Airline merger brings optimism
US Airways' merger with America West, born of desperation, is creating hope for a new start.
By Tom Belden
Inquirer Staff Writer
W. Douglas Parker, chief executive officer in waiting of US Airways, ventured into the employee-only areas of the Philadelphia and Charlotte, N.C., airports last month, meeting dozens of the airline's ticket agents, flight attendants, pilots and baggage handlers.
Parker, who is now CEO of US Airways Group Inc.'s merger partner America West Airlines, said that what he heard from US Airways workers bore a striking similarity to the way America West employees talked in the summer of 2000, when his airline had one of the industry's worst records for on-time flights.
"My favorite test was to ask the people at US Airways, 'Do you feel good about wearing your uniforms, your US Airways logos, out in public?' " he said. "In both places, the answer was an almost unanimous 'No.' We had the exact same problem... in Phoenix," America West's largest hub. "People were afraid to wear their America West gear out in public because someone would tell them what a terrible experience they had on the airline."
Parker, 43, former chief financial officer of America West, said he is determined to change that attitude among US Airways employees, demoralized by thousands of layoffs of coworkers and three cuts in pay and benefits in three years because of the airline's dismal financial condition.
What should be heartening for US Airways employees and customers is that for the first time in years, both the battered US Airways workforce and those soon to be in charge sound as if they speak the same language.
Words such as hopeful and optimistic crop up in conversation with both US Airways workers and the executive team, most of them from America West.
The airlines announced May 19 that they had found the investors needed to save US Airways from liquidation, after eight months in Chapter 11 bankruptcy protection, by combining their far-flung route systems into a single, low-cost carrier. The new entity will keep the better-known US Airways name, and little about the airlines' flights or service is likely to change immediately.
One certain change is that US Airways' headquarters will move from Arlington, Va., to the Phoenix suburb of Tempe, Ariz., and the majority of its senior executives will come from America West once the deal closes in mid-October.
Laura Albert, president of the US Airways Philadelphia local of the Association of Flight Attendants union, said she had "not heard a disparaging word" from her members who have heard Parker and other managers talk about their plans.
"I think the flight attendants at US Airways have been waiting for that white knight to come along, and I'm hoping that white knight is Doug Parker," Albert said.
Parker, while realistic about the challenge he and other managers are taking on, is even more upbeat.
The corporate culture at US Airways today is "resilient and hopeful," he said in an interview last month at America West's headquarters in Tempe, a few miles from its biggest hub at Phoenix Sky Harbor International Airport. "People are looking for a light at the end of the tunnel, that all they've given is not in vain. They're looking for an end to the series of negative news they've been beset with."
Parker described the transaction itself, including raising $650 million in new equity investment from hedge funds, aircraft-makers and others, as "no small feat." Like all airlines, US Airways will have to cope with skyrocketing jet-fuel costs, which makes industry analysts question the airline's ability to carry off its ambitious plans to merge into a money-making company.
But the biggest hurdle, Parker said, will be the cultural marriage of 56-year-old US Airways, a mostly East Coast carrier where many managers still wear ties to work, and 22-year-old America West, a more relaxed company where open collars and golf shirts are standard.
"The real integration work is going to be getting people to work together as a team at one airline and move forward together," he said. "I think we're up to the challenge... . I think it's fully manageable, but if we choose not to manage it, we could find all the work we did on the transaction be for naught."
The new US Airways executives will be helped by their experience in turning around America West in 2000, when chronically late flights gave it one of the industry's worst on-time records and the Federal Aviation Administration was scrutinizing it for its aircraft-maintenance practices.
Parker, who was America West's president in 2000, said the maintenance issues resulted in not having airplanes at airport gates, ready to fly, when they were scheduled. That led to unhappy passengers yelling at gate agents and flight attendants day in and day out, who in turn were perceived as rude when tempers flared. Employees were embarrassed to wear their America West uniforms or logos in public for fear a customer would accost them with another complaint about lousy service, he said.
America West overcame the problem by identifying its cause, laying out a plan to solve it, and asking employees at every level for ideas to implement the plan, Parker said. "We put in place the tools to make sure we ran a good airline," he said. "When we did that, all of the sudden people felt good about their company... . Our sales of America West paraphernalia have never been higher. Our employees are proud to walk around with their logos on."
The new leaders of US Airways know they need to confront operational problems at Philadelphia International Airport, the airline's main hub for overseas flights and its largest single source of revenue. Philadelphia customers grumble about uneven baggage service, chronically late flights, and some threadbare, unkempt gates. US Airways is the airport's largest carrier, with two-thirds of the flights and passengers, and more than 5,000 employees.
Parker said he didn't know enough yet to say how the new management would solve the problems, particularly with baggage service. It may require more ground equipment or more employees on certain shifts. The airline may determine it is operating more flights than the airport can handle, given its chronically congested runways.
But Parker said that in conversations with US Airways employees at Philadelphia and Charlotte, the airline's other big hub, workers sound much like America West's frustrated workforce of five years ago.
"I think most of the problems we have at US Airways today boil down to our ability to... give people the tools they need, give them a product they can implement," he said. Because Philadelphia is the airline's largest source of revenue, "one of the top objectives of the new management team... will be getting the Philadelphia operation improved so we can provide the customer service employees so badly want to provide."
US Airways' merger with America West, born of desperation, is creating hope for a new start.
By Tom Belden
Inquirer Staff Writer
W. Douglas Parker, chief executive officer in waiting of US Airways, ventured into the employee-only areas of the Philadelphia and Charlotte, N.C., airports last month, meeting dozens of the airline's ticket agents, flight attendants, pilots and baggage handlers.
Parker, who is now CEO of US Airways Group Inc.'s merger partner America West Airlines, said that what he heard from US Airways workers bore a striking similarity to the way America West employees talked in the summer of 2000, when his airline had one of the industry's worst records for on-time flights.
"My favorite test was to ask the people at US Airways, 'Do you feel good about wearing your uniforms, your US Airways logos, out in public?' " he said. "In both places, the answer was an almost unanimous 'No.' We had the exact same problem... in Phoenix," America West's largest hub. "People were afraid to wear their America West gear out in public because someone would tell them what a terrible experience they had on the airline."
Parker, 43, former chief financial officer of America West, said he is determined to change that attitude among US Airways employees, demoralized by thousands of layoffs of coworkers and three cuts in pay and benefits in three years because of the airline's dismal financial condition.
What should be heartening for US Airways employees and customers is that for the first time in years, both the battered US Airways workforce and those soon to be in charge sound as if they speak the same language.
Words such as hopeful and optimistic crop up in conversation with both US Airways workers and the executive team, most of them from America West.
The airlines announced May 19 that they had found the investors needed to save US Airways from liquidation, after eight months in Chapter 11 bankruptcy protection, by combining their far-flung route systems into a single, low-cost carrier. The new entity will keep the better-known US Airways name, and little about the airlines' flights or service is likely to change immediately.
One certain change is that US Airways' headquarters will move from Arlington, Va., to the Phoenix suburb of Tempe, Ariz., and the majority of its senior executives will come from America West once the deal closes in mid-October.
Laura Albert, president of the US Airways Philadelphia local of the Association of Flight Attendants union, said she had "not heard a disparaging word" from her members who have heard Parker and other managers talk about their plans.
"I think the flight attendants at US Airways have been waiting for that white knight to come along, and I'm hoping that white knight is Doug Parker," Albert said.
Parker, while realistic about the challenge he and other managers are taking on, is even more upbeat.
The corporate culture at US Airways today is "resilient and hopeful," he said in an interview last month at America West's headquarters in Tempe, a few miles from its biggest hub at Phoenix Sky Harbor International Airport. "People are looking for a light at the end of the tunnel, that all they've given is not in vain. They're looking for an end to the series of negative news they've been beset with."
Parker described the transaction itself, including raising $650 million in new equity investment from hedge funds, aircraft-makers and others, as "no small feat." Like all airlines, US Airways will have to cope with skyrocketing jet-fuel costs, which makes industry analysts question the airline's ability to carry off its ambitious plans to merge into a money-making company.
But the biggest hurdle, Parker said, will be the cultural marriage of 56-year-old US Airways, a mostly East Coast carrier where many managers still wear ties to work, and 22-year-old America West, a more relaxed company where open collars and golf shirts are standard.
"The real integration work is going to be getting people to work together as a team at one airline and move forward together," he said. "I think we're up to the challenge... . I think it's fully manageable, but if we choose not to manage it, we could find all the work we did on the transaction be for naught."
The new US Airways executives will be helped by their experience in turning around America West in 2000, when chronically late flights gave it one of the industry's worst on-time records and the Federal Aviation Administration was scrutinizing it for its aircraft-maintenance practices.
Parker, who was America West's president in 2000, said the maintenance issues resulted in not having airplanes at airport gates, ready to fly, when they were scheduled. That led to unhappy passengers yelling at gate agents and flight attendants day in and day out, who in turn were perceived as rude when tempers flared. Employees were embarrassed to wear their America West uniforms or logos in public for fear a customer would accost them with another complaint about lousy service, he said.
America West overcame the problem by identifying its cause, laying out a plan to solve it, and asking employees at every level for ideas to implement the plan, Parker said. "We put in place the tools to make sure we ran a good airline," he said. "When we did that, all of the sudden people felt good about their company... . Our sales of America West paraphernalia have never been higher. Our employees are proud to walk around with their logos on."
The new leaders of US Airways know they need to confront operational problems at Philadelphia International Airport, the airline's main hub for overseas flights and its largest single source of revenue. Philadelphia customers grumble about uneven baggage service, chronically late flights, and some threadbare, unkempt gates. US Airways is the airport's largest carrier, with two-thirds of the flights and passengers, and more than 5,000 employees.
Parker said he didn't know enough yet to say how the new management would solve the problems, particularly with baggage service. It may require more ground equipment or more employees on certain shifts. The airline may determine it is operating more flights than the airport can handle, given its chronically congested runways.
But Parker said that in conversations with US Airways employees at Philadelphia and Charlotte, the airline's other big hub, workers sound much like America West's frustrated workforce of five years ago.
"I think most of the problems we have at US Airways today boil down to our ability to... give people the tools they need, give them a product they can implement," he said. Because Philadelphia is the airline's largest source of revenue, "one of the top objectives of the new management team... will be getting the Philadelphia operation improved so we can provide the customer service employees so badly want to provide."
