US Airways’ Parker Encouraged by Merger Progress

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US Airways CEO Doug Parker (Photo: Bill Carey)
March 28, 2013, 4:01 PM

US Airways CEO Doug Parker said he sees smooth skies for the proposed merger of his company with American Airlines following Wednesday’s clearance of the combination by a bankruptcy court judge overseeing American’s restructuring. Speaking at the annual U.S. Chamber of Commerce Aviation Summit in Washington Thursday afternoon, Parker noted the merger likely will close in the third quarter this year pending further approvals, including those from the U.S. Justice Department.

Parker does not anticipate having to surrender slots at Reagan National (DCA) to gain that approval, even though he conceded that the combined airline would control two-thirds of the slots and half of the available seats there. “This is not a legal anti-trust issue,” he insisted, adding that the combined airline would control only 25 percent of the seats available in the entire D.C. metro market, including Dulles (IAD) and Baltimore-Washington International (BWI).

Expecting to become CEO of the combined airlines, Parker stressed that the merger would create overlap on only 12 of 900 existing domestic routes, thereby minimizing any anticipated reduction in operations employment or passenger service.

He praised unions at both companies for enabling “a historical level of management-labor cooperation” in sorting through related thorny issues such as senior list integration and ratifying new contracts. Parker also said that executive teams at both companies are planning the anticipated integration and likely would use systems already in place at American while embracing a philosophy of “adopt and go.”

“Get the integration done,” he stressed. “You can always go back and optimize.”

Parker expressed satisfaction with the industry’s recent strong financial results and its ability to rally around a central national airline policy. However, he lamented the slow pace of ATC modernization. “We have seen some benefit from the NextGen technologies in places, and Philadelphia is a good example,” he said. “But as an industry we have not seen [nearly] the rate of improvement that we should have seen for the amount of capital that has been invested. We don’t need any more investment until what we’ve put in place is working right.”

 

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