The Valley's hometown airline could no longer be based in our hometown. U.S. Airways CEO Doug Parker is pushing for a merger with American Airlines.
That would move its corporate operations to Dallas and ditch the name for the American Airlines brand. It would also affect many parts of the local economy from small businesses to the real estate market.
In front of a national audience, Parker said he wants to talk merger with American Airlines.
"Just because we're doing well independently and have a model that works well, that doesn't mean we shouldn't work to make the model even stronger," he said.
Airline industry expert Dean Robert Mittlestaedt of ASU's WP Carey School of Business said the offer is on the table and it looks like Parker wants a quick response.
"Certainly when you're asking someone to marry you, or do a business transaction you have to tell them it's not going to be forever. Make a decision or not," Mittlestaedt said.
During the Q & A session after Parker's speech, he said the Tempe-based headquarters would move to Dallas and change its brand to that of American Airlines.
"We are well aware of the fact that of the two airlines, the stronger brand is the American brand," Parker said. "We think that's the right brand for the company, and furthermore happen to believe any airline named American Airline should be headquartered in Ft. Worth."
Mittlestaedt says that would mean hundreds of jobs would be relocated.
"There would be consolidations of call centers, financial functions and billing operations," Mittlestaedt said.
If people are moving out of the Valley, so is their cash.
"That has a ripple affect because all those people own houses, they drive cars, they go to the dry cleaners, drug stores and everything else. Any job loss like that is bad for a metropolitan area," said Mittlestaedt.
It would also mean another empty building, which the W. P. Carey company owns, another blow to the commercial real estate market and nearby businesses.
"At some point U.S. Airways would have to continue to pay the lease until it's finished, and you'd have to look for another tenant," Mittlestaedt said.
But the merger won't happen overnight. American Airlines has to agree to look at the proposal U.S. Airways is offering. U.S. Airways might not be the only suitor either, other airlines may want to look at propespective mergers with American. Also, a board of creditors would have to sign off on the deal. Mittlestaedt said that might take some convincing.
Copyright 2012 CBS 5 (Meredith Corporation). All rights reserved.
Tuesday, May 21 2013 5:20 PM EDT2013-05-21 21:20:54 GMT
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