Fliers Fed Up? Airline Employees Feel the Same

[700UW]

Article

 

[autofixer]

From the article above: "Mr. Parker said the merger saved two troubled airlines from potential financial ruin..."
Who saved who?

 

[N965VJ]

The rancor is not any worse at US Airways than at most other big carriers. What is different is that Mr. Parker, 46, subscribes to the let-it-all-hang-out school of employee relations. He says management learns a lot about how the airline is actually performing through an uncensored give-and-take — and he willingly provided transcripts of the Q. and A. sessions.

Well that’s all good and fine, but unless comments and questions are acted upon, Parker would be better to spend his time finding a suitable merger partner with adults to take over US.

 

[sharonstoneseat]

Spending a DAY at the hub in Charlotte, N.C., about one week into the mess "really was an ephiphany," Mr. Kirby said. "I wrote a diatribe on my Blackberry on my way back to Phoenix"

How about....I set up a command post (and a cot) at Charlotte Airport and I lived it for a week. I communicated with corporate right from the front line and did everything I could to help the agents right down to running to get them food if they needed it.

Sometimes these wired young turks need some old guy sensibility.

 

[vantheman63]

Spending a DAY at the hub in Charlotte, N.C., about one week into the mess "really was an ephiphany," Mr. Kirby said. "I wrote a diatribe on my Blackberry on my way back to Phoenix"

How about....I set up a command post (and a cot) at Charlotte Airport and I lived it for a week. I communicated with corporate right from the front line and did everything I could to help the agents right down to running to get them food if they needed it.

Sometimes these wired young turks need some old guy sensibility.

INCREDIBLY well said!

And what better way to get the people that make it all happen for the company on management's side....but actually living through it instead of reminding everyone what customers will and won't pay for.

Good call sharonstoneseat.

 

[whatkindoffreshhell]

"Actually, fish food would appear to be too costly. “We’ve worked with our purchasing team,â€￾ management explained, “to bring in many companies to compete on our main cabin tidbit item (pretzels). To date, no one has been able to match our current cost, about 3 cents per package.â€￾



How much cheaper can you go?

 

[jcw]

I still think it would have been better to let US go into liquidation. This way everyone would be much more happier on this board. No matter what US tries to do it will never make anyone happy.

 

[700UW]

US was not going to liquididate it still had the ATSB money funding the operation, I know I was at CCY with the IAM negotiating.

And dont forget it was US who raised the money for the merger, not HP.

 

[700AW]

US was not going to liquididate it still had the ATSB money funding the operation, I know I was at CCY with the IAM negotiating.

And dont forget it was US who raised the money for the merger, not HP.

the atsb funding, what would have happened when it ran out, or had to be paid back?????? did ccy tell you??
again, if US secured the funds for the merger, why did'nt they go it alone if they could raise it

 

[700UW]

How US Airways/America West merger got off the ground
Talks between airlines began in 2003, but didn't get serious until this year
Sunday, May 22, 2005
By Dan Fitzpatrick, Pittsburgh Post-Gazette
The on-and-off, 18-month courtship between US Airways and America West Airlines finally clicked into place May 12 in Washington, D.C., high above the floor of the MCI Center, where executives from both airlines had gathered in US Airways' skybox to watch a Washington Wizards playoff game.

Just minutes before tip-off, with the din of exploding fireworks filling the arena, US Airways adviser John Luth received an e-mail on his BlackBerry from Air Canada Chief Executive Officer Robert Milton. It confirmed that Air Canada's board had approved an investment in the combined airline -- the final piece of a $1.5 billion financing package needed to make the deal work.

Luth waved his BlackBerry, smiled and gave everyone the news. He congratulated Doug Parker and Bruce Lakefield, the chief executive officers of America West and US Airways, and broad smiles broke out throughout the box.

The merger was on.

Announced a week later at the Tempe, Ariz., headquarters of America West, the agreement between the nation's seventh-and eight-largest airlines paired a twice-bankrupt, East Coast legacy carrier with a younger, smaller, low-cost airline that does much of its flying on the West Coast.

If they can win a slew of antitrust, shareholder and bankruptcy court approvals, US Airways and America West together would surpass discount king Southwest Airlines in size, becoming the No. 6 carrier in the nation. Together, they also could usher in an era of consolidation in the troubled airline industry, which has lost more than $30 billion since 2001.

But there were several twists along the way, according to people familiar with the events. America West was not the only carrier to express interest in US Airways, nor was America West the only partner US Airways pursued.

The search for a deal began in the fall of 2003, when David Siegel was still US Airways' chief executive officer. Siegel had led US Airways through its first bankruptcy and wrested more than $1 billion in concessions from the company's labor unions. But even as the carrier completed a painful round of cost cuts and emerged from bankruptcy, Siegel knew US Airways was still too small and too inefficient to compete against discounters such as Southwest, which had already announced plans to start service in Philadelphia, a US Airways' hub.

Siegel was convinced that for US Airways to avoid the fate of failed carriers such as Eastern Airlines and Pan Am, both of which liquidated in the 1980s, he would have to bring US Airways' costs down further and position the airline for consolidation with another carrier. He explored several options.

Acquire United Airlines, the nation's No. 2 carrier. That option was code-named "Project Minnow," with US Airways as the small fish gobbling the bigger one.

Combine with British entrepreneur Richard Branson's Virgin Atlantic, which was interested in US Airways' Washington-Boston-New York shuttle, along with slots and gates in the Northeast.

