TEMPE, Ariz. -- This is the man who wants to run American Airlines.
Doug Parker, 50, got his start in the airline business in Fort Worth as a financial analyst at American, where he met his wife, Gwen. The father of three tries to make time to take his kids to concerts and sports activities.He is the longest-running top executive in the airline industry, known for trying to buy other airlines out of bankruptcy. He merged America West with US Airways, made unsuccessful runs at Delta and United, and got arrested for drunken driving after one failed bid.He befriended Herb Kelleher, the legendary founder of Southwest Airlines, and picks his brain occasionally. In the Southwest tradition, he doesn't mind dressing up as John Travolta from Saturday Night Fever for the company's Halloween party.Now Parker has set his sights on Fort Worth-based American, which filed for bankruptcy protection last November and is trying to restructure on its own. Parker is convinced that combining American with US Airways will create the nation's pre-eminent airline."We can get this done now and build an airline that can be the greatest in the world again, just like everyone at American wants it to be and we can make that happen," Parker said.Wall Street is predicting that a bid from Parker could come this summer."A combined company may have a better chance of achieving revenue goals," Maxim Group analyst Ray Niedl wrote in a note to investors Friday. He has given a US Airways/American merger a 90 percent chance of happening. "A merger is the most logical choice in our opinion."Getting intothe businessGrowing up in Michigan, Parker was not an aviation geek.Initially, he majored in computer science at Albion College, a small liberal arts school, before realizing that he didn't like it and switched to economics. In 1986, he received a master's in business administration, focusing on finance, from Vanderbilt University. American, which was establishing a hub in Nashville at the time, was recruiting at Vanderbilt, and Parker was intrigued by the carrier and its finance department. He was hired as a financial analyst and moved to North Texas.Parker met Gwen, who was a flight attendant at American, through their mutual friend, David Cush, now the chief executive of Virgin America. Gwen said they used to hang out together after work, and the two were married in Dallas in 1990.A year later, Parker left American for an executive position at Northwest Airlines. In 1995, he joined America West as chief financial officer."I was drawn to the challenge of taking what I'd learned and using it to build something new," Parker said in his commencement address to Albion's graduating class of 2010. "I never set out to be a CEO or anything close to it."But at 39, Parker was named chief executive of America West, where he started on Sept. 1, 2001, 10 days before the terrorist attacks. Immediately, Parker was dealing with massive revenue losses as planes flew around empty. He spent the first few months lobbying Congress for the airline bailout and loan guarantees to keep America West afloat."That is the most trying start you can have as a new CEO and I thought he handled that well," said Kelleher, who met Parker in the wake of the crisis.An independent executiveIn 2005, he merged America West with bankrupt US Airways and two years later, he attempted to purchase Delta Air Lines. While he was sure that investors would see the value of a combined US Airways-Delta, management and employees fought off the bid with a campaign of "Keep Delta My Delta."The day Parker found out that Delta's creditors had rejected his bid, he was arrested for driving under the influence. He apologized to employees for his actions, pleaded guilty to the DUI and served his sentence of one night in a Phoenix jail."That was a huge lesson for our family and it was embarrassing," Gwen Parker said, adding that her husband was disappointed by the failed Delta deal but did not dwell on it. "He's the guy that will put that behind him and move forward and do what needs to be done to keep his business successful."While Parker also tried unsuccessfully to merge with United in 2010, colleagues say he's not the type of executive who wants to grow for growth's sake. Instead, he believes that the airline industry would be better off with fewer domestic carriers.With his finance background and years as the investors relations guy at Northwest Airlines, he has gained credibility on Wall Street."He really wants to go for the long haul, to run an airline," said Bob Herbst, founder of AirlineFinancials.com. "I don't think he's interested in running AT&T, if a better offer comes along, and I think his priority is to make US Airways a better, stronger airline."Parker has also been willing to buck industry trends. While his competitors have been bolstering their fuel hedging portfolios, US Airways has not entered into fuel hedging contracts. As a result, the carrier is paying less for fuel than other airlines and that has led to profits when the price of oil has dropped."He was willing to forward his position even when he was the only one in the room that felt that way," Kelleher said. "He is a venturesome visionary and he flavors that with pragmatism."The importanceof familyWhile business is often foremost on Parker's mind, his wife said he is good at leaving work at the office to spend time with their three kids -- Jackson, 17, Luke 14, and Eliza, 12 -- at sports, rock concerts or church youth events."He does a really good job of making family things important and being sure that he is there for those important things," Gwen said.Parker spends several days each month talking to employees, with regularly scheduled forums at the carrier's Phoenix and Charlotte, N.C., flight training centers. He said it's the best way for him to learn what is going on at the airline."This is what works for me," Parker said. "I'm really bad at this 'information is power' and trying to figure out when to disclose what. I'm just terrible at that. What I find works well is, 'Let's lay all the cards on the table and talk about it.'"Despite that approach, pilot groups from the former America West and US Airways unions have not been able to agree to a new contract, and the unions say Parker has been fine with the delays.Pilots union spokesman James Ray said that Parker has not misled pilots and that the union always knows where he stands. However, the union sees his monthly employee meetings more as a carefully constructed corporate message to lower expectations than as a way to engage workers."He pays the pilots the least amount of all the airlines," Ray said. "He's wanted to maintain this cost advantage and by stalling and delaying. He's been able to do so."Why he wants AmericanRumors about US Airways' interest in buying American started the day that American filed for bankruptcy. At the company's media day earlier this year, Parker came out with Adele's Rumor Has It playing in the background.Although Parker has not yet made a formal bid for American, he has reached conditional labor agreements with American's three largest labor unions and told US Airways shareholders that there is "tremendous financial support" for a merger."I think his ambitions are way, way bigger than just being an important member of the Star Alliance," said airline analyst Darryl Jenkins, referring to US Airways' membership in United's global alliance.While Jenkins believes that a merger between US Airways and American makes sense, he thinks Parker, whom he characterizes as one of the "most testosterone-drive executives in the airline industry," is taking a risk by going after American in bankruptcy.American's chief executive, Tom Horton, has said his company is focused on its own restructuring plan, which includes $1.2 billion in employee-related cost cuts, and emerging as a stand-alone carrier.Jenkins agrees that American should focus on remaining independent in bankruptcy and that Parker may end up paying too much if US Airways forces a merger now."Parker could be bidding up the price of the debt, bidding up the price of the pilots," Jenkins said. "He has made a lot of promises."Parker has promised American's unions that he will cut fewer jobs and seek fewer concessions than American's management. He said one of his motivations for the merger is to give airline employees a sense of security, something he says they haven't had since 9-11."I do feel a need to get to where our people can know that they can work for an airline that will be here forever," Parker said.Andrea Ahles, 817-390-7631Twitter: @Sky_TalkHave more to add? News tip? Tell us
