US Airways’ Parker: A Smart Bid for American

Getting American's unions onboard first was a savvy move

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US Airways (NYSE:LCC) Chairman and CEO W. Douglas Parker knows firsthand how it feels to be a wallflower at a wedding reception — and he doesn’t like it. That’s why the tenacious Parker is upping his game to secure what likely is the last major U.S. airline merger: acquiring rival American Airlines (PINK:AAMRQ) out of bankruptcy.

Parker announced last Friday that LCC has reached agreements with American’s three largest unions — pilots, flight attendants and ground workers — on collective-bargaining agreements for a possible combined airline. Employee support is critical if LCC is to have a realistic shot at pulling off a deal that would create the world’s largest airline.

But that will be much harder than it might seem because American’s CEO, Tom Horton, is fighting to keep the storied legacy airline independent. On Monday, American began a courtroom battle to cancel all of its union contracts. More than 300 airline employees protested outside the federal bankruptcy court on Monday.

Last month, I pointed out that Horton’s move to void the union contracts could result in an employee backlash that inadvertently opens the door to US Airways. That’s exactly what seems to be happening now.

Parker has been here before. Since the merger of US Airways and America West in 2005, he has courted two attractive merger partners: Delta Air Lines (NYSE:DAL) and United (NYSE:UAL), both of which left him at the altar.

Parker started his airline career at American. With a degree in economics from Albion College and an MBA from Vanderbilt, Parker worked in finance and management positions at American before heading to Northwest Airlines.

Over his four-year tenure there, he rose to become Northwest’s vice president and assistant treasurer. He moved to America West in 1995 as chief financial officer. As a reward for helping to put the struggling carrier back on track, Parker was elevated to the top job in September 2001 — 10 days before 9/11.

Parker stepped up to the task of leading America West into a challenging future. His lobbying efforts helped his airline secure funds it desperately needed: a $60 million federal grant and a $380 million loan guarantee.

Once America West’s immediate financial crises were past, Parker began work on growing the business. He knew the value of consolidation in a capital-intensive industry and set his sights on US Airways, which was in bankruptcy for the second time. When the merger was approved, Parker headed up the merged carrier, which adopted the US Airways name.


Article printed from InvestorPlace Media, http://investorplace.com/2012/04/us-airways-parker-a-smart-bid-for-american/.

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