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Entries in US Airways (12)

Tuesday
May282013

Feds Reject Airline CEO's Severance Deal

Photographer: Andrew Harrer/Bloomberg via Getty Images(NEW YORK) -- Too darn high! That’s the unofficial reaction to a sweet severance deal for the CEO of American Airlines.

The proposed merger of American and US Airways Group calls for CEO Tom Horton to lose that job and become chairman of the new company. US Airways boss Doug Parker would run the carrier. American has proposed severance pay of almost $20 million, along with lifetime flight benefits.

The objection filed by the U.S. Trustee’s office says American’s bankruptcy plan does not explain why Horton should get so much money. The objection says Horton’s contract calls for him to get $6.4 million if he had left at the end of last year, and raises the question of why he should get so much more money now.

The case will be decided by a federal bankruptcy court in New York.

Copyright 2013 ABC News Radio

Monday
Feb182013

Pros and Cons of an American and US Airways Merger

Andrew Harrer/Bloomberg via Getty Images(NEW YORK) -- American Airlines and US Airways still have to convince the Federal Trade Commission that their proposed merger doesn't create a monopoly, but company officials and industry observers seem confident it will go through.

So, if you're a frequent flyer on one, the other, or both, how will this affect you? Well, first of all, even the airlines themselves acknowledge the full merger process will take at least 18 months. So if you're worried about your frequent flyer miles, you have a year and a half to burn through them. In fact, while the two airlines are in the process of smushing themselves into one, you may well be able to use each airline's miles on the other. That's what Continental and United did when they merged.

All in all, travel experts say miles-holders usually "fare" fine in these situations -- pardon the pun. But there are upsides and downsides to everything. Here are some of the main ones.

Pro:

1. More places to go. The new airline, which will be called American, promises to make 6,700 flights a day on 600 planes to 336 cities in 56 countries! US Airways and American say they currently only have about a dozen truly redundant routes. If you have miles now on either airline, you'll be able to use them on the new airline to go to all these new places.

2. Nicer aircraft. American has been pushing and publicizing nice amenities like more seats that lie flat, personal in-flight entertainment systems, worldwide Wi-Fi and more seating where you can pay to get 4 to 6 more inches for your poor knees. American has made a big a hubbub about all this, and the new airline is being branded as American, so it's likely you'll see more of these features.

3. Possible Perks. American serves more meals in flight on shorter runs and lets you use miles to book one-way seats. On the other hand, US Airways is known for its enticing frequent flyer redemption rates, such as just 90,000 miles to fly business class to parts of Asia and 110,000 miles to Australia and South Africa. Many analysts fear these goodies will go away. But I view it differently. YOU, as interested flyers, have 12 to 18 months to lobby the new airline to keep the best of BOTH. Email and tweet your desires and demands and see what you can accomplish!

Con:

1. Fewer partner airlines. Nobody tracks frequent flyer mile programs as obsessively as Brian Kelly of ThePointsGuy.com. Kelly's intel is that the newly merged airline will choose to be a part of the OneWorld alliance, of which American is currently a member, and not the Star Alliance, with which US Airways has long been affiliated. "That means it will go from having 27 partners down to just 11," Kelly says. "But that still includes great partners like British Airways, Cathay Pacific and Qantas."

2. Potentially higher fares. In a conference call, the leaders of the new "Franken-airline" swore up and down that their marriage will bring fares down, not up. They argue that as a single, more robust airline they'll be better able to compete with the other big guys. However, fewer players traditionally mean higher prices. Classic supply and demand. So we'll see.

3. More customer competition. When any two airlines merge, there are more top-level flyers under one roof, whether they're called "elite" or "platinum."  That means competition for free seats and upgrades could be ratcheted up.

Copyright 2013 ABC News Radio

Thursday
Feb142013

American Airlines, US Airways Announce Merger

American Airlines(NEW YORK) -- It's official: American Airlines and US Airways have reached an agreement to become the world's largest airline.

In a statement Thursday, both carriers announced that their boards of directors "have unanimously approved a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion."

The combined carrier will operate under the American Airlines name and will be based in Fort Worth, Texas, the headquarters of American.  US Airways CEO Doug Parker will head the new company.

The new airline is expected to maintain all hubs served by American and US Airways and will offer "more than 6,700 daily flights to 336 destinations in 56 countries."

The merger is expected to be finalized by the third quarter of this year.