Split the airline in two and merge the Philadelphia and Charlotte, N.C., hub-and-spoke network with one carrier and its slots and gates in Washington, Boston and New York with another.

But US Airways ultimately rejected those options. United did not have any interest in a deal and was too distracted by its own struggles in bankruptcy. Virgin Atlantic wanted lots of US Airways assets -- gates, planes, airport equipment -- to help launch a new U.S. airline, but all it would offer in retrun was the Virgin brand name. US Airways also turned down several inquiries from other carriers -- including Southwest, JetBlue Airways and AirTran Airways -- about acquiring the company's assets but not its employees.

In the end, only America West wanted both.

Siegel made the initial connection. He knew Parker and Executive Vice President Scott Kirby at America West. Their first face-to-face meeting was in October 2003, over dinner in a Washington, D.C., restaurant. They were joined by then-US Airways Chief Financial Officer Neal Cohen.

But the talks ended several months later. At the request of US Airways' board, Siegel departed from the company in April 2004. According to Parker, the first round of discussions failed because US Airways' costs were still too high. Siegel had started a campaign to lower union costs further, but labor leaders refused to deal with him, contributing to his ouster.

Retired Lehman Bros. executive Bruce Lakefield, a friend of US Airways chairman David Bronner, replaced Siegel and sought to save US Airways. He asked unions to help with another round of concessions. When that failed, Lakefield took the company into bankruptcy again and squeezed another $1 billion in concessions from the unions, using the power of the U.S. Bankruptcy Court to hammer home new contracts modeled after America West's labor agreements.

In January, with fuel prices at a record high and doubts aired about US Airways' survival after its Christmas baggage meltdown in Philadelphia, Lakefield picked up the phone and called Parker, suggesting that "maybe we should begin those talks again," according to Parker.

But America West did not have enough cash to lift US Airways out of bankruptcy. It was up to Luth, the US Airways adviser, to find enough investment money to piece the deal together and give the combined company a fighting chance to thrive in the battered airline industry.

Luth and US Airways had serious discussions with more than a dozen investors. They all requested shared participation in a merged airline -- no one wanted to take on all the risk. The Retirement Systems of Alabama, which rescued US Airways from its first bankruptcy in 2003 with a $240 million investment, stands to lose it all if US Airways emerges from bankruptcy and issues new stock.

Luth went after the companies that had something to gain from an investment in US Airways and America West. Aircraft maker Airbus agreed to provide $250 million in exchange for US Airways' pledge to buy dozens of A320 jets in the future. Regional commuter carrier Air Wisconsin Airlines made a $125 million investment in exchange for a jet services partnership. The Appleton, Wis.-based airline will fly for the merged carrier on a contract basis.

Credit card companies may provide $300 million in order to reach new customers. And once-bankrupt Air Canada offered $75 million, good for a 7 percent stake in the new company, in exchange for the rights to bid on the maintenance contract for the new carrier's fleet of 361 jets.

Air Canada was the last in line.

Once its approval came last Thursday, employees at both airlines scrambled to obtain approval from their boards of directors. US Airways' directors signed off Wednesday, over the telephone. America West's board approved it Thursday, in Tempe.

Labor leaders were briefed, and a press release was sent out. Parker and Lakefield spent much of Thursday night explaining the deal to reporters before Lakefield took a red-eye flight back to Washington. Parker, who has been tapped to lead the merged airline, met with employees and went home. Before going to bed, he explained the deal in one final live shot with local TV, from his house.

First published on May 22, 2005 at 12:00 am
Dan Fitzpatrick can be reached at [email protected] or 412-263-1752.
--------------------------------------------------------------------------------
Correction/Clarification: (Published 5/23/05) Air Canada, as part of an investment in the proposed US Airways-America West Airlines merger, has the right to bid only on the maintenance work that can be outsourced under existing labor contracts. It does not have the right to do the maintenance work on all 361 jets belonging to the combined airline, as described incorrectly in a story Sunday

.

Dont let the facts get in your way.

 

[700AW]

" from your quote( which i might add you seem to be able to pull out on a secon'ds notice to prove your point)

"Siegel was convinced that for US Airways to avoid the fate of failed carriers such as Eastern Airlines and Pan Am, both of which liquidated "

i made a mistke, i should have said, on account of hp's invovlement, the investors gave the cash

 

[700UW]

Skewing the facts?

Siegel was gone when US filed for bankruptcy the 2nd time.

Once again, Dont let the FACTS get in your way!

John Luth from Seabury and Associates, who was working for US not HP raised the money on his own, nothing with dougweiser.

 

[BoeingBoy]

John Luth from Seabury and Associates, who was working for US not HP raised the money on his own, nothing with dougweiser.

Interesting that Luth couldn't raise all that money until there was a merger to sell to investors.......

At the end of the day, it doesn't matter who raised the money. The ability to raise it was based on the promise of the merger. No Parker agreeing to a merger, no money. No money, no US. It's that simple.

Jim

 

[Dog Wonder]

'In the meantime, blunt employee input “keeps management extremely honest,â€￾ he said.'

He, is Parker. I guess honesty is expecting some one to believe what you say. As opposed to telling the truth.

 

[robbedagain]

pan am went out of business in 91 eastern i dont remember but for us to avoid that fate they sure did a he!! of a job raping the employees for the merger