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January 30, 2013

Why one Wall Street analyst says US Airways CEO Parker should run the merged airline

As merger talks progress between American Airlines and US Airways, there has been quite a bit of discussion about who should run the combined airline.

In a research note sent out on Wednesday, Buckingham Research Group analyst Dan McKenzie gave investors three reasons why he thinks US Airways chief executive Doug Parker should take the helm.

McKenzie first questioned American management's plan to grow capacity by 20 percent in the next five years after it emerges from bankruptcy, saying that strategy would hurt the whole airline industry. He then pointed out that American's labor unions do not have a favorable view of AMR chief executive Tom Horton, delivering a "no confidence" petition to Horton's office last year.

I called the Allied Pilots Association on Tuesday to ask the union what it thought of Horton possibly sticking around post-merger and they politely declined to comment.

And McKenzie's third point:

"Bondholders report the leader must have a demonstrated ability to maximize shareholder value, which is a nod to US Airways mgmt. in our view. Our view aside, we’ve had a hard time finding investors in favor of AMR mgmt, hence our conclusion is that a consensus is in favor of an US Airways led mgmt. team running the merged airline," McKenzie wrote.

-Andrea Ahles

 

 

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Comments

Joe Don

To your second point: AA employees have despised management since deregulation.

RL

It must be a tremendous blow to Tom Horton's ego to read all the no-confidence comments from various analysts. The writing on the wall must be devastating:)

casual observer

Not to worry...AA labor groups will turn the ire towards Parker once the shine wears off of the newly minted merger. These folks never disappoint!

Andrew

Maybe I just don't get it, but Horton/AA management were the ones that delayed bankruptcy to the harm of the overall organization, while Parker is the guy who has made a ton of money by not paying his employees market wage. And the unions are backing the guy who pays less. Can anybody explain this to me?

Wings367

I would hate it if AA increased capacity. Then we couldn't have higher fares and overbooked planes. According to analysis, the industry should make a concerted effort to lose luggage and start a fee for the terminal seats.

lupelou

unions will destroy the company no matter who is ceo

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