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Analysts explain why US Airways’ CEO would be a better leader post-American Airlines merger

Feb 01, 2013 8:29 am

Skift Take

Despite making some decent gains during the restructuring process, nobody — from creditors, to analysts, to board members, to non-executive employees — wants him to stick around post-merger. What does that say about the culture he’s created at AA?

— Jason Clampet

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Investors will get more value from a combination of American Airlines and US Airways if US Airways Chief Executive Doug Parker is at the helm, Wall Street analysts said Wednesday.

Analysts pointed to the Arizona-based airline’s strong fourth-quarter financial results as one reason why Parker — not American CEO Tom Horton — should control the merged company.

“We continue to believe that the US Airways team has clearly demonstrated an ability to handle a complex merger and create value for shareholders and expect it to do it again in its potential merger with AMR,” said Bob McAdoo, an analyst at Imperial Capital.

Management is one of the issues being discussed as the companies mull a merger.

AMR’s board was meeting on the issue this week, and The Wall Street Journal reported Tuesday that Horton was in talks to stay on as chairman if a merger occurs.

Some analysts have questioned American management’s plan to increase capacity by 20 percent in the next five years after the company emerges from bankruptcy.

That could hurt the entire industry and bring all airline stocks down in value.

“We’ve had a hard time finding investors in favor of AMR management, hence our conclusion is that a consensus is in favor of a US Airways-led management team running the merged airline,” Dan McKenzie, an analyst with Buckingham Research Group, told investors in a research note published Wednesday.

He said the American management team’s relationship with its unions will likely remain contentious if Horton stays as a top executive.

Both the Allied Pilots Association and the Association of Professional Flight Attendants declined to comment on rumors about who may head the new carrier.

However, the unions have been vocal in their opposition to Horton in the past. In February, leaders of both unions marched to American’s headquarters on Amon Carter Boulevard in Fort Worth to deliver a “no confidence” petition signed by 18,700 pilots and flight attendants.

“We need new leadership, new direction, a new game plan,” attendants union President Laura Glading told the Star-Telegram Editorial Board in June when she joined other union leaders and Parker to discuss their support for a possible merger.

(c)2013 Fort Worth Star-Telegram. Distributed by MCT Information Services.

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