This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Assessing US Airways' Doug Parker's Legacy

Stocks in this article: AAMRQ.PKDALLCCLUVUAL

CHARLOTTE, N.C. ( TheStreet) -- Will US Airways (LCC) CEO Doug Parker be remembered as a giant of commercial aviation?

Of course, it's too soon to tell. Over the next few years, as he oversees the merger of US Airways and American (AAMRQ.PK), which would create the world's biggest airline, Parker and his every move will be closely watched and continually assessed. Obviously, Parker is poised to establish himself as an aviation leader for the ages, but the events of the next few years will shape his legacy.

In an interview, Parker said that legacy should be largely about whether he can preserve jobs for the employees of US Airways and American. "What I care about is, by the time I'm done, I'd like the people at American and US Airways to know the company will be there for them," he said. "I'm highly confident we'll get there."

In some cases, "management didn't make sure the airline could stay in business," Parker said. "That's our job, to be sure we're doing everything we can" to ensure that airlines survive."

From a historical perspective, Parker has already established himself as the key catalyst for change in the final round of post-deregulation airline industry consolidation. After he pursued a merger with Delta (DAL), Delta merged with Northwest. After he pursued a merger with United (UAL), that carrier merged with a hesitant Continental. Then Parker pursued a merger with American, one that now awaits only regulatory approval.

Imperial Capital analyst Bob McAdoo said Parker's ability to reverse the fortunes of American, which has underperformed its peers for close to a decade, will be the key factor in establishing his legacy. But perhaps improving American's performance will, in the end, equate to preserving jobs for its employees.

At the moment, five leaders stand out as the giants of the post-war airline industry, essentially one at each major airline. Robert Crandall built American, Stephen Wolf built United and Frank Lorenzo built Continental, which later merged with United. Herb Kelleher created and built Southwest (LUV), and Jerry Grinstein transformed Delta. Commercial aviation is so young, relative to many other industries, that all of its most important leaders are still alive.

Asked whether it is reasonable to compare him to the industry's five giants. Parker responded: "I don't care about comparisons. I really don't. What we're doing, what I learned about a long time ago, is that it's (most important) to think of all these employees who do their jobs so well, but are so beholden to their leadership."

Still, Parker said he has found a role model in Kelleher, who "really cares about the people who work for him.

"Herb understands people so well -- that's in the airline," Parker said, noting that if Kelleher were talking with an employee and "if the president of the United States walked into the room, Herb wouldn't divert his attention," but rather would remain engaged in the conversation. Kelleher "is in a class by himself," Parker said. "I could never get there."

Like Kelleher, Parker focuses intently on employees. During a presentation at US Airways media day in April, he described an October 2001 trip home to Phoenix from Washington D.C. just after he failed to secure an Air Transportation Stabilization Board grant that would have ensured the continued operation of America West, which later merged with US Airways. "It was a bad day," said Parker, who thought to himself: "I'm 39. I've been CEO for a month. Now I'm going to liquidate. It is not going to look good on the resume."

A depressed Parker went to the rear galley and spoke with a flight attendant, a single mom, who asked how it had gone. "I couldn't lie to her," he said. "I told her: 'They don't want to do it. We're trying to get it done. Hopefully we'll be able to get through bankruptcy.' She just looked at me. She said: 'You can't do this. I've been doing this job for 15 years. This is what I do. I have my child care set up around it. I can't do anything else.'"

"I realized this isn't about me," Parker said. "Management's job is to serve the people who do what she is doing." A later run at the ATSB succeeded in securing a $380 million loan guarantee, making American West the first carrier to receive an ATSB loan guarantee.

Airline experts see additional legacy considerations. Consultant Bob Mann called Parker "absolutely the foremost advocate for consolidation" and said he needs continued support from labor, especially given that the American unions provided early, essential backing for a merger that was initially opposed by American management. "Labor threw the other guys over the side of the boat in order to sign up with this guy, and labor will be the key to his legacy," Mann said.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs