Reasons to like the merger of American, US Airways

Posted Thursday, Feb. 14, 2013  comments  Print Reprints



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At long last, the route ahead for American Airlines has cleared. Welcome to Fort Worth, US Airways.

With Thursday's formal announcement that the two carriers intend to merge their complementary networks, forming what's expected to be the world's largest airline, the future seems brighter for both. American Chairman, President and CEO Tom Horton and US Airways Chairman and CEO Doug Parker said the transaction is expected to close later this year.

The two leaders said the new airline, which will retain the American name, will have its headquarters in "Dallas-Fort Worth."

Just to keep things straight, American has been headquartered in Fort Worth (no Dallas, no hyphen) since moving here from New York in 1979. The city has supported American through thick and thin and would be proud to be the home of those US Airways executives and their families who will be moving to the region from their company's headquarters in Tempe, Ariz.

The brighter outlook for American and US Airways stems primarily from the competitive advantages their combination will create. Separately, neither can offer the range of destinations and flight frequency of industry leaders United and Delta.

Together, American and US Airways mesh well, with their networks overlapping in only about a dozen markets. The two said the combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries.

American has already launched a plan to transform its fleet during the next four years. The post-merger airline is scheduled to take delivery of more than 600 new, significantly more fuel-efficient aircraft, most with in-seat, in-flight entertainment systems and Wi-Fi Internet connectivity.

For months, Horton has described the planned purchases as creating a fleet that will be the youngest in the industry.

As important as all of this is to the economic vitality of North Texas and to the lives of the thousands of American employees who live here, perhaps even brighter is the hope of a better working relationship between those employees and their bosses.

That relationship has been bilaterally aggressive for decades, but since 2003 it has been at times openly combative. Labor actions, some brought on by management missteps and some not, some union-coordinated and some wildcat, have spilled over to the detriment and discomfort of paying customers.

After American's parent AMR Corp. declared bankruptcy in late 2011, some labor leaders said their members simply did not want to go on under American's management team. They strongly backed a merger with US Airways long before their top bosses agreed to consider it. They even agreed to post-merger work rules while they were still in contentious contract talks with American.

Now all of those labor groups not only have contracts with American, but they've signed a memorandum of understanding on how to resolve seniority issues after a merger with US Airways.

Horton will stay on as chairman of the new American, but only until the combination is complete. Then he'll be out and Parker will take over.

There is no formula for permanent labor peace at this or any other airline. Combining union membership lists and resolving representation and contract conflicts is problematic at best in all airline mergers. Still, key American union leaders are said to be "working with their US Airways counterparts" on these issues.

There's every reason to be happy about this merger and to be confident it will be approved promptly by American's bankruptcy court and federal regulators. That's good, because competitors won't be sitting still waiting for the new, much larger American to emerge.

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