s not sure American’s workers would tolerate less.

HEGEMAN:  “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 10 years that I think the employees would have shut the airline down.”

Hegeman says the two to three year transition will be ugly and uncomfortable 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.

BOYD:  “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.