A merger of US Airways Group Inc. and America West Holdings Corp. shouldn't reduce flights at Monterey Peninsula Airport, but it may open more flight connections to the East Coast, a Monterey airport official said Thursday.
A merger of US Airways and America West -- the nation's seventh- and eighth-largest carriers, respectively -- announced Thursday could generate an estimated $10 billion in annual revenue, executives said.
The companies, which reportedly have been in talks for several months, said they will operate under the US Airways name and be funded by $1.5 billion in new capital from a variety of investors, including aircraft maker Airbus. The new company will be led by Doug Parker, chief executive and president of America West Holdings, and a 13-member board that will include six members from America West and four from US Airways.
Monterey Peninsula Airport has two daily nonstop America West flights to Phoenix and is expecting a third to Las Vegas next month. Those flights are not expected to change or go away, said Tom Greer, the airport's general manager.
"From out standpoint, I think it's going to be transparent," Greer said. "It doesn't make me nervous. The industry has survived mergers before."
However, that's a decision for the carriers, not the airport. And in a letter to Greer on Thursday, airline executives said the merger "will require some changes to our current airport operations and facilities."
In the letter -- signed by Helen Tremont and Paul Lambert, vice presidents of corporate real estate for US Airways and America West, respectively -- the companies said the merger "presents exciting possibilities for our customers, employees and aviation partners," including low fares and flights to more than 200 cities across the United States, Canada, Mexico, the Caribbean and Europe.
The companies plan to build a low-cost airline business model to compete with rival Southwest Airlines Inc. and JetBlue Airways Corp. It also plans to maintain frequent flyer programs, airport clubs and assigned seating, according to the letter to Greer.
Greer said that "if there's a chance that this (merger) could work, it could open up eastern seaboard states for us."
If it doesn't work, he said, "somebody else will pick it (the flight services) up. People are always going to need to fly."
The merger is designed to provide the final investment necessary to allow US Airways to emerge from bankruptcy. The deal must be approved by the U.S. Bankruptcy Court in Alexandria, Va., where the merger proposal will be subject to competing bids.
In a conference call with reporters, Parker said the merger "creates the first nationwide full service low-cost airline."
"Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve," he said.
US Airways, which last year made its second trip into bankruptcy in two years, slashed worker pay by $1 billion a year and shed $3 billion in pension obligations.
The company has struggled since before the Sept. 11 terrorist attacks, which only sent its figures -- and that of the airline industry -- further downward.
Greer said the merger could help US Airways, which he said "has been on life support for way too long." He said the company has an unsteady reputation, at least in California, mainly because of its 1988 acquisition of California-based Pacific Southwest Airlines, or PSA.
Recognized by its signature smile painted on its airplanes, 40-year-old PSA had a solid reputation at the time it was acquired by US Airways. But the company has since become a relatively unknown regional carrier, Greer said.
"America West has had its share of troubles, (but) US Airways is not very respected in the West," he said.
US Airways announced Wednesday it would drop fares on its Monterey-Las Vegas flights, in response to a request by airport officials.