singh4us
Senior
ATW Daily News
Tuesday March 13, 2007
by Perry Flint
US Airways lost its bid to merge with Delta Air Lines (ATWOnline, Feb. 1), but US Chairman and CEO Doug Parker remains convinced that the "facts are irrefutable and compelling in favor of consolidation" among US carriers.
Speaking to the International Society of Transport Aircraft Trading 24th annual conference in Phoenix Monday, Parker cited the experience of America West Airlines and the old US Airways as evidence of consolidation's benefits. The merged carrier, which earned $304 million last year, has a market capitalization of $4.5 billion, up from just $150 million before the merger, he said.
However, he also believes consolidation likely will not happen until the next downturn, when carriers are under severe financial stress. He suggested two reasons that prevent mergers from occurring: Senior managers are more interested in preserving their own jobs than doing what is right for the shareholders, and fear of the unknown. "As messed up as our industry may be, there are a lot of people who are used to it," he said.
He also predicted that from an earnings perspective, 2007 will be a better year than 2006 but worried that capacity additions could mean that earnings slide in 2008. "I'm a little concerned about the number of aircraft coming into service later this year." Still, he remains optimistic, stating that the industry is set to have its best earnings year since the late 1990s and "it is hard to say there is excess capacity" in the US domestic market.
http://atwonline.com/news/other.html?issueDate=3%2F13%2F2007
Tuesday March 13, 2007
by Perry Flint
US Airways lost its bid to merge with Delta Air Lines (ATWOnline, Feb. 1), but US Chairman and CEO Doug Parker remains convinced that the "facts are irrefutable and compelling in favor of consolidation" among US carriers.
Speaking to the International Society of Transport Aircraft Trading 24th annual conference in Phoenix Monday, Parker cited the experience of America West Airlines and the old US Airways as evidence of consolidation's benefits. The merged carrier, which earned $304 million last year, has a market capitalization of $4.5 billion, up from just $150 million before the merger, he said.
However, he also believes consolidation likely will not happen until the next downturn, when carriers are under severe financial stress. He suggested two reasons that prevent mergers from occurring: Senior managers are more interested in preserving their own jobs than doing what is right for the shareholders, and fear of the unknown. "As messed up as our industry may be, there are a lot of people who are used to it," he said.
He also predicted that from an earnings perspective, 2007 will be a better year than 2006 but worried that capacity additions could mean that earnings slide in 2008. "I'm a little concerned about the number of aircraft coming into service later this year." Still, he remains optimistic, stating that the industry is set to have its best earnings year since the late 1990s and "it is hard to say there is excess capacity" in the US domestic market.
http://atwonline.com/news/other.html?issueDate=3%2F13%2F2007
