Panel approves airline merger - East Valley Tribune: Business

Panel approves airline merger

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Posted: Saturday, July 23, 2005 4:36 am | Updated: 9:03 am, Fri Oct 7, 2011.

US Airways is expected to close its Virginia headquarters early next year and move its employees to America West headquarters in downtown Tempe.

In published reports, Bruce Lakefield, the company’s chief executive officer, said US Airways Group expects to shut down its headquarters in Arlington, Va., in "three to six months or less" after the planned merger with America West closes in September or October.

The facility employs nearly 600.

In a separate development Friday, a federal panel that is backing more than $1 billion in loan guarantees at the two airlines approved the merger, one of the last major hurdles for the deal.

The Air Transportation Stabilization Board voted unanimously to approve the deal saying the merger "provides for a more competitive cost structure and increased liquidity which should better both airlines’ competitiveness in a challenging industry environment."

Pending final bankruptcy court and US Airways board approval and upon close of the merger, the two airlines’ outstanding loan guarantees will be consolidated with payments beginning in S eptember through September 2010. Final terms are still being negotiated.

The board would have the right to buy an 11 percent stake in the new company. The board was established by Congress to oversee a $10 billion loan program, part of an airline industry bailout after the Sept. 11, 2001, terrorist attacks.

The merger must still be approved by America West shareholders and US Airways creditors.

The combined company will be headed by America West chairman and CEO Doug Parker, but it will take the US Airways name.

America West spokesman Phil Gee said closing US Airways’ headquarters will result in more jobs in the East Valley, but he said the number has yet to be determined. America West will not need to expand its headquarters or any of its other Valley operations, Gee said.

"There’s empty cubes in corporate headquarters, quite a few, so, from that standpoint, I don’t think it’s a concern," he said, adding the marketing department is expecting to add jobs.

The company employs 10,000 in the Valley and 600 at its headquarters on Rio Salado Parkway.

Parker is expected to announce a slate of officers from both airlines soon, Gee said. Until then, it’s difficult to tell how many more jobs will be added because work charts are still being reviewed, he said.

"If you were a US Airways guy that’s going to be running a certain department, then you can’t go out and determine how many people you’re going to need and how much you’re going to have to expand," Gee said.

Upon bankruptcy court approval, the two airlines are planning changes that will be easily seen by passengers even though the combined carrier will continue to run on two separate federal operating certificates for two to three years.

Banners with both company’s logos will go up at 200 airport ticket counters and other locations where the airlines have wall signs. The sign at America West’s headquarters will quickly change following court approval, Gee said. What America West Arena will be renamed is not decided, he said.

Until the carriers are using one ticketing and reservation system, passengers will continue to have tickets that read either America West or US Airways.

"What we’re going to try to do immediately is to make sure the things that will benefit the customers — merging the frequent flier programs, merging the route network so a passenger in Phoenix could fly from here to Rome with one stop on the East Coast — those are the things we’re going to try to realize immediately," Gee said.

Planes will be repainted and labor groups will be integrated over time, he said. The US Airways logo will not see wholesale changes, Gee said.

"Certain looks and things will be changed, not necessarily the logo but how things are put forth — signage . . . at the airport and things like that," he said.

"I don’t know how much of that has been determined yet, either. They’re in the process of doing that. It is a new airline."

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