Copyright 2013 ABC News Radio

Thursday
Feb142013

What US Airways, American Airlines Merger Means for Travelers

PRNewsFoto/American Airlines(NEW YORK) -- American Airlines and US Airways announced on Thursday that they will merge their operations and become one airline, called American Airlines.  Together, they will be the world's largest airline by passenger traffic.

So what does the merger mean for travelers?  

In the short-term, travelers will see virtually no changes from either airline.  The merger still faces regulatory obstacles and must be approved by the Department of Transportation and the Justice Department.  If and when it passes that scrutiny, the process of merging the two airlines' operations will begin.

If you're holding a ticket on US Airways or American Airlines, that ticket will still be valid on the airline you planned to fly, on the day and time you planned to fly it.

When you get to the airport, you will head to the same airline check-in counter by which your ticket was issued.

The only possible exception is if you are holding a ticket for many months out and your airline's schedule changes as a result of the merger of flight schedules.  In this case, you will be contacted by the airline ahead of time, typically to the email address you provided when the ticket was purchased.

And members of either airline's frequent flier programs need not worry: Your miles are still valid on your airline and it's very unlikely you'll lose miles or elite status.  

American and US Airways will merge frequent flier programs.  The new American Airlines will be part of the oneworld Alliance.  US Airways will leave the Star Alliance.

Longer term, the merger could mean higher prices.  The U.S., in the last decade, has gone from six legacy carriers (Delta, Northwest, United, Continental, American and US Airways) to four (Delta, United, American and US Airways).

If this merger is approved, just three legacy carriers will remain.

Certainly, the higher fares can't all be attributed to consolidation in the industry (fuel costs, a reduction in available seats and the economy all factor in) but in general, less competition means higher prices.

Higher airfare tends to hit smaller cities harder than larger cities because smaller cities and airports have less competition.

On the up side, the merger will also mean more destinations for the new American Airlines.  US Airways passengers will benefit from American's international routes, particularly in Europe and Latin America.  American will be able to access the smaller U.S. cities where US Airways has a large presence.

Copyright 2013 ABC News Radio

Sunday
Feb102013

American Airlines, US Airways Expected to Announce Merger 

Medioimages/Photodisc/Thinkstock(NEW YORK) -- American Airlines and US Airways are expected to announce a merger this week after months of negotiations, the New York Times reports.

The merger would create the country's largest airline and would expand American's domestic network, especially in the Northeast and Soutwest, making it more competitive in the international market. It would also put the combined airline ahead of of Delta Air Lines and United Airlines, which have both grown through their own mergers in recent years, the paper says.

The new airline will be based in Dallas and will be named American Airlines, according to the New York Times.

Copyright 2013 ABC News Radio

Thursday
Feb072013

Merger Between American Airlines, US Airways Near

PRNewsFoto/American Airlines(NEW YORK) -- American Airlines unveiled a whole new look last month.  And now, it appears the carrier is about to get a whole lot bigger.

Sources tell ABC News affiliate WFAA-TV in Dallas that a merger between American and US Airways will be announced next week after more than a year of talks.  If the merger goes through, it would make the combined company the biggest airline in the U.S., surpassing United-Continental, according to the Wall Street Journal.

WFAA reports the new company would likely keep the American Airlines name and would be based in Fort Worth, Texas -- the headquarters of American -- but run by the CEO of US Airways.

So how would the consolidation impact consumers?  

On the plus side, Rick Seaney, the CEO of FareCompare, says it could mean newer equipment and technology for travelers.

"If this makes a stronger American Airlines and U-S Airways, they're going to have more money, that means they can invest in their products so some of us will actually, when we buy our next ticket, we may be flying a plane that was built this century and maybe even a few of us, something was actually built this decade," he tells ABC News Radio.

But the merger would cut down the number of airlines in the U.S., likely causing air fares to rise.

"I think, you know, in the short haul, probably no big deal.  In the long haul, it almost, it guarantees that these airlines will never compete and the number one driver of ticket prices is competition, so all things equal, it will drive up prices in the future," Seaney says.

Copyright 2013 ABC News Radio

Friday
Apr202012

American, US Airways Move Closer to Merger

American Airlines/US Air(WASHINGTON) -- In an email to employees Friday, US Airways CEO Doug Parker said the airline had reached agreements with the three unions that represent nearly 55,000 American Airlines employees on what their collective bargaining agreements would look like after a merger.

