American, US Airways Merger Might Move Many Jobs
Feb 8, 2013
Thomas Olson
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A merger between US Airways Group and bankrupt American Airlines is unlikely
to change either carrier's operations at Pittsburgh International Airport,
said industry experts on Thursday.
At stake in the potential combination are more than 1,900 local jobs, a
state-of-the-art flight operations center and repair center operated by US
Airways and about 56 daily flights by both airlines.
After months of talks, the two carriers are intensifying discussions to
agree on control of a combined company before confidentiality accords expire
next week.
A deal would create the world's largest airline, vaulting it past rivals
that eclipsed American amid a consolidation wave during the past decade.
Spokesmen for each airline declined to comment on the negotiations.
Experts noted merger talks still could fall apart.
"I think it's a reasonable assumption that they may merge, but anything
could happen," said Darryl Jenkins, a veteran airline consultant in northern
Virginia. "Airline deals are always difficult to do, and things happen at the
last minute. Until something is final, it's always good to be cautious."
US Airways, the nation's fifth-largest carrier, is headquartered in
Tempe, Ariz. AMR Corp., the parent of third-largest American, is based in Fort
Worth.
The possible merger gained support last month from an ad hoc group
holding $1.5 billion in unsecured AMR debt, Bloomberg News reported. The
bondholders are pushing for a deal by Feb. 15, the expiration date for
non-disclosure agreements they signed with the two airlines.
US Airways still provides the most air service at Pittsburgh
International, although its presence is substantially smaller than it was
before dropping Pittsburgh as a hub for connecting flights in 2003.
"Initially, (a merger) shouldn't have any impact on air service here,"
said JoAnn Jenny, spokeswoman for the Allegheny County Airport Authority,
which operates Pittsburgh International.
"The only market where they overlap is New York, but it's also served by
other carriers," she said.
American, Delta, JetBlue and US Airways all fly from Pittsburgh to New
York daily.
US Airways operates 41 daily departures from Pittsburgh to nine
destinations. It employs 1,800 people locally, including flight and crew
dispatchers at US Airways' flight operations control center in Moon Township.
The $25 million facility, which opened in late 2008, is the airline's
nerve center, coordinating US Airways' more than 3,000 flights a day
systemwide, along with the crews who staff them.
"That's a state-of-the-art facility," said Jenkins. "If this were my
merger, I'd hold onto that."
American's flight operations control center is in Dallas. The analyst
said it also would be used for many months if the carriers merged.
American operates 15 flights a day from Pittsburgh to four cities. The
airline employs about 80 people here.
But even if American and US Airways strike a deal, it would be subject to
months of scrutiny by antitrust enforcers in the Department of Justice, said
Robert Mann Jr., head of R.W. Mann & Co. Inc., an airline consultant in Long
Island, N.Y.
"This is kind of the end of the line for major airline consolidation, and
Justice would want to make sure this got done right," said Mann.
In the past six years, Continental merged into United, AirTran merged
into Southwest, and Delta and Northwest combined. Mann noted the government
reviewed the Delta-Northwest merger deal for a half-year before giving the
combination a green light in mid-2008.
What's more, US Airways saw its May 2001 agreement to merge into United
Airlines fall apart two months later when Justice declared it would sue to
stop the deal out of antitrust concerns it posed on the East Coast.
Still unresolved is the role American CEO Tom Horton would play after a
merger. US Airways' merger proposal calls for CEO Doug Parker to hold that
position as well as chairman at the combined airline.
Bloomberg News contributed to this report.
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Distributed by MCT Information Services
Source: (c) 2013 The Pittsburgh Tribune-Review (Greensburg, Pa.)
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