Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

US Airways, America West agree to merge
associated press ^ | May 19, 2005 | JACQUES BILLEAUD and MATT BARAKAT

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.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: airbus; airlines; americawest; usairways
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-69 next last
To: slapshot

Chortle!


21 posted on 05/19/2005 5:30:20 PM PDT by Tax-chick (I'm a shallow, demagoguic sectarian because it's easier than working for a living.)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Lesforlife

I didn't even notice that. The AP is really sloppy.


22 posted on 05/19/2005 5:32:16 PM PDT by Dog Gone
[ Post Reply | Private Reply | To 15 | View Replies]

To: HostileTerritory

Damn, I miss Piedmont.


23 posted on 05/19/2005 5:32:34 PM PDT by SC Swamp Fox (Aim small, miss small.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: Pikamax

US Air bought PSA and brought their east coast stuffed shirt attitude and got flat run out of the western market.

If they pull the same thing they will lose all of America West's customers.

I used to fly PSA weekly at one time and after one flight on US Air you couldn't make me fly with them if it was for free.


24 posted on 05/19/2005 5:33:38 PM PDT by dalereed
[ Post Reply | Private Reply | To 3 | View Replies]

To: slapshot

"We are Fly-Over Country"

(Over-priced, over-booked, over-rated...)


25 posted on 05/19/2005 5:34:58 PM PDT by mikrofon (Over-and-Out)
[ Post Reply | Private Reply | To 14 | View Replies]

To: HostileTerritory
Eastern Airlines was bought by Continental. USAirways bought out every other regional airline on the east coast.

Ignorance of youth. I was fairly young when this happened and just made an association without fact. I did find the following which makes it appear the Eastern eventually just liquidated. "Eastern did not fare well in the 1980s. Under Borman's shaky command, the company was in deep trouble as a result of major disagreements between management and the labor unions, and also because of major debt from purchases in the late 1970s. As Borman ineffectively tried to get pay cuts to compensate for debts, Eastern began to rack up year after year of losses until late 1985, when it had a debt of $3.5 billion. It was at this point that Frank Lorenzo, the infamous airline powerbroker who controlled Continental Airlines, stepped in. After Borman failed to get any significant concessions from his trade unions, Lorenzo bought the whole airline for only $615 million, adding Eastern to his existing prizes of People's Express, Frontier Airlines, Texas Air, and New York Air. Lorenzo was ruthless in using Eastern's core assets for his other airlines, devising various ways to use them to make money for his other properties. He let Texas Air “purchase” Eastern's advanced reservation system but issued only an I.O.U. for it. Eastern then had to pay Texas Air a monthly fee of $10 million to use its own system. He “sold” six of Eastern's planes to Continental but paid nothing for them. The result was that, to survive, Eastern had to sell off aircraft and lay off workers in large numbers. As tensions mounted between the labor unions and Lorenzo's harsh tactics, Lorenzo slowly began to dismantle Eastern and sell off its parts. When the unions struck in March 1989, Lorenzo filed for bankruptcy. This gave him some breathing room and allowed him to use strikebreakers to continue operations. By this time, however, Eastern was collapsing under its debt, and finally in January 1991, the airline completely ran out of money to operate. In late 1991, the airline was liquidated. Thus ended the life of one of America's greatest domestic airlines."

26 posted on 05/19/2005 5:41:35 PM PDT by IamConservative (To worry is to misuse your imagination.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: Mr. Jeeves
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.

What makes you think we will be on the bottom of a combined list? Our two airlines have shared unions, with codified merger policies. Most likely, where there is a common union, it will be date-of-hire, with fences to protect current positions.
27 posted on 05/19/2005 6:09:32 PM PDT by safisoft (Give me Torah!)
[ Post Reply | Private Reply | To 17 | View Replies]

To: nkycincinnatikid
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.

Costs at both America West and US Airways are LOWER than Southwest. The combined airline will actually be overall LOWER in union representation that Southwest.
28 posted on 05/19/2005 6:11:21 PM PDT by safisoft (Give me Torah!)
[ Post Reply | Private Reply | To 16 | View Replies]

To: SC Swamp Fox
Damn, I miss Piedmont.

LOL! My cousin was a pilot with Piedmont, and now he's with USAir. I guess he'll retire soon, and live (in Pinehurst) on his dividends.

29 posted on 05/19/2005 6:12:52 PM PDT by Tax-chick (I'm a shallow, demagoguic sectarian because it's easier than working for a living.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: IamConservative

No part of Eastern wound up in US Air. US Air did buy a West Coast airline PSA (remember the smiley face?) which they proceeded to abandon. US Air had hub in LA at one time as a result of that buyout but failed to capitalize on it and shut it all down.


30 posted on 05/19/2005 6:14:50 PM PDT by Arkie2 (No, I never voted for Bill Clinton.)
[ Post Reply | Private Reply | To 18 | View Replies]

To: safisoft
My cousin, a mechanic with USAir in Pittsburgh, was recently laid off. Sixteen years of service and his number came up..gone. I hope he has a chance to get his job back :~(

sw

31 posted on 05/19/2005 6:15:46 PM PDT by spectre (Spectre's wife)
[ Post Reply | Private Reply | To 27 | View Replies]

To: safisoft

Mergers s^@$ lemons. The only folks who benefit are all the ones at the top. Everyone else gets blindsided believing their reps work for them. Ha. AA promised a good deal to the pilots who are sitting on the street as TWA folks fly in their seats.


