In American Airlines Merger, One CEO Had to Go
By Scott Mayerowitz
NEW YORK -- The 14-month battle for control of American Airlines came down to two men who got their start there. When the airline filed for bankruptcy in November 2011, Tom Horton was simultaneously elevated to CEO. But from the minute he reached the top, a number of forces started converging against him. The airline's unions didn't trust him. Those owed money by American questioned his plans.
The strongest opposition, however, soon came from his old friend Doug Parker. The two had worked side-by-side as financial analysts at American's Fort Worth, Texas, headquarters in the 1980s, until Parker moved on to other airlines, eventually becoming CEO of rival US Airways.
Parker had spent the last five years looking to merge with another airline. With American in bankruptcy, he sprang into action.By the end of the year, the 51-year-old Parker will be at the helm of a combined American and US Airways -- the world's largest airline. Horton, also 51, will serve as chairman for about a year and then depart the company he worked at for nearly a quarter century. For his efforts, he will receive $19.9 million in cash and stock as well as a lifetime of free first-class tickets on American for himself and his wife. Parker and Horton have spent most of their lives in the airline business. But that's about where the similarities end. Horton is a buttoned-up guy who loves long runs and starts each morning with a bowl of oatmeal and freshly cut Texas peaches. Parker, on the other hand, is easily the life of a party. He commands a room and fills his conversations with energy. There was never going to be room for both at the top of American. This is the story of how two old friends and former protégés of legendary American Airlines CEO Robert Crandall found themselves on opposite ends of what may be the last great airline merger in the U.S. Horton and Parker declined to comment, but interviews with executives, union officials, lawyers and others connected to the deal -- agreed to late Wednesday -- outline how it was filled with tactical negotiations, clandestine meetings and gut-wrenching decisions. The prize: A chance to bring American back to its glory days.
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