i know its been posted. but you have to have a subscription to read . He's the exec at controls of US Airways' major merger
America West's Kirby talks with Observer about future of airlines
TONY MECIA
Staff Writer
Will the merger between US Airways and America West produce a strong new force in the U.S. airline industry -- or lead to yet another round of financial troubles?
The answer in large part depends on how well company management integrates the No. 7 and No. 8 airlines. That process started in earnest a few weeks ago, even though the deal isn't expected to close until early October.
Leading the integration is Scott Kirby, 37, America West's executive vice president of sales and marketing, a post he's held for four years. A graduate of the U.S. Air Force Academy, Kirby joined America West in 1995 after stints as an operations consultant at Sabre Decision Technologies and as a Pentagon economist.
The Observer spoke to him last week about the integration and the outlook for the new company. The interview was edited for length and clarity.
Q. Charlotte is a pretty small city to have such a big hub. Why should people in Charlotte have confidence you're not going to pull back as US Airways has in Pittsburgh? Charlotte is and will be the largest market for US Airways once we complete the merger. Charlotte contains among the best markets in the US Airways route system today. We expect that to continue.
It is so large and so material to the organization that it's hard to envision a scenario where we could close Charlotte and even dispose of the aircraft. It's simply too big for us -- much like Phoenix is for America West. It's too big to not remain a significant part of the network.
Q. Do you expect airfares in the hubs to fall or will they stay about the same? We can't talk about fares and what they might do (because of antitrust concerns).
Q. I'm asking generally. People say, America West is a hybrid low-cost carrier, it's coming into Charlotte, are we going to see any dramatic changes here? We're not a hybrid. We are a low-cost, low-fare carrier. I would leave it at that.
Q. You recently announced your top managers, and almost all are from America West. A lot of people on the East Coast don't know who these America West people are. What are you guys like? It's a hard question for me to answer ...
Q. Do you go out drinking? Do you hang out socially? We do hang out socially. We're informal and probably a little more relaxed than your typical large company.
Q. It seems like a lot of your top people are pretty close to 40 years old. Other companies have older folks running airlines. How does your youthfulness transfer into the business operations? I'm not sure if it's youthfulness or not, but one of the things we pride ourselves on is a creative, innovative culture and a focus on employees and employee morale. We hope we can give employees the tools and leadership to allow them to succeed and deliver that service to the customers.
We have history with America West, especially in the last three or four years, of leading the industry in a number of areas that the industry ultimately follows us on.
We were the first traditional hub-and-spoke carrier to go to a low-cost carrier pricing structure. At the time we did that, a lot of analysts and industry pundits thought that meant the doom of America West.
We were the first airline to sell meals on board, which seems normal now but at the time was revolutionary. We were the first airline to sell gift cards.
Essentially, we've been willing to reinvent the business and take chances. So far, for the most part, those chances have paid off.
Q. Where do you see the industry heading in the next few years? If oil stays high, there's going to continue to be a lot of stress on the industry. If fuel prices stay high, you will see less capacity in the domestic industry one way or another, which will help raise revenues.
That can happen one of three ways: bankruptcies, consolidation or a number of airlines shrinking. I really don't know how that will happen.
Q. If all these other airlines are getting their costs down through bankruptcies and labor negotiations, how do you stay ahead of the pack? US Airways will now have labor costs that are below certainly all of the legacy carriers still, and below even where they're targeting, frankly. In addition, America West historically has had nonlabor, nonfuel expenses that are well below the rest of the industry, and we expect that to continue.
Other airlines that have already been through a restructuring, like American and United, still have costs that are significantly higher than America West. Our cost advantage may not be quite as large if other carriers restructure, but we still expect to maintain a significant cost advantage vs. the legacy carriers.
Q. What are the major stumbling blocks or greatest difficulties in trying to integrate these two companies? Long term, probably the area that has the most opportunity (to be difficult) is to combine the two cultures and do everything necessary to get 40,000 employees working together and on the same team.
In the short term, we're mostly concerned with systems, making sure that our reservations systems, frequent flier systems, revenue management systems, et cetera, can talk to each other.
Q. What are some of the things you're working on? There are a lot of areas we're working on. One of the most critical is the customer-facing component of the integration. Our goal on day one is to present a single face to the customer.
What that means is the integration would be seamless for our customers -- whether they buy a ticket on America West Airlines flights or US Airways flights, whether they're in US Airways' Dividend Miles program or the America West FlightFund program -- that we would be able to deal with those customers at any airport or any reservations center that they contact.
Q. How is integrating the frequent flier programs going? From a consumer's perspective, the frequent flier program integration will be virtually done on day one. Between now and the end of the year, we will synchronize the two programs, which means we will have consistency in terms of rules, restrictions, and award availability.
Q. What about naming rights on arenas? There's a lot of interest in America West Arena in Phoenix, and there's an arena in Charlotte that's looking for a corporate name. We have had some preliminary discussion with the Phoenix Suns, who own the arena here in Phoenix, and that's all we've done.
