National Post (National Edition)
US Airways taking reins after merger
The new will be run largely by the current management of US Airways Group Inc. when the carriers merge to form the world’s largest airline.
American parent AMR Corp and US Airways on Monday named eight executives to top posts at the merged company on Monday, five of whom are already on the management team of Doug Parker, the US Airways chief executive who will run the new company as CEO.
Mr. Parker “is confident that his team can manage the combined enterprise,” said George Hamlin, an aviation consultant in Fairfax, Va. “Time is going to tell.”
Scott Kirby and Derek Kerr, the current president and chief financial officer of US Airways, respectively, are to hold those same jobs in the new company, which will be named American Airlines Group and based in DallasFort Worth, Texas, the current AMR headquarters.
Also from US Airways, Elise Eberwein will head communications of the new American, Robert Isom will be in charge of airline operations and Stephen Johnson will run corporate affairs. Three executives from American Airlines will have top management roles at the merged company.
The companies, looking to complete their US$11-billion merger by the end of September, also said the new carrier would have 12 directors, in- cluding James Albaugh, a former CEO of the commercial airplanes division at plane maker Boeing Co. At least five board members have financial and investment backgrounds.
The companies previously said current American Air CEO Tom Horton will be chairman of the new company through its first annual meeting. Then Mr. Parker will take over.
Among the executives who will be leaving are Dan Garton, president of American Eagle Outfitters; Bella Goren, finance chief at American Airlines; and Virasb Vahidi, American chief commercial officer, the companies announced.
The tie-up would be the fourth major merger in the U.S. airline industry since 2008, when Delta Air Lines bought Northwest. AMR creditors would receive 72% of the equity in the new American, with US Airways’ current shareholders getting 28% .
The new, larger American Airlines would return to the leadership position among U.S. carriers that it ceded in recent years as high labour costs made it difficult to compete with restructured rivals. AMR filed for bankruptcy in 2011 and initially opposed a merger, but agreed to explore one under pressure from creditors and unions.
In an annual study of airline quality released in April, US Airways ranked ninth out of 14 U.S. carriers examined, while American ranked 10th. Those rankings, released by researchers at Purdue and Wichita State University, were based on U.S. Department of Transportation figures for on-time arrivals, mishandled baggage, customer complaints and other categories .
Mr. Hamlin, the aviation consultant, said naming the management team early in the merger process was essential to get integration off to a good start. The new American will have to meld reservations, IT infrastructure and other intricate systems, tasks that have complicated other airline mergers.
Shares of US Airways were up 1.4% to US$17.26 on Monday. Thomas Horton, left, of American Airlines and Doug Parker of US Airways announced the airlines’ merger in February.
Parker will become CEO of the new company.