America West Holdings would have declared bankruptcy in 2005 if it hadn't agreed to merge with US Airways Group last May, said its chairman and CEO at the airline's annual shareholders meeting Wednesday morning.
"We knew if we didn't raise capital, America West would have to file bankruptcy by year-end," US Airways head Doug Parker told shareholders attending the meeting in Charlotte, N.C. The meeting was broadcast over the Internet.
The companies agreed to merge May 19, 2005, he said, because they had complementary strengths and weaknesses. Namely, US Airways had a strong revenue base but high overhead, while America West had low labor costs but limited revenue.
The merger, effective last September, produced "an amazing turnaround for US Airways," said Parker. He cited a recently posted, first-quarter net profit of $5 million and on-time flight arrivals that led the industry in the fourth and first quarters.
Merged legally and financially, US Airways now is trying to combine labor contracts and more of its operating systems. Talks with pilots, for instance, have already begun.
Copyright 2005 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
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