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Parker sees further consolidation

jonjuan

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http://finance.yahoo.com/news/US-Airways-CEO-calls-for-more-apf-15494076.html?.v=4

US Airways CEO calls for more consolidation
US Airways chief says airline industry needs to get smaller to get profitable, improve service

Samantha Bomkamp, AP Transportation Writer
On Wednesday June 10, 2009, 4:55 pm EDT

NEW YORK (AP) -- US Airways Group Inc. Chief Executive Doug Parker said Wednesday the airline industry needs to get much smaller to stay viable, and consolidation is one of the keys to bringing the sector back to profitability.

Speaking at the carrier's annual meeting in New York, Parker applauded the merger of Delta Air Lines Inc. and Northwest Airlines -- saying the creation of the world's biggest carrier was a major step toward better streamlining the industry. But he noted that the combined company has less than one-quarter of the U.S. market, leaving a great deal of room for further consolidation.

United Airlines walked away from a deal last year to combine with US Airways, but has not ruled it out at some point.

At the meeting, Parker also reiterated the carrier's plan to rake in $400 million to $500 million this year by charging for things such as checked bags and choice seating. He said extra fees are here to stay.

Parker said that the fees, or "ancillary revenue," have allowed the airline to compensate for revenue lost last year to high fuel prices, and this year to the steep drop off in the economy.

Parker said that although some customers were turned off by the bag fees, the added charges have reduced the number of bags flowing through the system by 20 percent -- and allowed baggage handling systems to operate more efficiently. Making this arduous process smaller and more streamlined has allowed the Tempe, Ariz.-based airline to improve its on-time performance, Parker said.

Data released by the Transportation Department on Tuesday showed nearly 80 percent of US Airways nonstop flights were on time in April, making the carrier ninth of 19 airlines reporting those results.

In addition to $15 for a first checked bag and $25 for a second, US Airways currently charges for other a la carte items like choice seats in coach and pillows and blankets. It began charging for drinks like soda and juice last year, but reversed its plan in March when no other airlines followed suit.

Parker told shareholders that the company will continue to strive for margin improvement -- a great deal of which has come from extra fees -- and other operational adjustments to prepare for "another difficult year for the airline industry."

US Airways shares closed down 12 cents, or 4.4 percent, at $2.63.
 

Mongolikecandy

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What pilot group would want to be part of that abortion?
 

B-atch

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Pick the second most dysfunctional airline out there, and US Airways will merge with them.
 

General Lee

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Parker also sees a "bonus" for completing a merger. I really can't see the East and West USAir pilots ever flying together in the same cockpit, so I would think Parker would split the two up, and sell each part to someone else. CAL gets AWA, and United gets USAir East, and then that part liquidates.


Bye Bye--General Lee
 

hockeypilot44

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What pilot group would want to be part of that abortion?

The Midwest pilots? How about some of the furloughed pilots from United? An active job at US Airways is a better job than the regionals or being unemployed. It is not the pilots fault that US Airways is so poorly run.
 

Mongolikecandy

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The Midwest pilots? How about some of the furloughed pilots from United? An active job at US Airways is a better job than the regionals or being unemployed. It is not the pilots fault that US Airways is so poorly run.

I am not talking about how the company is run. I am talking about how completely dysfunctional the pilot group is with all the USAPA crap going on. Who would want to walk into that sh!tstorm? Having been recently furloughed myself and having come from a regional carrier, I would rather stay at a regional or stay furloughed than be a part of that.

Just my humble opinion and we all know what they say about opinions.
 

Colonel Savage

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"...Parker applauded the merger of Delta Air Lines Inc. and Northwest Airlines -- saying the creation of the world's biggest carrier was a major step toward better streamlining the industry. But he noted that the combined company has less than one-quarter of the U.S. market..."


Aw gee, that's just terrible. One company with just 25% of the market. And then he says that'll help improve customer service.

Does this guy have any idea how to make a coherent argument?
 

Colonel Savage

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...I would rather stay at a regional or stay furloughed than be a part of that.

Just my humble opinion and we all know what they say about opinions.

Yes, and I can see from your avatar that you give your opinions a lot of thought!
 

Question4U

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The way parker handled the first merger I am sure the second will go just as smooth. He has been barking mergers for four years and he can't even complete the first one.
 

~~~^~~~

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It's still a huge step up from a regional. Especially when you consider that about half the pilots will retire in ten years.
Don't you still have pilots at Mid Atlantic?

Lets see, from senior at a regional to junior, at another regional...

Not that I'm throwing stones, I may be in your shoes before too long.
 

vetrider

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I wonder if it ever crosses Parkers mind that it kinda looks funny to have the king of the leper colony always being the one beating the consolidation drum.
 

G4G5

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For Parker consolidation is 2 for 1 at Happy Hour
 

zasca

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The rumor is Parker successfully completed a merger with one of his secretaries. His ego must be riding high since it's look like "his boys can swim"....
 

jmreii

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The Midwest pilots? How about some of the furloughed pilots from United? An active job at US Airways is a better job than the regionals or being unemployed. It is not the pilots fault that US Airways is so poorly run.

Engineers ride their trains to the site of the wreck while ship captains go down with the ships, do your thing.
 

Lampshade

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Parker knows with yields down, over capacity and fuel coming up a merger will happen this year but who? Oh, and United has this going down:

With the demand environment weak, Fitch warned that "internal cash generation alone will not be sufficient to prevent an erosion of [UA's] unrestricted liquidity position by year end. . .United does face steady and heavy debt maturities." As of April 21, UA had scheduled maturities of debt and capital leases totaling $655 million for 2009's final three quarters. "Even if revenue trends stabilize late in the year, the airline faces over $1 billion in scheduled debt and capital lease principal payments for 2010 raising the probability of a deepening liquidity crisis," Fitch said, adding that UA also has scheduled debt maturities of $869 million in 2011.
 

Colonel Savage

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If you look at his testimony on capital hill during the attempted takeover of Delta, that comment is self explanatory!

In reality it was a rhetorical question, but I take your point.
 
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