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Fri, Oct 17, 2008

Parker Reflects On US Airways/America West Merger

Says Contentious Combination Saved 35,000 Jobs

For those of us who follow the airline industry, the continuing civil war among pilots of US Airways following its merger with America West three years ago looks like a failure, with a capital "F"... and that's without such passenger-related travesties as $2 for a Dixie cup of Coca-Cola.

The US Airline Pilots Association, which represents the pilots who came into the merger from the US Airlines side, has sharply criticized management for not getting the workforce united. But in the overall scheme of things, how big a deal is this dispute?

The Street reports US Airways CEO Doug Parker said, in a recent interview, that the merger has been a success. "Without a merger, neither the standalone US Airways nor the standalone America West could have managed through. But merged, we saved 35,000 jobs."

Parker (right) then admitted, however, that "...pilot seniority is not something we contemplated we'd still be dealing with three years later," which may go down as one of the all-time understatements, in any industry.

US Airways was bankrupt in 2005 when it merged with America West. Well-positioned hubs, strong demand and the industry's cuts in capacities have helped the combined company survive.

Despite the ugly headlines surrounding the dispute among pilots, Parker claims "our pilots are keeping this between themselves. We've had no customers see this affect them in the last three years. People read about it, but it hasn't affected our operations one bit."

Aviation consultant George Hamlin tells The Street the company could realize efficiencies if pilot lists and contracts are merged, and warns the ongoing standoff echoes Eastern Airlines in its final days.

"If you put parochial interests first, last and only, you could destroy your employer," Parker said. "But so far, you have to count this as a success, because the airline is still here."

FMI: www.usairways.com

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