The three unions -- the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU) -- issued a statement announcing their support of a US Airways-American Airlines merger.

“This significant step represents our shared recognition that a merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process and restore American Airlines to a preeminent position in the airline industry,” the unions said in a statement.

The combined carrier will be branded American Airlines and be based in Fort Worth, Texas, according to Dave Bates, APA President.

APFA President Laura Glading said in a YouTube video, “As you know, American Airlines management has made several excessive demands of our contract since filing for bankruptcy protection last November. Not only were their demands unreasonable, but their business plan was uninspired and not viable. My fellow union leaders and I had no choice but to evaluate alternatives.”

She went on to say, “After careful consideration, the APFA Board of Directors voted unanimously to sign an agreement in principle with US Airways, knowing that it was in the best interest of the membership.”

Despite the developments, US Airways CEO Parker in his email noted that the news does not mean there is a merger agreement.  “It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality," Parker said.  "To get to an actual merger, many more things must happen, including gaining the support of AMR’s creditors, its management team and its Board of Directors.  But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.”

Parker also said the intention is to combine the two carriers’ networks, maintain both airlines’ existing hubs and aircraft, and ”create an airline that could compete successfully with United, Delta and other carriers within our industry.”

American has said it wants to leave Chapter 11 as a standalone carrier. It didn’t issue a comment on the union agreement.

AMR Corp., American Airlines’ parent company, filed for Chapter 11 bankruptcy Nov. 29, 2011.

Copyright 2012 ABC News Radio

Wednesday
Apr042012

US Airways Touts Savings, Sales as It Pushes for Merger with American

Tim Boyle/Bloomberg via Getty Images(NEW YORK) -- US Airways appears to be pushing ahead with calls for a merger with American Airlines.

Citing people familiar with the matter, The Wall Street Journal reports US Airways has told some of the bankrupt carrier's creditors that combining both airlines would lead to over $1.5 billion in cost savings and added sales.

AMR Corporation, the parent company of American Airlines, filed for Chapter 11 bankruptcy protection last November. 

Last month, it was first reported that US Airways was in talks to takeover American.  According to Bloomberg, proposals for the merger, laid out by US Airways executives, received a positive reception from some of the carrier's creditors.

Copyright 2012 ABC News Radio

Friday
Mar232012

US Airways to Takeover American Airlines?

Tim Boyle/Bloomberg via Getty Images(NEW YORK) -- US Airways is reportedly in talks to takeover the now bankrupt parent company of American Airlines, AMR Corporation.

People familiar with the discussions told Bloomberg that proposals for the merger, laid out by US Airways executives, received a positive reception from some of the bankrupt carrier's creditors.

According to the sources, the goal is to combine both airlines before AMR exits Chapter 11.

Talks of the possible takeover come four months after AMR filed for bankruptcy protection.  After years of losses, the company filed for Chapter 11 on Nov. 29 "in order to achieve a cost and debt structure that is competitive in the airline industry."

Copyright 2012 ABC News Radio

Monday
Apr042011

Which Airline Reigned Supreme In 2010?

John Foxx/Thinkstock(WASHINGTON) -- AirTran topped the list of last year’s leading airlines, according to a leading annual ranking.

The Airline Quality Rating, released Monday by teams at Wichita State University and Purdue University, ranks airline performance in four major areas: on-time performance, baggage handling, customer complaints and involuntary denied boardings. The industry, the report says, improved in three of those four areas; customer complaints was the only area where performance declined.

This year’s scores were the third best since the researchers behind the report began tracking airline performance 20 years ago.

Among the highlights:

  • Hawaiian Airlines had the best on-time performance in 2010; Comair had the worst.
  • AirTran boasted the best baggage handling rate; American Eagles had the worst.
  • Southwest Airlines had the lowest consumer complaint rate; Delta had the highest of those rated.


Here is this year's numerical ranking of the nation's leading 16 airlines, according to the Airline Quality Rating, with last year's ranking in parentheses:

  1. AirTran (2)
  2. Hawaiian (1)
  3. JetBlue (3)
  4. Alaska (11)
  5. Southwest (5)
  6. US Airways (8)
  7. Delta (15)
  8. Continental (6)
  9. Frontier (7)
  10. SkyWest (14)
  11. American (9)
  12. United (13)
  13. Mesa (12)
  14. Comair (16)
  15. Atlantic Southeast (17)
  16. American Eagle (18)

Copyright 2011 ABC News Radio







ABC News Radio