This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Delta CEO Offered Merger Tip to US Airways CEO

Stocks in this article: AAMRQ.PK DAL LCC UAL

CHARLOTTE, N.C. ( TheStreet) - Who is giving US Airways (LCC) CEO Doug Parker his best advice when it comes to merger implementation?

Asked Monday at an investor conference what he needs to be careful about as he oversees the merger of US Airways with American (AAMRQ.PK), Parker cited advice from Delta (DAL) CEO Richard Anderson.

Anderson's words, Parker said, were "Adopt and Go," which summarizes the importance of "taking the larger airline's systems and processes and overlaying those on the smaller airline." Parker recalled a mistake following the 2005 US Airways/America West merger, when "we had largely the America West management team, and we had some systems better than US Airways and we put those in place." Most notably, the merged carrier chose America West's Shares reservations system over US Airways' Sabre system.

Despite intensive employee training, Parker said, it is difficult to overcome the impact of practices that have been "part of the infrastructure for over 20 years." As a result, putting Shares into place meant that "processing time slowed down dramatically." This time, he said, "we will do our best to avoid that. Unless there is a compelling reason to go with the smaller system, we will go with 'adopt and go'."

Both Delta President Ed Bastian and United (UAL)CEO Jeff Smisek, speaking at the same investor conference where Parker spoke, expressed support for the merger. "We believe that mergers in this industry generally are a good thing if done well," Bastian said. "For us, it's going to be a positive. It's just another form of continuing to maintain discipline in a business that will continue to be as competitive as ever."

Smisek, meanwhile, said "there've been too many business plans chasing too few customers and that's been unhealthy for everybody (so) industry consolidation has been good.

"We don't worry about losing the title of 'world's largest airline' because we never really cared about that title," he said. "We want to be the world's leading airline."

Parker acknowledged that the new American will not have as many routes to Asia as either Delta or United. He noted that both benefitted from treaty agreements, following World War II, giving predecessor airlines rights to establish hubs in Tokyo. It is wrong "to suggest that we grow a standalone Asia network to be like United and Delta have," Parker said. "You can't go back and reverse history."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs