Pressure Mounts on DOJ to Accept US Airways/American Merger
On two earnings calls this week, two airline CEOs seemed to display some level of support for the merger. Of course, support from US Airways CEO Doug Parker is no surprise. But Parker pointed out on Wednesday that recent financial success by US Airways and American ought not be seen as an obstacle. He summarized an argument that may be made at the U.S. District Court hearing, scheduled to begin Nov. 25, if the case is not dropped or settled before then.
"One of our accomplishments of late is that the company's credit rating was raised one notch from B minus to single B," Parker said. "While we're happy to see a credit rating increase, a single B company still needs five upgrades to get to investment-grade.
"So, as well as we're doing, we still have a company that is nowhere near investment-grade, nowhere near where other companies that merge and their businesses are," Parker said. "I just want to make sure everybody understands that what we're really talking about here is merging a single B credit with a bankrupt credit."
Meanwhile, Delta (DAL) CEO Richard Anderson spoke Tuesday of China's airline policy. Anderson has been a frequent critic of the United States government's lack of an airline policy.In response to an analyst's question about the potential for an Open Skies agreement with China, Anderson said that "the Chinese carriers are continuing to develop and the Chinese government, to their credit, views, unlike the United States, the Chinese government views aviation as a strategic asset for its country. "They're making the kinds of investments in growing and developing three strong flag carriers," Anderson said. "And if you were in their situation, you would take similar steps."
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