Sky Talk

US Airways CEO Doug Parker testifies at Senate hearing, defends slots at Reagan National

US Airways chief executive Doug Parker a testified at a Senate hearing on Wednesday, defending the proposed merger of their two airlines.

Questions arose about slots at Washington D.C.'s Reagan National airport and if the merged carrier should divest any of those slots to competitors.

The Government Accountability Office, also reviewed the $11 billion deal, and said in its testimony to the Senate committee that changing business conditions could cause the new American to shift its hub operations from Charlotte to Miami.

"The combined airline could be expected to rationalize its network over time,” the GAO wrote, “including where it maintains hubs.”

Parker defended the merger's benefits to consumers, noting that several small and mid-sized communities that are currently served by US Airways are not served by American and that will create new connecting route opportunities.

"Because we have been able to build a robust slot portfolio, US Airways currently serves 40 small- and medium-sized communities from Reagan National Airport. No other airline at Reagan provides any significant service to smaller communities, such as Charleston, West Virginia and Des Moines, Iowa," Parker said in his written testimony. "At DCA our customers benefit from access to and from a wide number of small cities and we are committed to small city service for the long term."

Click here to view a replay of the hearing. And to view written testimony submitted by Parker and by American Airlines' general counsel Gary Kennedy, check here.

-Andrea Ahles

American plans to add more seats to MD-80 and 737s

American Airlines plans to add more seats to its Boeing 737 and MD-80 fleets, according to a government filing made on Wednesday.

Vice president of flight services, Lauri Curtis, outlined the news in a letter sent to employees, saying the carrier hasn't determined yet how many seats it will add.

"On Tuesday, at a DFW Town Hall meeting with the newly announced Leadership Team for the new American, there was discussion about a decision to add seats to the MD-80 and 737 fleets and I wanted to share a recap of that with all of you. As you probably know, we are constantly taking a look at what our operation needs, and that includes how our fleet is configured. And sometimes, we make adjustments when we think it helps match supply to demand but can still be competitive. So from where we stand today, we expect to add seats to the 737 and MD-80 fleets, but we haven’t yet determined the right number of seats, and as a result, the impact on revenue and cost.

"Of course we are talking about adding seats and that automatically means the additional FA on a 737 regardless of the number of seats added. This will allow us to provide a higher level of onboard service while meeting the FAA staffing requirements. While this would obviously be good news for all of us, we are still working through the specific details and timing. So stay tuned! I’ll keep you posted!"

American's current 737 aircraft have 148 or 150 seats and it operates 195 of that aircraft type. The carrier also has 190 MD-80s, although it has been retiring those planes at it receives newer Boeing 737s and plans to add Airbus A319s to the fleet later this year.

Southwest Airlines has been squeezing six more seats into its Boeing 737s as part of its interior remodeling of the cabins that started in 2012. Its renovated 737s now have 143 seats.

-Andrea Ahles

Horton says he's grateful for departing American executives work as the airline operated in bankruptcy

American Airlines chief executive Tom Horton told employees that he is grateful for the work performed by departing American executives while the Fort Worth-based carrier has been in bankruptcy.

He also acknowledged in a message sent to workers on Monday that the new leadership team was made up primarily of executives from US Airways, which will merge with American later this year. US Airways chief executive Doug Parker will lead the newly combined carrier.

"As CEO of the merged company, Doug's first role is to choose the people to execute his plans to build a strong and successful future for the new American," Horton said.

Keep reading for the full letter from Horton.

-Andrea Ahles

 

Dear American Team:

 

Today marks an important milestone toward completion of our merger with US Airways. Doug Parker announced the leadership team who will lead the new American when the merger is complete, and we also named the new Board of Directors for the combined company. 

The new leadership team is composed mostly of leaders who have worked closely with Doug over the years, along with senior leaders who now serve on American’s team. As CEO of the merged company, Doug’s first role is to choose the people to execute his plans to build a strong and successful future for the new American.

Many on our current leadership team will be leaving the company after the merger closes later this year. To them I offer my gratitude for their extraordinary dedication over many years, and in particular, over the past year and a half to turn our airline around, creating a strong and renewed American poised for a successful merger.  In the weeks and months ahead, these leaders will continue to work with their counterparts at US Airways to ensure a successful merger integration.

Today’s announcements move us a step closer to a new chapter at American. I’m looking forward to serving as Chairman of our new Board after the merger closes. As Chairman, my first role will be to bring the new Board together in its mission to help guide the new American to a very bright future. 

