US Airways CEO Doug Parker on Wednesday ratcheted up his campaign to merge with bankrupt American Airlines with a high-profile luncheon speech at the National Press Club, where he was flanked by American’s union leaders and where he pointedly said that everyone except American management supported a merger with his carrier.
“We’ve taken a long, hard look at American and we know that together we can build the greatest airline in the world,” said Parker, stressing the two carriers’ complementary service networks that do not overlap.
“So if a merger would benefit consumers, create a more competitive industry and bring about all these great things for American Airlines and US Airways, and if everyone who has studied it thinks it’s a good idea, the question then is, ‘Why isn’t it happening?’”
Saying that American had missed the merger wave and that US Airways had benefited from consolidation with America West, Parker said the time for action was now, while American is still in bankruptcy.
Parker’s aggressive strategy – wooing American’s unions and waging a very public merger campaign – over the past six months paid off last week when Fort Worth, Texas-based American said in a statement that it would consider all merger options even as it works out contentious labor contracts with its pilots, flight attendants and transport workers.
But Parker is at a standstill unless American makes a move while it has the protection of the bankruptcy court – at the moment only American can produce a plan to emerge from bankruptcy. Asked about a New York Times report that calculated American CEO Tom Horton stood to make $20 million from a post-bankruptcy merger, Parker, who described himself as a friend of Horton’s, said, “I find it noteworthy that the only opposition to the merger is senior management at American. We are hopeful that we can get their support for it at some point.”
In a response on the day the carrier reported profitable second quarter earnings, American parent AMR Corp. responded sharply to Parker’s comments:
"Today’s excellent results demonstrate that the new American is performing extremely well. Our increasing strength positions us well to evaluate the full range of strategic options versus our reorganization plan, to maximize value for our stakeholders and deliver the best outcome for our people. This will be a disciplined process guided by the facts and will not be influenced by baseless rhetoric."
American’s labor unions are in the peculiar position of negotiating with American at the same time that they are touting Parker’s merger vision. But they are also his best pressure point. “Ratification,” said Parker, “will be good for a merger.”
Parker’s personal guests at the head table were: Dave Bates, president of the Allied Pilots Association, which represents American’s pilots; Laura Glading, president of the Association of Professional Flight Attendants, which represent American’s flight attendants; and John Conley, the international vice president of the Transport Workers Union.
Parker asked the media “to hold everyone’s feet to the fire” because the “right answer” to American’s situation was the merger with US Airways.
“Everyone on Wall Street knows it. The employees of American and US Airways know it. The creditors watching the bond prices know it. The media knows it,” he said. “Now the public needs to know it.”
“There are 100,000 jobs at stake here,” said Parker. “Their fate should not be decided in the dark.”