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GHOST OF AIRLINE CHAOS STILL TO COME
By Joe Brancatelli
December 27, 2012 -- I have no problem with scribes plumbing the ghost of business-travel past for a column. After all, I autopsy seven mostly dead carriers in this week's Seat 2B column.
But if you stroll down the airline industry's metaphoric memory lane, you should tell the truth. That's something Ted Reed assiduously avoids during an interview with Ed Colodny, architect of many of US Airways' mergers.
The Frankenstein airline that started life as All American Aviation and now contains parts of nearly a dozen other carriers has never been particularly good or particularly well-loved by flyers. And the truth about the mergers and acquisitions that Colodny and others completed at US Airways in the past is that they make a prima facie case against any combination with American Airlines in 2013.
By the time it gobbled up Mohawk Airlines in 1971, All American, now called Allegheny Airlines, had been dubbed "Agony Airlines" by unhappy flyers in the Northeast. Allegheny entered the deregulated era of the late 1970s as a profitable, but much loathed, entity. Colodny changed the carrier's name to USAir in 1979 to try to outrun the past and show his intent to outgrow Allegheny's eastern roots.
When USAir cut a deal to purchase Pacific Southwest Airlines (PSA) in December, 1986, Colodny's stated goal was to bulk up. The USAir mantra then was the US Airways mantra now: We have to get bigger to compete. The problem? PSA was as much loved in the California Corridor as US Air was disliked in the East. Besides, there was virtually no logic in grafting PSA onto USAir. USAir flew in the East, PSA in the west and the twain, culturally as well as aeronautically, never met. Within a few years, USAir had been driven off all of PSA's old routes by Southwest Airlines.
Colodny's next merger was far worse. He picked off Piedmont Airlines, one of the best U.S. carriers ever. Folks loved Piedmont for everything from its morning snacks of Krispy Kreme doughnuts to its practice of serving you the entire can of your chosen soft drink. Piedmont created the Charlotte hub that is now the largest in the current US Airways system.
As is only hinted at in Reed's piece, Colodny imposed USAir's management style on Piedmont and it didn't go well at all. In fact, USAir beclowned itself on matters as small as beverage service. After the merger, USAir refused to serve travelers an entire can of soda. Former Piedmont flyers revolted and USAir, at least for a while, went back to the full-can service.
But it was USAir's fumble on the big things that destroyed most of the value of the Piedmont merger. US Air summarily closed Piedmont's Dayton hub, which aviation experts worldwide had declared the model of a good, mid-sized hub. It began downsizing Piedmont's Baltimore-Washington hub at the first sign of Southwest Airlines' arrival in 1993.
It also destroyed Piedmont's profitable intra-Florida flight network and, again, Southwest Airlines was there to pick up the pieces. Worse, USAir moved Piedmont's Florida fleet, mostly Fokker 28 aircraft, to the Northeast. The planes weren't suited for bad-weather flying and one former Piedmont Fokker, operating as USAir Flight 405, crashed on takeoff at LaGuardia Airport. Twenty-seven people died on that icy New York morning in March, 1992.
As years passed, US Airways got bigger by picking up Midway Airlines' Philadelphia hub, which had once belonged to Eastern Airlines. It eventually snapped up the Trump Shuttle, which had once been the Eastern Airlines Shuttle between Boston, New York and Washington. And at every step along the way, USAir said it had to get bigger or die.
The buccaneer Steve Wolf eventually replaced Colodny's successor as chief executive. He changed the name to US Airways and tried to merge it into United Airlines in 2000. Why? Besides an obscene payout for himself, he claimed that US Airways was too small to survive. When the merger failed, it turned out that Wolf had no Plan B.
Which brings us to today, more than seven years since the merger of US Airways into America West. Doug Parker, the current boss, is a lot like Colodny. He's never seen a merger he didn't want to do.
He tried to get control of Delta Air Lines in 2006 and failed. He tried to merge with United Airlines in 2008 and failed. Since April, he's been trying to do a deal with bankrupt American. Why? Because US Airways, after all of the mergers, still isn't big enough to survive.
I don't know about that, but I can tell you this: The more you look at a US Airways-American merger, the less there is to like.
The supposed synergy of the respective route maps? Not so much. Charlotte is a good enough hub, but not as dynamic as it was now that Charlotte's banking sector has shrunk. How do you balance US Airways' Philadelphia hub, its largest international gateway, and American's New York/Kennedy hub? How does US Airways' Phoenix hub fit with American's hub in Los Angeles?
The fleets aren't compatible, either. All but about 80 of US Airways' 340 mainline jets are Airbus. It has ordered some Airbus planes, but American's current mainline fleet is totally Boeing.
Then there's the bugaboo of all airline mergers: the culture and labor unions. American has rammed two rounds of concessionary contracts down the throats of its major unions in the past decade. The atmosphere is toxic. Yet American's labor situation is paradise compared to US Airways. Seven years on, neither pilots nor flight attendants have successfully done a contract with the merged US Airways. Combining all of these disparate groups--not to mention a dissident cadre of former TWA pilots at American Airlines--would be a nightmare.
If the ghost of mergers past at US Airways tells us anything, it's that they never work out nearly as well as Colodny and his successors claimed they would. The ghost of mergers past at American (Reno Air, Air Cal, TWA) is Dickensian, too.
And the ghosts of airlines past all too often are the ghosts of airline chaos still to come.
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ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2012 by Joe Brancatelli. JoeSentMe.com is Copyright © 2012 by Joe Brancatelli. All rights reserved.