US Air CEO Says Merger Not Mandatory

March 21, 2012

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US Airways, which is exploring a potential merger with bankrupt American Airlines, believes it can continue to thrive as a stand-alone carrier if its larger rival spurns its overtures, the head of the low-cost airline said on Wednesday.

"US Airways is doing really well on a stand-alone basis and I'm really happy with the way we're performing," US Airways chief executive Doug Parker said on the sidelines of a media event hosted by the airline.

"But that doesn't mean we don't look at opportunities that might arise," Parker said.

Parker began his airline career at AMR in 1986, at about the same time as Tom Horton, who is CEO of American's parent AMR.

The US airline industry has been battered for years by skyrocketing fuel prices, over capacity and economic weakness that has drained travel demand. Many carriers - including US Airways - have recovered, however, thanks to downsizing, higher fares and a host of new fees.

US Airways posted a net profit of USD$111 million for 2011, compared with a loss of USD$808 million in 2008. President Scott Kirby said the company expects revenues to remain strong in 2012.

Parker, a long-time champion of airline consolidation, talks less these days about consolidation, even as he tries to jumpstart merger talks with American. He would not comment on potential synergies with AMR or how much he might be willing to pay for the assets of the bankrupt carrier. But Parker disclosed in late January that his company had hired advisors to explore opportunities with AMR.

US Airways was formed from a 2005 merger with America West Airlines. US Airways later attempted an unsuccessful hostile takeover of Delta Air Lines and engaged in extensive merger talks with United Airlines. Delta later merged with Northwest Airlines and United joined up with Continental.

The company regards its merger with America West as a success, although it has yet to fully integrate its pilots and flight attendants.

Delta also is exploring merger prospects with AMR and with US Airways, sources have said.

Parker, who previously was the CEO of America West Airlines, kept that post after America West bought US Airways out of bankruptcy. He declined to comment on whether he wants to lead an airline created from an AMR/US Airways merger.

"I like my job. I like where I live and I'm happy. Life in general is good," Parker said.

American, however, has said it has no interest in a merger with US Airways or any other company while it restructures in bankruptcy. The carrier, which has been in Chapter 11 since November, has a court-granted right to pursue its own business plan without intrusion from other parties.

The company has asked the judge to extend that right, which expires at the end of March, to September 28. AMR has not ruled out a merger at some point after its bankruptcy.

Parker, a risk-taker who once ran with the bulls in Pamplona, spent four years at Northwest Airlines as treasurer and vice president of financial planning and analysis.

Prior to his tenure at Northwest, he worked in finance at American Airlines from 1986 to 1991.

The 50-year-old Parker, who is known to be more open about his merger ambitions than some of his rivals, takes pride in that style.

"It works a lot better for me if I'm a lot more transparent," he said.