There are no doubt more changes and challenges ahead, but the people of both companies have every reason to be optimistic about the future of American and the opportunities it will create. As we bring the restructuring to a successful close, we are building momentum which will only grow with the merger.

The American team across the world has shown tremendous spirit and strength. You should be very proud of your hard work to put American back on top.  

Thanks for all you do!

Tom

 

Parker thanks departing American executives, says it's time to move forward

In a letter sent to employees of US Airways and American Airlines, US Airways chief executive Doug Parker thanked departing American executives and said it is time to keep moving forward.

"We anticipate naming additional officers in the weeks ahead and will have the entire officer team selected by the time the merger closes, if not sooner. Looking ahead, I am confident that the new American will continue to provide great leadership opportunities for managers from both companies. In the meantime, please keep up the great work in support of our customers," Parker said in the letter.

Keep reading for the full letter from Parker.

-Andrea Ahles

 

June 10, 2013 

Dear American and US Airways Team Members,

Today I am pleased to announce the senior leadership team that has been selected to lead the new American Airlines. The team we are naming today is comprised of senior leaders from both American and US Airways. As individuals, they each have outstanding industry expertise and experience. Collectively, they form the best team in the industry. The team will be comprised of:

 

• ·         Scott Kirby: President
• ·         Elise Eberwein: Executive Vice President, People and Communications
• ·         Bev Goulet: Chief Integration Officer
• ·         Robert Isom: Chief Operating Officer and Chief Executive Officer of US Airways, Inc. post-close
• ·         Steve Johnson: Executive Vice President, Corporate Affairs
• ·         Derek Kerr: Chief Financial Officer
• ·         Maya Leibman: Chief Information Officer
• ·         Will Ris: Senior Vice President, Government Affairs

 

Scott, Elise, Robert, Steve and Derek will join the new American from US Airways. Bev, Maya and Will join from American.

I also wanted to let you know that Dan Garton will step down as President and Chief Executive Officer of American Eagle Airlines later this year. We will name a successor prior to Dan’s departure.

I could not be happier about this team. They are an intelligent, results-oriented and energetic group who enjoy working collaboratively. They are experienced airline executives who understand and love our business. They care about our customers and are dedicated to providing industry leading customer service with an unwavering commitment to safety. They understand they work for the shareholders of the new American and that their job is to reward the shareholders’ confidence in all of us.

And…they know that the only way they can accomplish all of those things is by engaging, motivating and respecting the more than 100,000 hard-working team members of the new American. Our job is to support all of you – to give you the tools and information you need to do your jobs and then let you do it as the exceptional and experienced group of aviation professionals you are. This team was built to do just that.

Mergers unfortunately result in departures, and there are some on both teams, but I want to use this opportunity to specifically thank some of the outstanding senior executives at American. The American restructuring is far and away the most successful in aviation history and it would not be possible without the exceptional and dedicated work of people like Dan Garton, Bella Goren, Gary Kennedy, Denise Lynn, Jim Ream, Jon Snook and Virasb Vahidi. We are grateful for their phenomenal work and dedication and are committed to building on the foundation they have put in place.

It is time to move forward and this announcement is a key step on the path. The merger is progressing well and we continue to expect it will close in the third quarter of this year. We anticipate naming additional officers in the weeks ahead and will have the entire officer team selected by the time the merger closes, if not sooner. Looking ahead, I am confident that the new American will continue to provide great leadership opportunities for managers from both companies. In the meantime, please keep up the great work in support of our customers.

I am excited about today’s announcement but even more excited about the years ahead and the opportunity to work with all of you. In fact, I can’t wait to get started. Thank you so much for your support and your commitment to the new American Airlines – we will be one team soon.

Doug

 

American-US Airways announce new management team, includes 5 US Airways execs and 3 American execs

American Airlines and US Airways announced their new executive team on Monday morning, naming five US Airways executives and three American executives to lead the combined carrier.

"This announcement is another step forward in creating the new American Airlines and opening a new chapter for its more than 100,000 team members," said US Airways chief executive Doug Parker, who was previously announced as the new CEO of the combined carrier. American chief executive Tom Horton will become non-executive chairman of the board, which was stated when the merger was announced in February.

The new executive team includes:

-Scott Kirby,45, as president. He is currently US Airways president.

-Elise Eberwein, 48, will be executive vice president of people and communications. She is US Airways' EVP of people, communications and public affairs.

-Beverly Goulet, 58, will take on the role of chief integration officer. She is currently American Airlines' treasurer.

-Robert Isom, 49, will become chief operating officer. He currently holds the position at US Airways.

