July 18, 2012
International Airlines Group (IAG) CEO Willie Walsh has acknowledged that US Airways’ proposed merger with AMR Corp. has some merit, and that regardless of how its Oneworld partner emerges from this latest round of consolidation the resulting entity will benefit the global alliance.
Speaking at the International Aviation Club of Washington (IAC) July 17, Walsh also endorsed AMR’s management decision to restructure under the protection granted by Chapter 11 bankruptcy laws and last week’s announcement by CEO Thomas Horton that he would consider some form of consolidation in parallel to his established standalone plan.
The timing of this tacit approval of US Airways’ plan is fortuitous for the Tempe, Ariz.-based airline’s CEO, Doug Parker, who is preparing to address his own Washington audience on July 18 to promote his merger plan. “I have to give credit to Doug Parker,” Walsh told the IAC. “He’s played this well.”
When questioned by media, Walsh said US Airways’ plan “has some merit,” and noted that the two U.S. airlines have complementary route structures and a potentially strong presence on the East Coast.
Walsh’s acknowledgment of Parker’s plan will be welcomed by US Airways, as the airline’s pitch, in part, aims to convince IAG that the merger will provide access and feed along the East Coast through four major hubs that AMR could never provide through its standalone reorganization plan. US Airways’ proposal also retains AMR’s membership in Oneworld and adds a network currently affiliated with Star Alliance.
“It’s not for me to say if American [Airlines] and US Airways should merge,” Walsh said. “But if a merger happens, its natural place would be in Oneworld.”
A merger also would be unlikely to affect IAG’s joint venture with American. “We would be supportive of any option that strengthens [American], our partnership and the Oneworld alliance.”
But Walsh gave Horton’s plan equal weight. “There is merit in Tom’s case,” said Walsh. Horton maintains that AMR should emerge from bankruptcy before it considers merging with another airline.
This makes sense to Walsh, who noted that mergers in the airline industry typically occur after a carrier emerges from bankruptcy.