Jun 28, 2003
Dallas, TX
Got this from a friend. (Does this mean CLT employees should start looking for employment? In the wonderful world of AMR, it would.)


US Airways CEO Doug Parker assures N.C. senator of Charlotte hub status after merger with American Airlines

U.S. Senator Kay Hagan (D-N.C.) said today that US Airways chief executive Doug Parker assured her in a letter that Charlotte Douglas International Airport would remain a hub after the airline’s merger with American Airlines.

The merger of Fort Worth-based American and Tempe, Ariz.-based US Airways was announced in February as part of American’s plan to emerge from Chapter 11 bankruptcy later this year. The combined carrier, which will be the world’s largest airline, will be based in Forth Worth, with the Dallas-Fort Worth International Airport as its main hub.

“Miami is a strong local market and a fabulous gateway to Latin America,” Parker, who will be CEO of the merged airline, wrote in a June 20 letter to Hagan. “But there is no way it could replace our Charlotte hub with its ideal geographic location, strong local market, excellent infrastructure, and competitive costs,” wrote US Airways CEO Doug Parker, who will run the new American Airlines.”

The Charlotte airport is the world’s seventh busiest, with 649 US Airways flights a day.

Throughout the merger process, Hagan has sought reassurances about the Charlotte airport and most recently raised her concerns again following a recent report by the U.S. Government Accountability Office on the proposed merger. That report speculated Miami could become the combined airline’s Southeast hub.

“Charlotte Douglas Airport is one of the most efficient and cost-effective airports in the country, and I am committed to protecting the interests of its travelers and workers,” Hagan said in a statement. “Throughout the merger process, I have repeatedly sought assurances from both parties involved that Charlotte Douglas would retain its hub status, and I am pleased to once again hear from CEO Doug Parker that Charlotte will play a
(sorry when I cut and pasted I must have chopped off part of the article.)
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Sure, and...

1. Air Cal and the San Jose hub are an important part of AA's future on the West Coast.

2. St. Louis will continue to serve as a hub as part of the AA network. The last year that TWA operated as TWA, there were something like 400 departures/day from STL. Today it's about 30 departures/day, and most of those are either to DFW or ORD.

3. Nashville will be an important base of operations for AA. (This one, at least, twice. Someone told me they had a hub of sorts there back in the late 40's/early 50's.)

4. We welcome Reno Air and its network to the AMR family--a strategic addition to our network. Reno had several hundred flights/day out of RNO. Today, I think we have one or two flights DFW-RNO and return. Eagle may have a few in there also.

5. And, so on and so forth.

I would be particularly concerned about the STL history. STL had a lot more connecting traffic than local O&D. I understand the same thing applies to CLT? And, I still think that we need to look at the "hub" network east of the Mississippi after the merger. NYC (I just count LGA, EWR, and JFK as one), PHL, DCA, CLT, MIA, and ORD. Are 6 hub operations really needed? West of the Mississippi there are (officially) only two hubs--PHX and DFW.

There is also the issue of the size of the combined employee rosters. The combined US (and its subsidiaries) and the AMR group (AA and AE) will have over 100,000 employees. DL and UAL both have about 70,000. Though, our combination will result in the "world's largest airline" (for what that's worth), it won't be that much larger than DL or UAL--certainly not 30,000 employees larger. When cuts start to be made (and we all know cuts will be made), whether by early out buyouts or direct layoffs or both, I think whole bases will be sacrificed.

Whether we like it or not, that is the quickest and most efficient way to cut staff. Close the base or remove its hub designation (with severe staff reductions). Let the unions that have bump and flush privileges do the actual cutting. "We didn't lay you off. That guy from CLT that has seniority took your job."
Parker, et al will do/say anything they have to to get the merger through Congress and the Justice Dept.., short of making a contractual commitment with severe $$ penalties for non-compliance. After the merger is approved, the business (the NEW AA) will have full leverage to cut back as they see fit with the rationale that "IF WE DON'T, WE WILL FAIL" and cease to exist leaving 100K employees out of work and potentially drastically affecting the economy in various States. Senators/Congressmen will then squawk, but have little leverage to get involved in forcing non-binding commitments, which would affect the viability of the business. Parker (or ?) recently responded to a criticism from a PA Senator regarding the impeding closure of the Moon Operations Center and other potential future cutbacks at PIT, with the comment that the State (PA) will actually benefit form the merger because PHL is going to see significant buildup. A perfect example of non-enforceable Executive Speak to gain pre-merger approval. IMO, although it's unlikely PHL will see a reduction in size, it'll be adjusted along with JFK to form sister hubs to compete favorably with UA(CO) and DL for the valuable NE customer base and connecting international traffic - if the new AA management team have their hats on straight that is.