-Stephen Johnson, 56, will be executive vice president of corporate affairs, a position he currently has at US Airways.

-Derek Kerr, 48, was named chief financial officer. He is currently the CFO at US Airways.

-Maya Leibman, 47, as chief information officer. She is currently CIO at American.

-William Ris, 65, will be senior vice president of government affairs, a position he has at American.

"As we bring the restructuring to a close, the new American is strong, renewed and positioned for a successful merger," Horton said in a statement on Monday.

American Eagle chief executive Dan Garton plans to step down from leading the regional carrier owned by AMR Corp. later this year. Parker said he will name a replacement for Garton at that time.

Not included in the executive team are several American executives including chief financial officer Bella Goren, general counsel Gary Kennedy, senior vice president of people Denise Lynn, senior vice president of operations Jim Ream, senior vice president of customer service Jon Snook and chief commercial officer Virasb Vahidi.

-Andrea Ahles

AMR says passenger traffic rose slightly, up 0.8 percent in May

AMR Corp. said its consolidated passenger traffic rose slightly, up 0.8 percent for May as it kept capacity relatively flat.

Its consolidated load factor was a record 84.0 percent, up 0.4 percentage points compared to May 2012.

The parent company of American Airlines said its unit revenues dropped 1.8 percent compared to the same month last year.

International passenger traffic grew 5.2 percent as it increased capacity by 4.5 percent. The load factor on international flights was 82.6 percent, up 0.6 percentage points.

Domestic traffic dropped 2.1 percent as capacity was cut 2.9 percent. The domestic load factor of 86.1 percent was 0.7 percentage points higher than May 2012.

-Andrea Ahles

 

Aug. 15 hearing set for AMR's reorganization confirmation

American Airlines' creditors could begin voting this month on the company's turnaround plan and proposed merger with US Airways, The Associated Press reported. A federal bankruptcy judge in New York gave American's parent company, AMR Corp., approval Friday to send solicitation material to creditors by June 20.

They'll have until July 29 to vote.

If creditors go along, the judge could confirm the reorganization plan at a hearing scheduled for Aug. 15, clearing the way for AMR to combine with US Airways and emerge from Chapter 11 protection.

AMR CEO Tom Horton said his company was “in the home stretch of our restructuring.”

The merger is still being reviewed by antitrust regulators at the Department of Justice. Based on current figures, American would become the biggest airline in the world, surpassing United Airlines in passenger miles.

Judge sets August 15 date for AMR bankruptcy confirmation hearing

U.S. bankruptcy judge Sean Lane has set an August 15 date for AMR Corp.'s confirmation hearing.

At the hearing, the court will consider confirming the plan if enough creditors have voted in favor of the plan that will allow AMR to exit bankruptcy.

American Airlines' parent company is now allowed to begin soliciting votes for its reorganization plan which includes merging with US Airways. The Fort Worth-based carrier will send out voting packages by June 20.

The voting deadline is July 29, the court order filed on Friday said.

"This is a significant step forward in our efforts to complete the most successful restructuring in aviation history," said AMR chief executive Tom Horton. "The proposed merger is expected to maximize recoveries for all of the company's economic stakeholders."

The judge approved AMR's disclosure statement at a court hearing earlier this week but did not rule on Horton's executive compensation package of $20 million. 

US Airways chief executive Doug Parker, who will be chief executive of the newly merged carrier, has not yet announced the new executive team for American-US Airways, although an announcement could come early next week.

-Andrea Ahles

Judge approves AMR's disclosure statement

U.S. bankruptcy judge Sean Lane approved AMR Corp.'s disclosure statement which outlines the Fort Worth-based carrier's restructuring plan.

The parent company of American Airlines plans to merge with US Airways as it emerges from bankruptcy. With the approval of the disclosure statement, AMR will meet with creditors who will vote on the reorganization plan later this summer.

"We’re pleased the Court has approved the Disclosure Statement, allowing us to move forward with our restructuring and our planned merger with US Airways," said American spokesman Mike Trevino. "Our Plan of Reorganization will maximize recoveries for all of our economic stakeholders and provide the foundation for a stronger future for our people and our customers."

-Andrea Ahles

American announces $119.7 million private offering

American Airlines announced a $119.7 million private offering of "pass through certificates" on Thursday.

The "Class C" certificates will be secured by eight Boeing 737-800s, one Boeing 777-200 and two Boeing 777-300 aircraft that American currently owns. It will also be secured by two new Boeing 777-300 planes American is scheduled to receive this summer.

The certificates will rank below the Class A and Class B certificates that American issued for $663 million in March.

-Andrea Ahles