Skip to content

Puckinflight

An all things aviation blog

Tag Archives: Doug Parker

Doug Parker spoke today at the J.P. Morgan Aviation, Transportation, and Defense conference today on the proposed merger with American Airlines, who did not speak. Doug was speaking to a group of industry analysts so he was primarily in the roll of selling the merger to the bankers. He spoke and took questions for about 40 minutes and the entire webcast is archived at the link below for at least the next few months. Beyond the normal this merger is the greatest thing ever, I want to highlight a few pieces of information that he did say. Looking at the combined carrier, they expect to be the third largest on the West Coast, largest in Middle American and the largest carrier on the East Coast. Doug sold this as creating a viable third option to United and Delta. With the movement of US from Star Alliance to Oneworld it will give each alliance an equal share of the domestic market. This is just another way of stating that Delta, American, and United will all be about the same size. Finally as part of his presentation, Doug mentioned that the new AA would have over 100,000,000 members in the new loyalty program.

The question and answer section had a lot of interesting information if you look at it. In response to a question of merger difficulties he said that no matter the supposed cost benefits, the throughput costs of imposing the smaller airlines systems on the larger airline would be more expensive. This referring to United Airlines’ SHARES hiccup which wasn’t really that bad. But it does suggest that a lot of the systems will be coming from AA. Responding to a livery question Doug refused to pass judgment on AA’s new livery and said only that livery has to be professional and represent the brand. He also said what everyone already that passengers don’t care about what’s on the outside of the plane. In response to a route network question, Doug said to expect some Asia expansion but not to the level of Delta and United. Finally, when asked about the disparate nature of AA’s and US’ fleet Doug stated that there is no real advantage to eliminating large sub-fleets over 100+ aircraft but there is a distinct advantage to eliminating the small sub-fleets. Assuming current orders are correct, that would mean that Doug is going to look at eliminating AA’s 767-200s and some of their 757s. This is not unexpected, but on the US side it would include eliminating their entire widebody fleet A330’s and 767-200s, as well as their 757-200s and ERJ-190’s. Airbus has been cutting Doug sweetheart deals for aircraft for some time now. I don’t see them giving Airbus the boot, so it will be interesting to see what happens to US’ widebody fleet.

http://jpmorgan.metameetings.com/webcasts/aviation13/agenda.html

I’ll have the other participants summaries up as I write them.

Happy Travel!

Colpuck

Tags: , , , ,

Bloomberg is reporting that AA and US board of directors will both meet on Monday to vote on the proposed merger.

http://www.bloomberg.com/news/2013-02-08/amr-us-airways-said-near-merger-deal-as-boards-to-vote.html

The combined carrier will be called American Airlines and will be 72% held by the creditors committee. The other 28% will be held by US Airways stockholders. American stockholders will be bought out, at a yet to be determined price. Doug Parker will become CEO and Tim Horton the non-executive chairman for one to two years. In a move that looks a lot like the UA merger.

There are still details to be worked out, but it looks like it really could happen.

Tags: , , ,