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!

The Continuing Curse of US Airways

Stocks in this article: LLC AAMRQ DAL UAL LUV JBLU

Yet the success was marred by a controversial ruling on pilot seniority, something the airline had nothing to do with. Although it resulted from binding arbitration agreed to by both parties, the 2007 ruling was so broadly unacceptable that a majority of the pilots voted to create a new union. Now the seniority issue -- like the DOJ lawsuit -- will be decided in court by a U.S. District Court judge. In the meantime, US Airways pilots fly in separate cockpits with separate cultures defined by the terms "east" and "west," reflecting affiliations on the day of a merger that took place eight years ago.

Historically, US Airways is the product of five airline mergers . Most have gone reasonably well, aside from the initial culture clash between US Air and Piedmont after their 1987 deal brought the Charlotte hub into the US Air system.

But US Airways has never solved the problem of having hubs that are too small to fully compete globally. Under CEO Stephen Wolf in the late 1990s and early 2000s and then under Parker, it has sought repeatedly to solve the fundamental problem in its configuration: When commercial airlines were starting out in the 1930s, US Airways predecessor All American Aviation chose to deliver the mail in the Pittsburgh area, while others had the luck to start out with a presence in Atlanta, Chicago, Dallas or Newark.

As CEO, Wolf talked merger with every U.S. airline. He finally settled on United. The Justice Department opposed that one too, although the deal's failure resulted primarily from United's loss of interest after it realized that it didn't want to pay the $60 per share it had agreed to.

Parker tried with Delta and United before settling on American. Interestingly, on a media call with reporters on Tuesday, Assistant Attorney General Bill Baer was asked about previous airline mergers the DOJ had opposed. In his response, Baer commented on the 2006 bid for Delta, saying "We were looking seriously at the hostile bid for Delta when that got abandoned so It's not the first time."

2 of 3

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 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

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