CEO says US Airways is last big merger candidate

AP News
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Posted: Apr 06, 2011 5:32 PM
CEO says US Airways is last big merger candidate

The CEO of US Airways Group Inc. said there's really only one big airline merger that could still happen, and it would involve his airline.

Doug Parker runs the fifth-biggest U.S. airline. At a company media event on Wednesday, he said that if one of the big three airlines _ United, Delta, or American _ wants to make a deal, US Airways is the last major one left. He said one of those airlines could also buy Alaska Airlines or JetBlue Airways Corp., but those would be much smaller transactions.

Parker said US Airways could also continue as a stand-alone airline.

US Airways missed out on the recent wave of airline mergers. Delta Air Lines Inc. bought Northwest in 2008, United and Continental merged into United Continental Holdings Inc. last year, and Southwest Airlines Co.'s plans to purchase AirTran this year.

US Airways itself is the product of a 2005 merger with America West. Although headquarters and ground workers have been integrated, former America West and US Airways pilots and flight attendants still fly on separate fleets of planes, under different schedules, and are governed by separate labor contracts. U.S. Airways flight attendants demonstrated on Wednesday just outside company headquarters over the lack of a new contract.

The airline also said it will add first-class seats to 110 of its US Airways Express flights. The change, to begin this fall and to be finished by Jan. 2012, will mean that 61 percent of its flights have first-class seats, up from 40 percent now. The planes that won't get first-class seats are its smallest regional jets, the company said. The planes to be upgraded include some owned by U.S. Airways, though most are owned by regional carriers who fly for it under contract.

The upgrades will cost about $35 million, the company said.

US Airways also said it will return nearly all call-center work for reservations to the U.S. It currently has the equivalent of 1,916 call center workers, including 635 overseas and 1,281 in the U.S. By October it expects to have the equivalent of 1,720 workers, with all but 100 in the U.S.

US Airways shares fell 5 cents to close at $8.40.