July 20--US Airways CEO Doug Parker said he expects Charlotte will grow significantly as an airport hub if his company merges with American Airlines, with flights from Charlotte rising from about 630 to as many as 800 a day.
Tom Horton, chief executive of American parent AMR Corp., met with Parker early Thursday to discuss a potential merger between the two companies. Horton has resisted a merger for months.
Parker spoke with the Observer after the meeting Thursday. He was visiting Charlotte as part of a series of public appearances to try to build support for the potential deal, which Parker hopes to complete before AMR emerges from bankruptcy.
Such a combination would boost Charlotte Douglas International Airport's stature as a major hub, Parker said. In previous interviews, he had said Charlotte's status as a hub is safe but hadn't promised growth.
The new American Airlines would be headquartered in Dallas-Fort Worth and adopt the American brand.
Charlotte is US Airways' busiest hub, with the airline accounting for almost 90 percent of the airport's daily air service. US Airways also has more than 7,000 employees based in Charlotte. Parker said he expects the Charlotte headcount to grow in the event of a merger with American, because of the hub's importance in the merged carrier's network.
"We believe we'd need more flights out of Charlotte than we would even as US Airways stand-alone," Parker said. "American has a larger network in the Midwest than US Airways does, so some cities they serve out of Chicago and Dallas would all of a sudden make sense to serve out of Charlotte."
The Thursday morning meeting with Horton at a Washington, D.C., hotel was the first time Horton initiated a meeting about the merger, Parker said.
Breakfast meeting
"It's the first time he's reached out," Parker told the Observer. The two talked over oatmeal. "He saw I was in Washington yesterday and said he was coming to Washington and said, 'Do you want to get together for breakfast?'?"
Horton has been seeking to have American emerge as a stand-alone company since the airline entered bankruptcy protection in November. Parker, a longtime advocate of airline industry consolidation, has been persistently -- and publicly -- pursuing American, striking tentative deals with American's main unions. He's offered them terms that would save more jobs and offer less draconian cuts than American's stand-alone plan.
US Airways says the merged airline would have $1.2 billion in revenue and cost synergies, allowing it to pay employees more and cut fewer jobs.
Last week, American announced it would consider mergers as an alternative to remaining a stand-alone company, but said it would look at a variety of interested partners, not just US Airways.
"The meeting was polite, not a particular amount of progress made," Parker said of Thursday's breakfast. "He related to me that they are indeed planning to have a process, and nondisclosure agreements would be coming before too long to carriers they choose to send them to."
Nondisclosure agreements would allow US Airways and American to take a detailed look at each other's finances and operations, an important step before a merger.
Statement from American
In a statement, American said Horton told Parker that the company will look at multiple options: "He emphasized that American's management has an obligation to its own stakeholders, as well as the support of the board and the (unsecured creditors committee), to pursue the right plan, which includes several interesting options, to deliver the highest value for our financial stakeholders and the best outcome for our people."
Parker said he remains concerned that American will seek to drag out the merger process while planning to remain independent.
"We're happy to hear there's a process, but we'd like to know what is the process," he said. "If their desire is to just get through the bankruptcy process and emerge stand-alone, that's what we're a little worried about ... You could, for example, get to a point where the stand-alone plan is almost done and you haven't done a lot of work on the merger."
Parker has won the support of American's main labor unions, but hasn't yet secured the support of US Airways' own work groups. The company hasn't been able to negotiate a combined contract with its pilots and flight attendants since a 2005 merger with America West.
"They are not yet supportive, but also, worth noting, they haven't come out in opposition," he said of the US Airways' unions.
He said the company and American's unions will work to gain the support of US Airways' unions. "If we ever get this done, we'll have their full support. By the time we get to announcing a merger, I expect we'll have all our unions standing shoulder to shoulder."
Aggressive push
Industry insiders and analysts have described Parker's public merger push as aggressive.
On Thursday, he said he felt the benefits of a merger, combined with American's unwillingness so far, justify his tactics.
"There's no need to be aggressive if there are two willing partners. The connotation that we're aggressive is we're doing this while the other side isn't excited about it just yet. That's true," he said.
"The alternative would be to say, 'Well, American doesn't want to do it, so we'll just keep doing what we're doing.' I don't think that's right," Parker said.
American has the exclusive right to present its own reorganization plan through the end of the year. Parker said he hopes to win approval for a merger from the company's creditors before that, but that he would be open to pursuing a merger even after American emerges from bankruptcy.
"If indeed we didn't get it done for some reason in bankruptcy, and they emerged, and it's a year from now, does it make sense? Of course," Parker said. "The real point is, we may not be available. Something else might happen."
Portillo: 704-358-5041 On Twitter @ESPortillo
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