US Air says merger with American would benefit Chicago
BY FRANCINE KNOWLES Business Reporter firstname.lastname@example.org July 10, 2012 7:58PM
Doug Parker, CEO of US Airways, meets with the Sun-Times Editorial Board Tuesday, July 10, 2012, in Chicago. | John J. Kim~Sun-Times
Updated: August 12, 2012 6:42AM
Executives at US Airways, which has been pushing to acquire reluctant bankrupt American Airlines welcomed word Tuesday that American now plans to weigh merger options, and said Chicago would benefit from the merger.
“One of the markets that gets the most benefit from the merger is the Chicago market,” Scott Kirby, president of US Airways Group Inc., said to the Chicago Sun-Times Editorial Board on Tuesday in making the airline’s case for merging with American before it emerges from bankruptcy.
American CEO Thomas Horton said in a letter to employees Tuesday: “It now makes sense to carefully evaluate a range of strategic options, including potential mergers.” He said options “could make the new American even stronger.” Horton did not promise to pursue a merger while his company is still in bankruptcy.
US Airways Chairman and Chief Executive Officer Doug Parker expressed cautious optimism at news American is ready to consider potential mergers.
“We need to see the details,” Parker said. “We are hopeful. This is what we’ve been wanting.”
A US Airways-American merger would make it possible for passengers flying out of Chicago to connect to more markets on the West and East coasts than American as a standalone airline presently offers and it would support international growth, particularly benefiting business customers, Kirby said.
Over time, it means “more service, more cities that you can serve. You create a third competitor” to United and Delta, whose networks are presently much bigger than American’s, he said.
But it may not bring fare relief to consumers. So said airline industry consultant Robert Mann, president of R.W. Mann & Co., who noted airline industry consolidation has led to fewer competitors, reduced capacity and higher fares.
“If you’re a service seeker on American, this will be a positive,” he said. “If you’re just a plain price seeker, it may not necessarily be positive.”
American Airlines spokeswoman Mary Frances Fagan said American is in the “position of already being strong in Chicago, and we plan to grow in this critical market. . .We won’t speculate on consolidation scenarios or the impact on service.”
The merger would create the largest domestic carrier, and the combined networks would offer improved service through 539 daily departures with nonstop flights to 114 destinations around the world form Illinois, according to US Airways representatives.
US Airways executives were joined by representatives of American Airlines’ unions that have endorsed the merger plan of their employer’s rival.
Asked what a merged US Airways/American Airlines position would be on the need for a fourth runway at O’Hare, Parker said, “It’s not a huge deal to us right now. But certainly…American has come out opposed to it as have United. So I imagine if we get this done, we would be in a similar situation. But we haven’t reviewed the data in the detail that they have.”