US Airways chief digs in for Delta fight

[USA320Pilot]

US Airways chief digs in for Delta fight

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Regards,

USA320Pilot

 

[ClueByFour]

It is very important to note that he has no idea (including how the management or HQ structures would look) on how to operate the potential airline going forward. None.

This guy (and airline) is in real trouble once the ability to artificially shrink capacity stops.

 

[PITbull]

There's that word "synergy" being thrown around again for the billionth time...

Parker is right...a management team has not been decided along with the HQ, if there is a DL deal, does not mean the creditors or investors would approve of him as CEO. DL's approval to bring on Bethune... may be hired for more than just consulting work when all the dust settles.

And by the way...AWA DID NOT BUY U. THEY HAD NO MONEY TO DIG THEMSELVES OUT OF A SPIRAL, LET ALONE BY U.

THE SELECT INVESTORS WERE BROUGHT IN BY BRUCE LAKEFIELD AND TEAM, AND MADE THE DEAL, AS lAKEFIELD WAS NEVER MEANT TO BE PERMANENT CEO.

Parker is not only arrogant but delusional at best.

 

[UAL_TECH]

There's that word "synergy" being thrown around again for the billionth time...

Parker is right...a management team has not been decided along with the HQ, if there is a DL deal, does not mean the creditors or investors would approve of him as CEO. DL's approval to bring on Bethune... may be hired for more than just consulting work when all the dust settles.

And by the way...AWA DID NOT BUY U. THEY HAD NO MONEY TO DIG THEMSELVES OUT OF A SPIRAL, LET ALONE BY U.

THE SELECT INVESTORS WERE BROUGHT IN BY BRUCE LAKEFIELD AND TEAM, AND MADE THE DEAL, AS lAKEFIELD WAS NEVER MEANT TO BE PERMANENT CEO.

Parker is not only arrogant but delusional at best.

But will gain a fortune regardless of the outcome.....

Take Care,
B) UT

 

[Prince of PAWOBs]

But will gain a fortune regardless of the outcome.....

Take Care,
B) UT

True. And when you're rich I suppose it doesn't matter what anyone else thinks, because you are RICH.

Doug Parker is truly disappointing as an individual. He talked a good game, wanting all of us to trust him and give him a chance at the helm of the airline. He failed at that task, and I would bet that even his cronies wouldn't turn their backs on him for fear of a stiletto between the ribs.

No. I doubt that Doug will show his face again at a Town Hall meeting. Fleet service has little use for those that lie to your face, let alone via press release.

Doug will continue to seek his pot of gold at the end of someone else's rainbow with little if any concern for the consequences to the US workforce, and now DL's workforce as well. Well done, Parker, well done.

 

[X-U]

And this is the problem with this country."Leaders" are making decisions based on what is best to enrich themselves rather than what is best for the organization the are "leading". Taking money from the middle class and giving it to the rich, taking political power from the people and giving it to the corporations, it's all part of the plan to transform us from a democracy with a middle class into a feudal society with serfs.

 

[a320av8r]

Doug Parker is truly disappointing as an individual. He talked a good game, wanting all of us to trust him and give him a chance at the helm of the airline.

Sound familiar?
Latest of the long line of CEO's who have said "trust me" and then screwed us. This, AWA folks, is why the east doesn't drink Doogies Kool-aid. Different wolf- same clothing.

 

[PBI2FLL]

And this is the problem with this country."Leaders" are making decisions based on what is best to enrich themselves rather than what is best for the organization the are "leading". Taking money from the middle class and giving it to the rich, taking political power from the people and giving it to the corporations, it's all part of the plan to transform us from a democracy with a middle class into a feudal society with serfs.

Interesting analogy.

 

[DesertFA66]

There's that word "synergy" being thrown around again for the billionth time...

Parker is right...a management team has not been decided along with the HQ, if there is a DL deal, does not mean the creditors or investors would approve of him as CEO. DL's approval to bring on Bethune... may be hired for more than just consulting work when all the dust settles.

And by the way...AWA DID NOT BUY U. THEY HAD NO MONEY TO DIG THEMSELVES OUT OF A SPIRAL, LET ALONE BY U.

THE SELECT INVESTORS WERE BROUGHT IN BY BRUCE LAKEFIELD AND TEAM, AND MADE THE DEAL, AS lAKEFIELD WAS NEVER MEANT TO BE PERMANENT CEO.

Parker is not only arrogant but delusional at best.

