The Continuing Curse of US Airways
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."
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