FOR IMMEDIATE RELEASE
Statement by Captain Steve
Chairman of the United Master Executive Council
Of the Air Line Pilots Association,
Regarding Speculation of Possible
Merger Between United Airlines
And US Airways
April 29, 2008
“Continental Airlines’ abandonment of merger discussions has produced intense media speculation that United Airlines is in final merger negotiations with US Airways. This speculation has created enormous concern among the pilots of United.
“United pilots share the market’s view that a merger with US Airways would be extremely negative from United’s perspective.
“While United has its own problems and issues—mostly created by management’s single-minded focus since bankruptcy exit on consolidation as opposed to the basic ‘blocking and tackling’ required to run a successful airline—US Airways’ problems run even deeper.
US Airways significantly trails other legacy carriers in generating cash flow from operations. In 2007, US Airways generated cash flow from operations of only 3.8 percent as contrasted to an average 9 percent for its peers.
In 2007, US Airways was alone with negative cash flow from operations less capital expenditures.
In basic operational performance, US Airways in 2007 ranked at or near the bottom among all legacy carriers in every measurable category: on-time arrivals, completion factor, mishandled bags and customer satisfaction—complaints are up 132 percent year over year alone.
JD Powers and Associates’ 2007 North America Airline Satisfaction Study and the 2007 Airline Quality Rating Study reflect similar results for US Airways. In the latter survey, US Airways went from first to last in overall airline performance over the last five years and has been worst of breed for the past four years.
“Much of this is a result of US Airways’ inability to achieve operational integration despite the fact that more than two and one-half years have elapsed since its merger with America West. Continued difficulties associated with pilot seniority integration are well chronicled. Even those reports grossly underestimate the complexity of seniority integration, which likely will not be solved without years of litigation. US Airways’ pilot integration problems have created a toxic stew, as any carrier that seeks to merge with it will quickly discover and one which in the current environment could imperil a United/US Airways combined enterprise.
“United should take a page from Continental, and turn its attention inward. United is the only carrier in the industry with no aircraft on order or optioned. That is not a long-term plan for survival. While United’s labor costs are among the lowest in the industry, its other costs excluding fuel and labor are among the highest, year over year.
“The United pilots have always been proactive in seeking creative solutions to problems. We have repeatedly demonstrated our ability to make the airline fly, despite management’s missteps. However, we do not view a marriage with US Airways as anything remotely resembling a solution.”