As US Airways Plans a Sixth Merger, Ed Colodny Recalls the First Four
CHARLOTTE, N.C. (TheStreet) -- Ed Colodny knows mergers, particularly mergers involving US Airways (LCC). As head of USAir from 1975 to 1991, he presided over four of them and considered a half dozen more.
"Putting together any merger is difficult," said Colodny, who is 86 years old and sharp as a tack, in an interview. "When you have large organizations like this, it's (hard) to try and figure out where the future is going to be."
|US Airways today flies an Allegheny-themed A319.|
"Mergers work best when one (carrier) is weak and one is strong and the weak one appreciates being bought up so they can all survive," he added. "Merging two strong airlines is inherently a culture clash, particularly at the top."
Nevertheless, Colodny said the impending merger between US Airways and American (AAMRQ.PK) will "probably be a great combination if it does occur -- just don't expect (a successful integration) to happen in six weeks or six months.""American has a very proud heritage going back to its earliest days, and US Airways is equally proud if not more so," he said. "It had to come up the hard way because it did not start out as one of the chosen trunk airlines; it was a small regional carrier." Colodny joined US Airways-predecessor Allegheny, previously called All American Airways, as its first staff attorney in 1957. The carrier had begun flying passengers in 1949. It was based at National Airport and had routes from Washington north to Buffalo and west to Pittsburgh. Colodny was deeply involved in four mergers starting in 1967, when Allegheny merged with Indianapolis-based Lake Central Airlines. At the time, the Civil Aeronautics Board encouraged mergers to reduce subsidies. "Lake Central was the easiest, a friendly deal with few problems," he said. In 1971, Allegheny merged with Utica, N.Y. -based Mohawk Airlines. "Mohawk was in trouble and the banks forced it into a merger," he said. "It worked out fairly easily." In 1987, USAir bought PSA. "That worked out easily too," Colodny said. "They wanted to do it. But from a cultural standpoint, there were differences, and when we took the smile off the PSA planes, there were screams up and down the West Coast."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV