US Air CEO says merger is American's best option
US Airways Group Inc. CEO Doug Parker told shareholders Thursday that their airline can jump to the top of the industry with a merger with American Airlines.
A combined US Airways-American could "compete with anybody," Parker said at the company's annual meeting. American has lost market share to Delta and United over the past five years, a trend that Parker asserts won't be fixed through bankruptcy reorganization. The merged airline would be the market leader across two-thirds of the country, he said.
American's parent, AMR Corp. filed for bankruptcy protection on Nov. 29. It's CEO, Tom Horton, has repeatedly said he wants his airline to emerge from bankruptcy before considering a merger, although AMR and its creditors committee have agreed to explore potential consolidation.
Parker hasn't been that patient. He stuck a deal with American's three main unions to support a merger. Leaders from all those labor groups were present at Thursday's meeting. The groups represent nearly 55,000 of American's 73,000 employees.
"We appreciate their support and presence here today," Parker said. After the meeting, they posed for a group photo.
The CEO contends that Wall Street is also in US Airways' corner. The proof: A 140 percent increase in the company's shares since Jan. 1. The shares rose 1.7 percent Thursday to $12.17 in afternoon trading.
Parker said merger talks would begin after the bankruptcy judge rules about the state of the union's contracts. A decision is expected June 22, although it has been pushed back once already.
"There is a process in place. It's got its own rhythm. We respect that," Parker told The Associated Press.
American is currently the country's third largest carrier; US Airways is number five.