America West's Kirby talks with Observer about future of airlines
TONY MECIA
Staff Writer
Will the merger between US Airways and America West produce a strong new force in the U.S. airline industry -- or lead to yet another round of financial troubles?
The answer in large part depends on how well company management integrates the No. 7 and No. 8 airlines. That process started in earnest a few weeks ago, even though the deal isn't expected to close until early October.
Leading the integration is Scott Kirby, 37, America West's executive vice president of sales and marketing, a post he's held for four years. A graduate of the U.S. Air Force Academy, Kirby joined America West in 1995 after stints as an operations consultant at Sabre Decision Technologies and as a Pentagon economist.
The Observer spoke to him last week about the integration and the outlook for the new company. The interview was edited for length and clarity.
Q. Charlotte is a pretty small city to have such a big hub. Why should people in Charlotte have confidence you're not going to pull back as US Airways has in Pittsburgh? Charlotte is and will be the largest market for US Airways once we complete the merger. Charlotte contains among the best markets in the US Airways route system today. We expect that to continue.
It is so large and so material to the organization that it's hard to envision a scenario where we could close Charlotte and even dispose of the aircraft. It's simply too big for us -- much like Phoenix is for America West. It's too big to not remain a significant part of the network.
Q. Do you expect airfares in the hubs to fall or will they stay about the same? We can't talk about fares and what they might do (because of antitrust concerns).
Q. I'm asking generally. People say, America West is a hybrid low-cost carrier, it's coming into Charlotte, are we going to see any dramatic changes here? We're not a hybrid. We are a low-cost, low-fare carrier. I would leave it at that.
Q. You recently announced your top managers, and almost all are from America West. A lot of people on the East Coast don't know who these America West people are. What are you guys like? It's a hard question for me to answer ...
Q. Do you go out drinking? Do you hang out socially? We do hang out socially. We're informal and probably a little more relaxed than your typical large company.
Q. It seems like a lot of your top people are pretty close to 40 years old. Other companies have older folks running airlines. How does your youthfulness transfer into the business operations? I'm not sure if it's youthfulness or not, but one of the things we pride ourselves on is a creative, innovative culture and a focus on employees and employee morale. We hope we can give employees the tools and leadership to allow them to succeed and deliver that service to the customers.
We have history with America West, especially in the last three or four years, of leading the industry in a number of areas that the industry ultimately follows us on.
We were the first traditional hub-and-spoke carrier to go to a low-cost carrier pricing structure. At the time we did that, a lot of analysts and industry pundits thought that meant the doom of America West.
We were the first airline to sell meals on board, which seems normal now but at the time was revolutionary. We were the first airline to sell gift cards.
Essentially, we've been willing to reinvent the business and take chances. So far, for the most part, those chances have paid off.
Q. Where do you see the industry heading in the next few years? If oil stays high, there's going to continue to be a lot of stress on the industry. If fuel prices stay high, you will see less capacity in the domestic industry one way or another, which will help raise revenues.
That can happen one of three ways: bankruptcies, consolidation or a number of airlines shrinking. I really don't know how that will happen.
Q. If all these other airlines are getting their costs down through bankruptcies and labor negotiations, how do you stay ahead of the pack? US Airways will now have labor costs that are below certainly all of the legacy carriers still, and below even where they're targeting, frankly. In addition, America West historically has had nonlabor, nonfuel expenses that are well below the rest of the industry, and we expect that to continue.
Other airlines that have already been through a restructuring, like American and United, still have costs that are significantly higher than America West. Our cost advantage may not be quite as large if other carriers restructure, but we still expect to maintain a significant cost advantage vs. the legacy carriers.
Q. What are the major stumbling blocks or greatest difficulties in trying to integrate these two companies? Long term, probably the area that has the most opportunity (to be difficult) is to combine the two cultures and do everything necessary to get 40,000 employees working together and on the same team.
In the short term, we're mostly concerned with systems, making sure that our reservations systems, frequent flier systems, revenue management systems, et cetera, can talk to each other.
Q. What are some of the things you're working on? There are a lot of areas we're working on. One of the most critical is the customer-facing component of the integration. Our goal on day one is to present a single face to the customer.
What that means is the integration would be seamless for our customers -- whether they buy a ticket on America West Airlines flights or US Airways flights, whether they're in US Airways' Dividend Miles program or the America West FlightFund program -- that we would be able to deal with those customers at any airport or any reservations center that they contact.
Q. How is integrating the frequent flier programs going? From a consumer's perspective, the frequent flier program integration will be virtually done on day one. Between now and the end of the year, we will synchronize the two programs, which means we will have consistency in terms of rules, restrictions, and award availability.
Q. What about naming rights on arenas? There's a lot of interest in America West Arena in Phoenix, and there's an arena in Charlotte that's looking for a corporate name. We have had some preliminary discussion with the Phoenix Suns, who own the arena here in Phoenix, and that's all we've done.
