Does US Airways Have AMR in Checkmate?
Two revealing events occurred last week. On Wednesday, I flew to an AMR media event in Dallas to hear what the airline had to say as it battles a takeover. The primary message was that in 2014, two years from now, AMR will start to alter seating configurations on its widebody aircraft and add more lie-flat seats.
Two days later, AMR said it would explore the possibility of a merger while still in bankruptcy, reversing its previous position at the behest of its creditors.
Lie-flat seats are great. In fact, United (UAL) said Thursday that it has lie-flat seats on almost 80% of its international fleet. I just don't think the distant promise of lie-flat seats can slow the momentum of the thundering herd from Tempe.I began to cover American in its Miami hub in 1990, right after legendary CEO Bob Crandall made one of the best deals in aviation history, buying Eastern's Latin American routes from Miami for about $320 million. I began to cover US Airways in its Charlotte hub in 1996, soon after legendary CEO Steve Wolf arrived to fix the airline and merge with somebody -- anybody. He succeeded on the first count and nearly succeeded on the second. Theoretically, knowing where the airlines have been, should help me to figure out where they are going. Reviewing AMR's history since 1990, it was for a time the greatest airline in the world. Crandall ordered planes, pioneered frequent flyer programs, reservations systems and yield management, and expanded in South America and Europe. He retired in 1998. AMR completed mergers with Reno Air in 1999 and TWA in 2001. Both failed. When bankruptcy threatened in 2003, AMR veered away, seeking the moral high ground favored by president Gerard Arpey. Then AMR disclosed it had executive retention packages and bankruptcy-proof pensions. This enraged employees and forced the resignation of CEO Don Carty. Arpey became CEO.
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