This Day On The Street
Continue to site
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

Why US Airways Wants a Deal with American

CHARLOTTE, N.C. TheStreet) -- AMR's (AMR) bankruptcy filing is no doubt viewed as an opportunity by US Airways (LCC), which has long seen a merger with a major carrier as the best way to assure its long-term survival.

US Airways CEO Doug Parker has said frequently that bankruptcy court is the best place to accomplish a merger, because a filing enables reductions in labor costs and reduction or elimination of lease costs for aircraft, airport space and office space.

In the past seven years, Parker has bid for four airlines, three of which were in bankruptcy. In 2004, as CEO of America West, he bid for bankrupt ATA . In 2005, he oversaw a merger with bankrupt US Airways.

In 2006, he bid for bankrupt Delta> (DAL - Get Report). In 2008, he sought a merger with United (UAL - Get Report), following a course set by predecessor Steven Wolf, who pursued United in 2000.

Now, in every corner of the airline industry, speculation abounds that Parker will make a move on American in bankruptcy court.

Here is an example of the intensity of the continuing speculation. In mid-October, Mike Cleary, president of the US Airline Pilots Association, which represents US Airways pilots, visited Dallas to meet with Eric Ferguson, a leader of the America Westpilots. Cleary sought to extend an olive branch in hopes of resolving a long-simmering seniority dispute between the two pilot groups at otherwise merged US Airways.

"News of Cleary being spotted at DFW almost immediately made its way onto the Web boards, which seemed to stoke the AA merger rumors for a few days thereafter," wrote Ferguson, in a message to the America West pilots. Despite a pleasant conversation, Ferguson noted, no resolution materialized. But that does not mean the dispute will impede a merger.

In fact, at US Airways, where the airline's history reflects a continuing series of mergers , most employees fully expect management to aggressively pursue American.

"The American bankruptcy, while unfortunate for American employees and for the company, presents an opportunity for US Airways," said Mike Flores, president of the US Airways chapter of the Association of Flight Attendants.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
DAL $43.29 -1.10%
UAL $53.77 -0.67%
AAPL $132.88 1.10%
FB $81.03 0.68%

Markets

DOW 18,272.49 -13.25 -0.07%
S&P 500 2,130.19 -0.63 -0.03%
NASDAQ 5,097.9520 +7.1580 0.14%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs