US Airways: 'We'll Hit the Ground Running' After Merger
CHARLOTTE, N.C. (TheStreet) -- US Airways (LCC) President Scott Kirby said the carrier can "hit the ground running" after its merger with American (AAMRQ.PK) and reminded investors that is what happened following the 2005 merger of US Airways and America West.
Financially, "we came out screaming from day one" following the America West merger, Kirby recalled during an airline investor conference on Wednesday.
Asked whether the merger with American, which is expected to be in place in the third quarter, will face implementation problems, Kirby responded: "We know we won't be flawless but we think we'll do pretty well and we'll minimize the bumps in the road."
Kirby listed three reasons for optimism. First, the US Airways/America West merger provided valuable lessons, including "personal experience with things that went wrong -- It's a lot easy to learn from something going wrong than from things going perfectly," he said. Secondly, "We've had an example of an airline that's done pretty well, Delta (DAL) , and we've tried to shamelessly copy some of the things that they've done."Thirdly, Kirby said, "We've got a process that's going extremely well," with teams from the two airlines working closely together. "We're going to get the code share up within weeks compared to what's taken much longer at some other mergers. I think we're going to hit the ground running and get the operational integration done effectively and with very minimal customer disruption." The US Airways/America West merger closed on Sept. 27, 2005. In the fourth quarter of 2005, the combined carriers, reporting jointly for the first time, said that fourth quarter losses increased sharply due to surging fuel prices. But in the first quarter of 2006, the carrier's improvement was stunning and shares rose more than 9% when results were announced on May 9, 2006. Excluding items, the carrier reported earnings of $5 million, or 5 cents a share. Analysts had expected a loss of 16 cents a share. "Those guys deserve the accolades," Calyon Securities analyst Ray Neidl told The Associated Pressat the time. "Making a profit in the first quarter with $75 per barrel oil is quite a feat." In late morning trading on Wednesday, US Airways shares were up 75 cents to $18.85. Delta shares were up 93 cents to $19.18 after President Ed Bastian told the investor conference that the current quarter "is shaping up to be a very strong quarter, possibly another record result." Delta reported a first-quarter profit for the first time since 2000. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
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