Eagle757shark
Well-known member
- Joined
- Jul 31, 2006
- Posts
- 575
US Airways is still committed to seeking merger partner
David Woodfill, Tribune
US Airways chairman and CEO Doug Parker said the failed merger attempt between US Airways and Delta Air Lines has not dampened the company’s resolve to eventually consider another merger.
Parker’s comments came on Thursday after the 16th annual International Aviation Symposium at the Arizona Biltmore Resort & Spa in Phoenix.
Parker and other industry leaders discussed issues facing airlines, including executive compensation and the hypercyclical nature of the industry.
Parker told the audience of industry players the problem of overcapacity — too many seats and not enough passengers — could have been alleviated had the merger been successful. Parker said the two companies together would have stripped the industry of about four percent of overcapacity.
He said resistance from the executives of a targeted airline is one of the biggest hurdles during a consolidation attempt, even when it’s the last resort to turning around a company.
He said mergers can create synergies that produce a lot of value and pointed to the US Airways-America West Airlines merger in 2005.
The company’s market capitalization shot up from $125 million before the merger to more than $3 billion today, he said.
“That wasn’t brilliant management, that was created (by the merger),” he added.
Parker said although integration of America West and US Airways has not been easy, the costs pale in comparison to the value created.
“Just because it’s hard doesn’t mean you shouldn’t do it,” he said.
He added later that the industry is ready for consolidation, and that it will only become more so in the future.
Parker also touched on other hot-button issues such as executive compensation, saying that attractive compensation is key to attracting and retaining good talent. The topic was raised by the panel’s moderator, J. Randolph Babbitt, a managing partner at Eclat Consulting.
“I see that as a huge issue coming,” Babbitt said.
Parker said the issue wasn’t so controversial with employees during boom periods, as long as they feel like they’re also reaping the benefits.
David Woodfill, Tribune
US Airways chairman and CEO Doug Parker said the failed merger attempt between US Airways and Delta Air Lines has not dampened the company’s resolve to eventually consider another merger.
Parker’s comments came on Thursday after the 16th annual International Aviation Symposium at the Arizona Biltmore Resort & Spa in Phoenix.
Parker and other industry leaders discussed issues facing airlines, including executive compensation and the hypercyclical nature of the industry.
Parker told the audience of industry players the problem of overcapacity — too many seats and not enough passengers — could have been alleviated had the merger been successful. Parker said the two companies together would have stripped the industry of about four percent of overcapacity.
He said resistance from the executives of a targeted airline is one of the biggest hurdles during a consolidation attempt, even when it’s the last resort to turning around a company.
He said mergers can create synergies that produce a lot of value and pointed to the US Airways-America West Airlines merger in 2005.
The company’s market capitalization shot up from $125 million before the merger to more than $3 billion today, he said.
“That wasn’t brilliant management, that was created (by the merger),” he added.
Parker said although integration of America West and US Airways has not been easy, the costs pale in comparison to the value created.
“Just because it’s hard doesn’t mean you shouldn’t do it,” he said.
He added later that the industry is ready for consolidation, and that it will only become more so in the future.
Parker also touched on other hot-button issues such as executive compensation, saying that attractive compensation is key to attracting and retaining good talent. The topic was raised by the panel’s moderator, J. Randolph Babbitt, a managing partner at Eclat Consulting.
“I see that as a huge issue coming,” Babbitt said.
Parker said the issue wasn’t so controversial with employees during boom periods, as long as they feel like they’re also reaping the benefits.
Advertise on this site
Ads by Google
Ads by Google
