Thursday, July 19, 2012

US Airways CEO: Merger 'good news' for Charlotte

US Airways CEO Doug Parker visited the editorial board this morning as part of his nationwide tour to promote the benefits of his airline's potential merger with American Airlines. The merger would make the combined airline the largest in the world, and it has the support of Wall Street analysts and American's unions - but not senior executives at American, who seem to prefer at the moment to emerge from bankruptcy and navigate their own course. Hence, Parker's publicity tour.

If you're a consumer, airline mergers generally aren't things to celebrate, because they typically result in less competition, fewer flights, and higher fares. In Charlotte, there's the additional worry about a US Airways merger's impact on our city's hub status.

No worries, says Parker, of the possible marriage. "It's only good news for Charlotte," he said.

Parker said that American, which operates primarily out of Dallas-Ft. Worth and Chicago, has few overlapping routes with US Airways. For consumers, he said, that means the merger likely wouldn't result in fewer flights and increased fares.

For Charlotte's hub, the merger would create more flights as new route opportunities emerge to connect passengers to small cities in the Midwest and East, Parker said. US Airways estimates the combined networks will result in 806 daily departures in Charlotte, up from the current 650 the carrier now has here.

That's important news for Charlotte and its airport, which announced earlier this year a $1 billion expansion planned over the next seven years. The proposals include an expanded main terminal, a fifth runway and a new eight-lane entrance road. It's a risky plan, given the industry trend of shrinking hubs. Two other cities, St. Louis and Pittsburgh, embarked on similar $1 billion expansions in recent years, only to lose hub status and flights.

Parker said he supports the expansion - and so have we - and he said a merger with American would help strengthen Charlotte, which is the fourth largest single airline hub in departures in the world. The airline's commitment to Charlotte would not change, he said.

There's a lot left to happen before US Airways becomes a merged American Airlines. Parker still has some wooing to do - he had oatmeal with American CEO Tom Horton this morning, the Wall Street Journal reports - and American has to work its way through the bankruptcy process whether it merges or not. Don't look for any news until late this year or early in 2013.

Peter St. Onge


Anonymous said...

Sounds wonderful. But there were some things Parker said I'm finding a bit difficult to believe.

"American has a larger network in the some cities they serve out of Chicago and Dallas would all of a sudden make sense to serve out of Charlotte, where they don’t today in the US Airways system.” - So we are to believe that American would just hand the world's #2 airport to United on a silver platter? Hmmmmm...

"American...could have more than 800 flights a day from Charlotte Douglas." - The skepticism I have of point 1, combined with no reason to believe any of the money-making international flights will be from here instead of Miami, and the knowledge that DFW will always be their #1 hub, makes me skeptical of that number.

Also, any increase in number of flights would mean American has an even larger percentage of CLT flights, which can only mean higher prices, especially with Southwest continuing to avoid CLT like it's the AIDS virus or something.

I'll be quite happy to be wrong. But I'm not sold yet.

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Samuel said...

Baloney that it's good for CLT -- Parker Propaganda. This only concentrates more fares with USair, thus allowing them to further raise prices for their crappy flights and horrible service.

I'm flying more out of Raleigh-Durham, Greenville-Spartanburg and Greensboro. Flights are much cheaper, parking much better, and since these airports aren't so crowded I don't lose very much time driving to them.

Samuel said...
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