Posted on 05/19/2005 5:05:24 PM PDT by Dog Gone
PHOENIX — US Airways Group Inc. and America West Holdings Corp., the nation's seventh and eighth largest carriers, said today that they are merging.
The combined company, which will operate under the name US Airways, will be funded by $1.5 billion in new capital from a variety of investors, including aircraft maker Airbus.
The goal of the merger is to stitch together two geographically distinct carriers with a history of financial struggles into a stronger airline that would compete better with lower-cost rivals such as Southwest Airlines Inc. and JetBlue Airways Corp.
"Building upon two complementary networks with similar fleets, closely aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline," said Doug Parker, chief executive and president of America West Holdings. "Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve."
US Airways President and CEO Bruce Lakefield said the merger will ensure US Airways' long-term viability and the security of its employees.
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 Arlington, Va.-based carrier said its goal was to reinvent itself as a low-cost carrier like Jet Blue or America West. But even after the cost reductions, the airline struggled as fuel costs soared and low-fare competitors drove ticket prices down.
America West, which was founded in 1983 and is based in Tempe, Ariz., operates flights across the country through its hubs in Phoenix and Las Vegas.
America West operates in Houston out of George Bush Intercontinental Airport. In March 2005, The airline served nearly 42,000 passengers at Bush, according to Houston Airport System figures. US Airways, also operating out of Bush, served a little more than 37,000 in March, according to the same numbers.
When Parker took over as America West chief executive in 2001, the airline was dogged by a reputation as a carrier that delayed flights, lost luggage and left customers waiting.
The company was pushed to the brink of bankruptcy shortly after the Sept. 11, 2004 terrorist attacks and secured a $429 million loan guarantee from the federal government. Parker has said the guarantee allowed America West to avoid Chapter 11 bankruptcy, a move the airline might not have survived.
Its service record has since improved. In July 2003, the company reported its first of several quarters of profits after more than two years of losses. Its earnings have since have been mixed, due largely to high fuel costs and too many cheap fares in the market.
aviation ping
Bad airline + bad airline = Worse airline.
My thoughts exactly.
Inneresting ... and how will this affect my mother's retiree travel benefits? I'll have to call her!
Wonder if this means that UselessAir will fly out of SJC again.
UseLess Airways merges with America's Worst
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
MA before MI ... ;-)
I must've gotten lucky. At least the one time I flew US Air.
Last year I flew them to Grand Cayman (from Phoenix), round trip. The service...check in/out, coming back through customs, everything....was excellent.
Can't say the same for America WORST.
Absolutely, and I don't know if they make an airline worse than America West. I still have horrible memories from the 80's of that airline.
Aeroflot.
You've got that right !
Yippy Skippy
Possible ad Slogans
"Now you can lose your baggage in Philly, Pittsburgh, and Phoenix."
"East meets west and screws everything up in between:
"Philly courtesy and LA style punctuality"
What's the over/under on this future "paragon of quality service" ahem cough cough filing for chapter 11?
The Sept 11, 2004 terrorist attacks?
These dinosaur airlines owe so much to suppliers, associates,and pensions, that they are beyond broke yet can still squeeze them for enough scratch to pay off politicians. They are a dire threat. The military should temporarily keep them flying while the routes are auctioned off to sucessful businesses like Southwest.
I rather like the current version of America West. I'm afraid all of those bitter US Airways people who have been bumped to the bottom of the seniority list are going to come in and screw up America West's turnaround.
US (sc)AIR was originally a conglomeration of bad or failing Airlines. Most noteably Eastern Airlines.
Eastern Airlines was bought by Continental. USAirways bought out every other regional airline on the east coast.
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