US Airways CEO Parker Pulls It All Together
CHARLOTTE, N.C. -- For the fourth time in four years, Doug Parker is actively chasing his dream of a game-changing airline merger.
Four years ago, Parker was running America West Airlines, a Tempe, Ariz.-based regional carrier with $2.4 billion in annual revenue. Today, he heads the $12 billion US Airways. A successful merger could make him a top executive at a $30 billion airline, second in size only to Delta (DAL) and Northwest (NWA), assuming their own combination is completed.
United's board is scheduled to meet today to review options that also include entering into an alliance with Continental (CAL), although a source with knowledge of the situation said no decision is imminent.Parker's chase began in 2004, when America West bid for troubled ATA Airlines. "That was the first indication that Parker was going for market size, trying to break into the Chicago market," says aviation consultant Robert Mann. The effort failed because ATA's aircraft lessors determined they could get more value for their planes from foreign operators than from America West. The next year, he hit pay dirt, getting a deal between America West and US Airways, which had a strong East Coast presence and a lower cost structure after two bankruptcies. Investors wanted Parker to run the company, while US Airways CEO Bruce Lakefield wanted to save jobs. Everybody got what they wanted. In 2006, its first full year of operation, the merged carrier made $303 million and was the most profitable legacy airline. Flush with success, Parker launched a hostile bid for Delta, then the third-largest carrier. Delta fought him off and the effort was dropped. So Parker laid low, encouraging consolidation while acknowledging that US Airways was nobody's first choice as a partner. But when Continental spurned United last month, the push was on.
Shades of LorenzoParker's ascent brings to mind another airline executive whose star rose through a series of mergers. Like Parker, Frank Lorenzo started with a small airline, Texas Air -- it eventually became Texas Air Group and was briefly the world's biggest airline company. In most other ways, however, Lorenzo, who chose to fight his employees rather than his competitors, was Parker's opposite. In fact, in terms of employee relations, Parker communicates through charm offensives, often traveling to employee gatherings. The approach worked at Phoenix-centric America West, and initially at US Airways, where Parker was first viewed as a hero. But it also feeds into the bigger question: are Parker and his management team, mostly holdovers from America West, capable of running one of the world's biggest airlines? "As the targets get bigger and bigger, that's got to be the issue," Mann says. Mike Flores, president of the US Airways chapter of the Association of Flight Attendants, says that today at US Airways, "It is mostly
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