(Photo by Joe Raedle/Getty Images)
Hide Caption

New American Airlines CEO vows to make merger work

a a a a
Share this story

FORT WORTH, Texas (AP) -- American Airlines and US Airways seem an unlikely couple, even to the man who will lead the combined company after their merger on Monday.

Doug Parker says, however, that American's buttoned-down, corporate culture will be the perfect complement to his scrappy US Airways, where "we sometimes fire before we're ready."

At his spartan, temporary office in American's Fort Worth headquarters, the longtime US Airways CEO sat down for a wide-ranging interview with The Associated Press.

Parker talked about the merger, the government's attempt to block the deal, looming competition from foreign airlines, and the public's perception of air travel. The answers have been edited for length and clarity.


Q: Do you see a gap widening between people in first- or business-class and leisure travelers in the back of the plane?

Parker: No, I don't necessarily. You described it as the front versus the back, and the reality is all the seats in coach are not the same, and customers prefer certain ones over others and are willing to pay more either through loyalty or just paying more for a ticket in order to get a better seat in the coach cabin.

I don't see a gap first versus coach as being a major change going forward.

Q: What are your biggest challenges in making this merger work?

Parker: It's two complex organizations that need to be melded into one over time. That's the biggest challenge by far. It's not easy, but we have people that have done it before -- both airlines have been through a merger in the semi-recent past. We have consultants on board who've done this with other carriers, so we'll learn from what we've seen at others as well as what we've seen ourselves.

Q: Were Justice Department officials right when they said the merger would cause prices to rise?

Parker: Airline prices are like prices in other businesses - they track with supply and demand, and we're not reducing any of the supply. Prices may change because demand changes, or they could change for any number of factors like costs going up, but this merger shouldn't have an impact on prices one way or another because we're not taking out any seats.

Q: Will you still compete chiefly on price?

Parker. We know that something around 25 percent of our customers will go to the lowest price irrespective of time or inconvenience. In a low-margin business like ours, you can't give up 25 percent of your customers, so we have to match on price.

Q: What's the new American's frequent-flier program going to look like?

Parker: Nothing yet to announce. What we do know is this: Customers immediately will be able to combine their miles and use their miles to fly on a larger network.

Q: Would you raise the number of miles needed to earn a trip, or change to a point system?

Parker: I don't know. It's going to be important to compete on the in-flight product, it's going to be important to compete for frequent fliers, who will have now three real options to travel around the world.

Q: Are you worried about competition from the fast-growing Middle Eastern carriers?

Parker. They're a real threat. This is a global business and one where we have to compete globally. We can't ignore any global threat and we can't be asked to compete on different terms.

Q: Do you mean the U.S. subsidies for foreign airlines that buy Boeing planes?

Parker. That's one thing. There are a number of areas -- their (lower) taxation versus the taxation the U.S. government puts on U.S. carriers; the access they're getting (to closed markets).

Q: Can U.S. airlines ever provide the same level of service as the best Asian and Middle Eastern airlines?

Parker: Of course we can. on the ability to get people to more places, to do so safely and efficiently and with seats that are as good or better than anyone else's in the world -- the things customers really care about -- we can. They do have some advantages, but we can compete against those carriers, certainly on like routes.

Q: You said recently that US Airways has more of a bias for action than American. What did you mean?

Parker: The culture of American is probably a little more buttoned down than the US Airways culture, but that has some real benefits. The US Airways culture is, I think, a little more open and does have a little more bias for action. That also means we sometimes fire before we're ready.

Q: You also said that if the DOJ lawsuit stopped the merger, it would have been less exciting to go back to the way things were.

Parker: I was certainly thinking, `How do we motivate the team?' (He had promised US Airways employees pay raises, and senior executives stood to get jobs with the new company.) It was going to be a lot harder to go back and tell them, `Well, now we're back to where we were.'

Q: Tell us about yourself. Do you have any hobbies?

Parker: I used to run, and my knee now is down to not much cartilage, so I do the elliptical (exercise machine) instead. Most of what I'm doing, if I'm not working, is with my family. I have three kids - one in college,

a sophomore in high school, and a girl who's in eighth grade.

Q: When was your last vacation, and where did you go?

Parker: We took a few days and went over to Southern California at the end of July with the family. We haven't had a real, get-out-of-the-country vacation in too long.

Q: Finally, why do people love to hate the airlines?

Parker: I don't know. It's something we need to get past. It affects the people that work at the airlines. We have people out there every day who do just amazing things to help get people from Point A to Point B. It's a noble job. It drives commerce, it gets people to go see their loved ones, it gets people to be able to see the world.

1 2

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Print this article


Hmm... It looks like you’re not a WCPO Insider. or Subscribe now to contribute!

More National Business
American, US Airways tweak fees, mileage rules
American, US Airways tweak fees, mileage rules

If you use miles to get a free ticket on American Airlines, you may have to pay to check that suitcase.

How much of your beer money goes to taxes?
How much of your beer money goes to taxes?

The states on each side of the Ohio River are at opposite spectrums when it comes to how much your favorite pint of beer is taxed.

Luxottica shares rise on Google Glass deal
Luxottica shares rise on Google Glass deal

Shares in Italian eyewear maker Luxottica have risen sharply on the announcement that it will make frames for Google's new…

RadioShack closing 1,100 stores as troubles grow
RadioShack closing 1,100 stores as troubles grow

RadioShack plans to close up to 1,100 stores in the U.S. as its troubles continue to grow.

Data-breach costs take toll on Target profit
Data-breach costs take toll on Target profit

Target Corp says the massive data breach over the holidays helped push its profit down 46 percent.

Yellen: Cont'd pullback in Fed stimulus likely
Yellen: Cont'd pullback in Fed stimulus likely

Federal Reserve Chair Janet Yellen says that if the economy keeps improving, the Fed will take "further measured steps" to reduce…

Applications for US jobless benefits fall to 331
Applications for US jobless benefits fall to 331

The number of people applying for U.S. unemployment benefits declined 20,000 last week to 331,000, suggesting that Americans are facing fewer…

CVS Caremark to stop selling tobacco products
CVS Caremark to stop selling tobacco products

CVS Caremark is kicking the habit of selling tobacco products at its more than 7,600 drugstores nationwide.

Satya Nadella tapped as new Microsoft CEO
Satya Nadella tapped as new Microsoft CEO

Microsoft has named Satya Nadella, an executive in charge of the company's small, but growing business of delivering software and…

Markets steady despite massive sell-off in Japan
Markets steady despite massive sell-off in Japan

Financial markets steadied Tuesday after the turmoil of the previous day reverberated into the Asian session. However, lingering concerns…

Market Summary
The Dow Jones Industrial Average SM is proprietary to and is calculated, distributed and marketed by Dow Jones Indexes, a licensed trademark of CME Group Index Services LLC and have been licensed for use. "Dow Jones(r)", "Dow Jones Indexes" and "Dow Jones Industrial Average SM" are service marks of Dow Jones Trademark Holdings, LLC. "CME" is a trademark of Chicago Mercantile Exchange Inc. All content of the Dow Jones Industrial Average (c) CME Group Index Services LLC 2010.