I think you're mistaken on that. Parker had been looking for a merger partner for a couple of years. Often time, he told employees that America West could be the aquirer. It was a combination of Paker and Lakefield (with Parkers excellent reputation) that made it happen. (I'm not disputing the who bought who thing..i don't care about that crap!)

 

[700UW]

How US Airways/America West merger got off the ground
Talks between airlines began in 2003, but didn't get serious until this year
Sunday, May 22, 2005

By Dan Fitzpatrick, Pittsburgh Post-Gazette

The on-and-off, 18-month courtship between US Airways and America West Airlines finally clicked into place May 12 in Washington, D.C., high above the floor of the MCI Center, where executives from both airlines had gathered in US Airways' skybox to watch a Washington Wizards playoff game.

Just minutes before tip-off, with the din of exploding fireworks filling the arena, US Airways adviser John Luth received an e-mail on his BlackBerry from Air Canada Chief Executive Officer Robert Milton. It confirmed that Air Canada's board had approved an investment in the combined airline -- the final piece of a $1.5 billion financing package needed to make the deal work.

Luth waved his BlackBerry, smiled and gave everyone the news. He congratulated Doug Parker and Bruce Lakefield, the chief executive officers of America West and US Airways, and broad smiles broke out throughout the box.

The merger was on.

Announced a week later at the Tempe, Ariz., headquarters of America West, the agreement between the nation's seventh-and eight-largest airlines paired a twice-bankrupt, East Coast legacy carrier with a younger, smaller, low-cost airline that does much of its flying on the West Coast.

If they can win a slew of antitrust, shareholder and bankruptcy court approvals, US Airways and America West together would surpass discount king Southwest Airlines in size, becoming the No. 6 carrier in the nation. Together, they also could usher in an era of consolidation in the troubled airline industry, which has lost more than $30 billion since 2001.

But there were several twists along the way, according to people familiar with the events. America West was not the only carrier to express interest in US Airways, nor was America West the only partner US Airways pursued.

The search for a deal began in the fall of 2003, when David Siegel was still US Airways' chief executive officer. Siegel had led US Airways through its first bankruptcy and wrested more than $1 billion in concessions from the company's labor unions. But even as the carrier completed a painful round of cost cuts and emerged from bankruptcy, Siegel knew US Airways was still too small and too inefficient to compete against discounters such as Southwest, which had already announced plans to start service in Philadelphia, a US Airways' hub.

Siegel was convinced that for US Airways to avoid the fate of failed carriers such as Eastern Airlines and Pan Am, both of which liquidated in the 1980s, he would have to bring US Airways' costs down further and position the airline for consolidation with another carrier. He explored several options.

Acquire United Airlines, the nation's No. 2 carrier. That option was code-named "Project Minnow," with US Airways as the small fish gobbling the bigger one.

Combine with British entrepreneur Richard Branson's Virgin Atlantic, which was interested in US Airways' Washington-Boston-New York shuttle, along with slots and gates in the Northeast.

Split the airline in two and merge the Philadelphia and Charlotte, N.C., hub-and-spoke network with one carrier and its slots and gates in Washington, Boston and New York with another.

But US Airways ultimately rejected those options. United did not have any interest in a deal and was too distracted by its own struggles in bankruptcy. Virgin Atlantic wanted lots of US Airways assets -- gates, planes, airport equipment -- to help launch a new U.S. airline, but all it would offer in retrun was the Virgin brand name. US Airways also turned down several inquiries from other carriers -- including Southwest, JetBlue Airways and AirTran Airways -- about acquiring the company's assets but not its employees.

In the end, only America West wanted both.

Siegel made the initial connection. He knew Parker and Executive Vice President Scott Kirby at America West. Their first face-to-face meeting was in October 2003, over dinner in a Washington, D.C., restaurant. They were joined by then-US Airways Chief Financial Officer Neal Cohen.

But the talks ended several months later. At the request of US Airways' board, Siegel departed from the company in April 2004. According to Parker, the first round of discussions failed because US Airways' costs were still too high. Siegel had started a campaign to lower union costs further, but labor leaders refused to deal with him, contributing to his ouster.

Retired Lehman Bros. executive Bruce Lakefield, a friend of US Airways chairman David Bronner, replaced Siegel and sought to save US Airways. He asked unions to help with another round of concessions. When that failed, Lakefield took the company into bankruptcy again and squeezed another $1 billion in concessions from the unions, using the power of the U.S. Bankruptcy Court to hammer home new contracts modeled after America West's labor agreements.