32 posted on 05/19/2005 6:16:19 PM PDT by getmeouttaPalmBeachCounty_FL (H.R. 698 - go drop anchor somewhere else)
[ Post Reply | Private Reply | To 27 | View Replies]

To: getmeouttaPalmBeachCounty_FL

I don't think more than a handful of the TWA guys survived the recent layoff at AA. Most of the TWA crew were tacked to the bottom of the AA seniority list with a few very senior pilots at TWA getting positions at AA senior enough to stay on.


33 posted on 05/19/2005 6:20:07 PM PDT by Arkie2 (No, I never voted for Bill Clinton.)
[ Post Reply | Private Reply | To 32 | View Replies]

To: dalereed

I remember the great days back in the 80's when there was Air Cal and PSA flying between LA and SF and San Jose. They were neck and neck competitors and would take each other's tickets from you just to get their competitor's business. PSA had friendly hot flight attendants - but really packed you in. Air Cal had a totally like laaaid back attitude and seats so widely spaced that you couldn't reach the seat in front of you with your foot.

We would take a 7 am flight from SF or SJ down to LA for a 9 am meeting down at Space Division - and could absolutely count on either one of them getting you there on time...until PSA got bought out by USAir, and Air Cal got bought out by AA. I remember the first day USAir took over...we hadn't LEFT by 9 am. Their whole attitude was "Hey, all we promise is to get you there sometime today."

Later, when I relocated to Charlotte NC, USAir chased everybody out of their hub in Charlotte, which had bent over backwards to get the hub located there. In return, USAir charged the highest prices in the country for flights originating out of Charlotte, based on per mile averages. Why? Because they could.

Screw USAir.


34 posted on 05/19/2005 6:21:56 PM PDT by guitfiddlist (When the 'Rats break out switchblades, it's no time to invoke Robert's Rules.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: dalereed
I used to fly PSA weekly at one time and after one flight on US Air you couldn't make me fly with them if it was for free.

I agree with you about US Air. Unfortunately, we're going to Ireland on a Globus tour with a large group in July, and the travel agent booked us on US Air without telling anyone. I'm not happy.

35 posted on 05/19/2005 6:24:54 PM PDT by Dr. Scarpetta
[ Post Reply | Private Reply | To 24 | View Replies]

To: guitfiddlist

I used to take a flight almost every thursday from Burbank to San Diego when we were rebuilding the California Building in Balboa Park for a job meeting and take the payroll and PSA even held the flight for me a couple of times when I was still getting a ticket in the terminal and they were ready to take off.

It was even cheap, I think a round trip Burbank/San Diego was just under $14.


36 posted on 05/19/2005 6:30:17 PM PDT by dalereed
[ Post Reply | Private Reply | To 34 | View Replies]

To: dalereed
..PSA even held the flight for me a couple of times when I was still getting a ticket in the terminal and they were ready to take off.

Those were indeed the days. Regarding both AirCal and PSA, I don't think I've ever experienced finer, friendlier service.

37 posted on 05/19/2005 6:36:14 PM PDT by guitfiddlist (When the 'Rats break out switchblades, it's no time to invoke Robert's Rules.)
[ Post Reply | Private Reply | To 36 | View Replies]

To: guitfiddlist
USAir charged the highest prices in the country for flights originating out of Charlotte, based on per mile averages. Why? Because they could.

Why are you on FreeRepublic? Don't believe in supply and demand? Sheesh. What a load. "Because they could" indeed. Tell me, isn't that the way you charge for your services, or do you do it for charity?
38 posted on 05/19/2005 6:36:40 PM PDT by safisoft (Give me Torah!)
[ Post Reply | Private Reply | To 34 | View Replies]

To: safisoft
Why are you on FreeRepublic? Don't believe in supply and demand?

Did I say that I wanted the government to shut them down, or regulate their prices? No. I just said they give lousy service and screwed residents in Charlotte for all the taxpayer paid largesse given to them by the city of Charlotte, who would rather drive 2 hours to Greensboro to get more sane fares, rather than using Charlotte's Douglas airport 10 minutes up the road.

Is is ok with you that I despise them, and would rather choose any other airline than use them? Do free market principles apply to us too? Thank you so much.

39 posted on 05/19/2005 6:48:17 PM PDT by guitfiddlist (When the 'Rats break out switchblades, it's no time to invoke Robert's Rules.)
[ Post Reply | Private Reply | To 38 | View Replies]

To: guitfiddlist
No. I just said they give lousy service and screwed residents in Charlotte for all the taxpayer paid largesse given to them by the city of Charlotte, who would rather drive 2 hours to Greensboro to get more sane fares, rather than using Charlotte's Douglas airport 10 minutes up the road.

You are talking out both sides of your mouth. It just so happens that US Airways runs 70% + load factors out of Charlotte, so apparently the supply and demand fee market works. You are welcome to go anywhere you want, but your whining about charging high prices BECAUSE THEY COULD sounded an awful lot like a liberal. It just so happens that a lot of people that think they are capitalists aren't. You are in that camp.
40 posted on 05/19/2005 6:54:16 PM PDT by safisoft (Give me Torah!)
[ Post Reply | Private Reply | To 39 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-69 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson