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TheStreet Open House

A Fact of Life: Phoenix Would Lose Jobs in USAirways/AMR Merger

Another variable involves the amount of lost service that could result from a merger creating an airline with hubs in Dallas, Los Angeles and Phoenix. The airline has said no flights would be lost, but the study considered the possibility nonetheless. Some experts suggest that for some flights, connections in Dallas, the second largest single-airline hub in the world with about 750 daily departures, would make more sense than connections in Phoenix.

In Phoenix, US Airways operates 260 daily departures to 74 destinations. Numbers were slightly higher at the time of the study, which said that if 25% of flights were cut, total Arizona employment would fall by 4,643 jobs, including the impact of the multiplier effect, while state tax revenue would fall by $10 million and local government revenue would fall by $8.3 million.

Mohr said US Airways recently signed a five-year lease on its headquarters building with a potential five-year extension. "We intend to maintain our hub and significant corporate presence in Phoenix no matter what happens," she said.

It is not unusual for headquarters jobs to be lost in mergers, nor for people to be upset when that occurs. The Minneapolis Star-Tribune reported in February that about 1,000 Minneapolis jobs were lost as the result of the 2008 merger between Atlanta-based Delta (DAL) and Minneapolis-based Northwest. But Delta said it still employs 12,500 people in Minnesota.

In 2010, United (UAL) announced plans to merge with Continental and closed the Continental headquarters, resulting in the move of 1,500 corporate jobs from Houston.

In May, the Houston City Council voted 16-1 to allow Southwest (LUV) to build an international terminal at Houston Hobby Airport, diminishing United's hub at Houston Bush Intercontinental. The lopsided margin resulted largely from the continuing bitterness over the loss of the headquarters.

In Dallas/Fort Worth, American employs about 24,000 people. That includes about 5,000 in the headquarters and 19,000 at the airport, in area crew bases and in a reservations center.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed .

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