Skift Take
Parker has put all the pieces into place to make best use of its rival's bankruptcy and American's labor problems have made a merger its best option. So when can this happen?
Doug Parker was snubbed three times as a merger partner in deal-making that produced the world’s biggest airlines. Taking over AMR Corp. may be his last chance to break into the top tier of U.S. carriers.
US Airways Group Inc.’s chief executive officer engineered the 2005 merger creating the company in its current form, ushering in a round of consolidation that reshaped the industry. With fewer competitors, the largest carriers have mostly stayed profitable even with higher fuel prices.
Now, AMR’s bankruptcy gives him an opening to orchestrate a deal to vault US Airways past its rivals to claim the No. 1 spot in global traffic. Falling short again would leave the Tempe, Arizona-based airline mired in fifth place among U.S. peers, with few prospects to improve that status.
[caption id="" align="alignright" width="350"] A US Airways plane in Santa Clara, California. Photo by Dylan Ashe.[/caption]
“What history proves in this industry is jogging in place normally results in road kill,” said Jeff Kauffman, a Sterne Agee & Leach Inc. analyst in New York. “I think Doug recognizes that very well.”
With AMR’s American Airlines resisting a merger and holding exclusive rights until year’s end to submit a formal restructuring plan, the 50-year-old CEO is wooing labor groups and bondholders at his intended target.
Labor Signal
American’s pilots rejected the airline’s final contract offer today, a “strong statement” that the union favors a merger with US Airways, according to Fred Lowrance, an Avondale Partners LL
