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MERGER MAGIC
01 December 2005
US Airways' merger with America West was a great accomplishment for both airlines. Doug Parker, president and CEO, is confident that it will succeed.
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Is bigger necessarily better? Doug Parker, the CEO of the newly merged US Airways, thinks so. The merger of US Airways and America West Airlines has created the fifth-largest domestic US carrier. It has made it possible for US Airways to emerge from Chapter 11 and has given America West a much larger network.
The two airlines had discussed merging several times, but it was not until spring 2004 that talks began in earnest. Seabury Group, which was hired as financial adviser to US Airways, provided strategic advice and helped to devise a merger strategy.
"In spring 2004 we looked at a merger with America West but we concluded that it would be uneconomic unless US Airways could get its labour costs in line with America West's," says John Luth, CEO of Seabury Group. "US Airways attempted to do so out of court but this proved to be too difficult...
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