US Airways, left at altar 3 times, nears deal with American Airlines
After three failed attempts at major mergers, Doug Parker, chief executive officer of US Airways Group Inc., is approaching a deal to combine with AMR Corp.'s American Airlines and form the world's biggest carrier.
Parker, 51, has applied lessons from his previous efforts, shifting tactics in pursuing the bankrupt AMR. The two companies are working on final details, and their boards may vote on the deal later this week, people familiar with the matter have said. Parker would lead the combined company, the people said.
The deal would mark a career achievement for Parker, the longest-serving CEO among large U.S. airlines. It would complete the industry consolidation that he began in 2005 when his America West Holdings Corp. merged with US Airways, reduce the number of full-service domestic carriers to just three and bolster airlines' ability to raise fares.
“He learns from his past mistakes,” Gordon Bethune, the former CEO of Continental Airlines Inc., said in an interview. “He's done this the right way, and it's showing.”
US Airways began its pursuit in January 2012, less than two months after Fort Worth, Texas-based AMR sought court protection. The airlines agreed last week on post-merger leadership and the division of equity, people familiar with the matter have said. Parker would become CEO, and American's Tom Horton would become non-executive chairman, the people said.
With US Airways the fifth-biggest U.S. airline, a tie-up with No. 3 American would push the combined carrier to the top spot by global traffic, passing United Airlines and Delta Air Lines Inc., both of which eluded Parker in the past.
“Parker has been the No. 1 backer of consolidation,” said Bob Mann, a former American Airlines executive who runs aviation consultant R.W. Mann & Co. in Port Washington, N.Y. “He doesn't mind getting his nose bloody if he thinks it's the right thing to do.”
Hired in 1995 as America West's chief financial officer, Parker's tests began almost as soon as he became CEO in 2001, 10 days before the Sept. 11 terrorist attacks. Parker testified before Congress in support of a $15 billion airline-aid package as travel demand shriveled, saying America West was at risk of bankruptcy. It secured a $380 million federal loan guarantee.
The man known as a fierce competitor at salsa-making contests and go-cart races at US Airways' annual media day drummed up $1.5 billion to fund the America West-US Airways deal from backers that included planemaker Airbus SAS, former Air Canada parent ACE Aviation Holdings Inc., and hedge funds Par Capital Management Inc. and Peninsula Investment Partners LP.
“He's not a distant, standoff-ish kind of guy,” said Bethune, who was running Continental when Parker took the helm at America West. “He's a really bright, forward-thinking man and a great manager.”
Parker, whom US Airways declined to make available for an interview, had less success with his subsequent merger efforts.
His hostile 2006 bid for then-bankrupt Delta faltered after two months, as creditors and employees balked. In 2008, former United parent UAL Corp. walked away from talks with US Airways, saying that a combination wouldn't produce enough savings and that it wanted to explore a deal with Continental.
Parker was back in talks with United in 2010, only to be left at the altar again when Continental CEO Jeff Smisek jumped in and persuaded UAL's then-CEO, Glenn Tilton, to do the deal that created United Continental Holdings Inc.
Parker met his wife, Gwen, when she was working as a flight attendant at American, which recruited him when he was earning his Masters of Business Administration degree from Vanderbilt University in Nashville, Tenn. One of his co-workers at American was Horton.
A former football player and track athlete as an undergraduate at Albion College in Albion, Mich., Parker and his executives join US Airways employees each year in dressing up for Halloween.
Parker appeared last year as South Korean rapper Psy — of “Gangnam Style” video fame — complete with baby blue tuxedo jacket, black pants and sunglasses, and danced in the US Airways headquarters parking lot. Isom and Chief Financial Officer Derek Kerr, both wearing yellow jackets, joined him. “He's got the right personality to lead a team,” Bethune said.
“He would do a great job at American, and probably give it the juice it needs.”
--With assistance from Mary Jane Credeur in Atlanta . Editors: Ed Dufner, Kevin Miller
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- 10 million Americans sought help to enroll in Obamacare
- Judge nixes suit from Empire State Building investors
- New York home to 389K millionaires
- Amwell wastewater site to be shut down
- Consumer prices creep up 0.3% in June
- California firm issues nationwide fruit recall
- Federal appeals courts disagree on Obamacare subsidies
- China meat scandal hits Starbucks, Burger King, McDonald’s
- Sluggish growth elsewhere could infect healthy U.S. economy
- Latrobe’s Ci Medical Technologies transforms to medical device business
- Earnings mood turns more upbeat, gives stock market a boost