usairways

How will airline merger impact Arizona?

The potential merger of US Airways and American Airways raised fears in Arizona that the combined airline would ditch its major hub in Phoenix, costing thousands of jobs in a region just now recovering from the housing collapse and recession that crippled the economy for years.

But when the merger was announced Thursday, city and airline officials both said those worries were overblown.

US Airways CEO Doug Parker said Sky Harbor International Airport and the vast majority of the employees based there aren’t going anywhere when the two companies merge. Instead, he said not only Sky Harbor, but the combined airlines’ seven other major hubs will stay.

That brought elation from officials in Phoenix, where 300 US Airways flights a day use 50 gates at the airport’s largest terminal. US Airways has about 9,000 employees in Arizona, most at Sky Harbor. Between 600-750 work at the company’s headquarters in nearby Tempe, and some of those are expected to go to Texas once the merger is complete, including Parker.

But John McDonald, the company’s vice president for corporate communications, said US Airways just signed a new five-year lease with a five-year option on its headquarters building and expects to keep hundreds of people working there.

American has a tiny presence by comparison, with just 20 departures a day using three gates in the smaller Terminal 3. Those operations will most likely move to the US Airways area of Terminal 4 when the merger is complete, airport spokeswoman Deborah Ostreicher said.

Still, the loss of the headquarters is a blow, Phoenix Mayor Greg Stanton said, even though the city will see more international destinations added with the merger.

“It’s great news that the world’s largest airline will maintain Sky Harbor and Phoenix, Arizona as a hub. It good news for the business environment in our entire region,” Stanton told reporters at the airport. “But we’re not naive, we’re not naive, we know it’s disappointing to lose a corporate headquarters, particularly one that has the history of US Airways and before that America West. We went through the 90s together, we went through Sept. 11 together. Phoenix was a big part of the recovery of America West after that tragedy.”

America West Airlines, headed by Parker, merged with US Airways in 2005 and kept its corporate headquarters in Tempe. The company has struggled with combining its labor contracts, but McDonald said that’s never been something that affected customer service. That, he said, has become better, with better on-time and lower baggage loss rates.

Some airline analysts questioned Thursday whether the combined company could keep all eight hubs, placing Phoenix on the short list for eventual closure. But McDonald said that’s not the case, American’s Los Angeles hub complements Phoenix, just as several hubs in the eastern U.S. complement each other.

“When you have an airport like Phoenix that can have a massive western region to feed, out of Phoenix, you have an asset to bring to this equation,” McDonald said. “American Airlines has a lot of trans-continental out of Los Angeles, they also operate some Asian Pacific out of Los Angeles, with very little West coast feed into that hub.”

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