Cover Story: Urge to merge? - | WBTV Charlotte

Cover Story: Urge to merge?

CHARLOTTE, NC (WBTV) - There's speculation that Charlotte's biggest carrier US Airways could benefit from another airline's bankruptcy.

American Airlines filed for Chapter 11 protection on Tuesday.  Once the world's largest carrier, American is using the filing to become leaner and more cost-efficient.

Some analysts say US Airways, which has long been searching for a merger partner, may find just the opportunity it was looking for.

US Airways CEO Doug Parker was in Charlotte Tuesday for an already scheduled meeting with employees.  And he didn't avoid the topic of a merger telling workers that if the opportunity presents itself and it's good for US Airways, he wouldn't hesitate in pulling the trigger.

Could this be in Charlotte's horizon?  US Airways and American Airlines - the country's 3rd and 4th largest legacy carriers combining?

Though the bankruptcy filing will have little impact on American Airlines travelers here in the Queen City given the fact the airline has a limited number of flights the long-term effect on Charlotte could be huge if the two airlines get together.

Neither airline is commenting publicly.

But US Airways CEO Doug Parker, in a roundtable discussion reporters had with him two years ago, has always championed airlines merging.

"I think the industry benefits from consolidation because we're just too fragmented," he said.

Over the last decade the number of major airlines flying has gotten smaller as companies have merged and bought out one another.

As that's happened the bigger ones have cut out planes, cut out routes and cutback on staff to the point where the biggest airlines have managed to become more profitable.

American Airlines and US Airways are the only two hub-and-spoke carriers left standing who haven't gotten hitched.

And analysts say the time to do it is while one carrier is in bankruptcy court when it's able to get out of contracts and reduce costs.

Mike Flores, a 30-year veteran of the airline industry and head of Charlotte-based US Airways' flight attendants union, says American has wanted a southeast beachhead for a long time and Charlotte would benefit.

"Charlotte is by far the strongest asset that would look good for American. They don't have a strong southeast presence and it's hard to compete with Delta when Delta is so big in Atlanta. This would really help Charlotte," said Flores.

How would it help US Airways?   As it is now Charlotte's dominant carrier is not big enough to compete globally.

Being in the airline business is a global game now, American would help it in that respect.

But Bill Swelbar, a research engineer at the International Center for Air Transportation at MIT, cautions it's very early to speculate on a marriage.

"Can I envision a scenario where US Airways and American partner? Yes. I just think that we're still 12 months away from really understanding how the American restructuring is going inside of bankruptcy," said Swelbar.

American has given no indication that it's looking to emerge from bankruptcy as anything more than a stand alone carrier.

But right now it only has about $4 billion cash and if it burns through that quickly it may approach US Airways as a way to save itself.

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