In January, with fuel prices at a record high and doubts aired about US Airways' survival after its Christmas baggage meltdown in Philadelphia, Lakefield picked up the phone and called Parker, suggesting that "maybe we should begin those talks again," according to Parker.

But America West did not have enough cash to lift US Airways out of bankruptcy. It was up to Luth, the US Airways adviser, to find enough investment money to piece the deal together and give the combined company a fighting chance to thrive in the battered airline industry.

Luth and US Airways had serious discussions with more than a dozen investors. They all requested shared participation in a merged airline -- no one wanted to take on all the risk. The Retirement Systems of Alabama, which rescued US Airways from its first bankruptcy in 2003 with a $240 million investment, stands to lose it all if US Airways emerges from bankruptcy and issues new stock.

Luth went after the companies that had something to gain from an investment in US Airways and America West. Aircraft maker Airbus agreed to provide $250 million in exchange for US Airways' pledge to buy dozens of A320 jets in the future. Regional commuter carrier Air Wisconsin Airlines made a $125 million investment in exchange for a jet services partnership. The Appleton, Wis.-based airline will fly for the merged carrier on a contract basis.

Credit card companies may provide $300 million in order to reach new customers. And once-bankrupt Air Canada offered $75 million, good for a 7 percent stake in the new company, in exchange for the rights to bid on the maintenance contract for the new carrier's fleet of 361 jets.

Air Canada was the last in line.

Once its approval came last Thursday, employees at both airlines scrambled to obtain approval from their boards of directors. US Airways' directors signed off Wednesday, over the telephone. America West's board approved it Thursday, in Tempe.

Labor leaders were briefed, and a press release was sent out. Parker and Lakefield spent much of Thursday night explaining the deal to reporters before Lakefield took a red-eye flight back to Washington. Parker, who has been tapped to lead the merged airline, met with employees and went home. Before going to bed, he explained the deal in one final live shot with local TV, from his house.
-----------------------------------------------------------
(Dan Fitzpatrick can be reached at [email protected] or 412-263-1752.
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Correction/Clarification: (Published 5/23/05) Air Canada, as part of an investment in the proposed US Airways-America West Airlines merger, has the right to bid only on the maintenance work that can be outsourced under existing labor contracts. It does not have the right to do the maintenance work on all 361 jets belonging to the combined airline, as described incorrectly in a story Sunday.

 

[wench1]

BFD--not impressed.
:down:

 

[hp_fa]

And this is the problem with this country."Leaders" are making decisions based on what is best to enrich themselves rather than what is best for the organization the are "leading". Taking money from the middle class and giving it to the rich, taking political power from the people and giving it to the corporations, it's all part of the plan to transform us from a democracy with a middle class into a feudal society with serfs.

Amen.

 

[Prince of PAWOBs]

And this is the problem with this country."Leaders" are making decisions based on what is best to enrich themselves rather than what is best for the organization the are "leading". Taking money from the middle class and giving it to the rich, taking political power from the people and giving it to the corporations, it's all part of the plan to transform us from a democracy with a middle class into a feudal society with serfs.

I'm agreeing with X-U here. This is happening everywhere, not just the airline industry. The concept of a middle class society is slowly disappearing. The representative democracy that we've been taught about since childhood is turning into a plutocracy that rules by money and ridiculous laws. If you want to survive, then start acquiring wealth like the rest of them or else you'll become a "serf" if you aren't already.

No. The sky isn't falling. It already fell.

 

[gaucho99]

And this is the problem with this country."Leaders" are making decisions based on what is best to enrich themselves rather than what is best for the organization the are "leading". Taking money from the middle class and giving it to the rich, taking political power from the people and giving it to the corporations, it's all part of the plan to transform us from a democracy with a middle class into a feudal society with serfs.

I disagree. The rank and file employees of US and DL, the so called middle class will have a much better future as a merged carrier than either will alone. As stand-alone carriers, the risk of another bankruptcy with layoffs and wage reductions is just a few years away.

 

[longing4piedmont]

I disagree. The rank and file employees of US and DL, the so called middle class will have a much better future as a merged carrier than either will alone. As stand-alone carriers, the risk of another bankruptcy with layoffs and wage reductions is just a few years away.

You got that right. We will be seeing US in BKIII if this deal does not go through. (and big bus drivers at Greyhound rather than driving the employee bus in CLT and 320 pilots flying barbie jets for Mesa or doing those chatty Cathy tours on those big double decker buses in NYC. At least one can get off of one of those......)