US Airways/America West merger
Even before the second bankruptcy filing of 2004, one of the alternatives US Airways Group explored was a possible merger with America West, as the two airlines had complementary networks and similar labor costs. The parties held preliminary discussions and conducted due diligence from February through July 2004. Ultimately, these talks ended due to issues related to labor, pension, and benefit costs.
By December 2004, US Airways had cut labor costs significantly. Its investment adviser, the Seabury Group, suggested putting the airline up for sale. The following month, US Airways Group and America West Holdings resumed their discussions. On May 19, 2005, both airlines officially announced the merger deal, structured as a reverse takeover. Financing for the deal was supplied by outside investors including Airbus, an aircraft manufacturing subsidiary of EADS, the European aerospace consortium. Air Wisconsin Airlines Corporation, operator of numerous US Airways Express flights, and ACE Aviation Holdings, the parent company of Air Canada, also bought shares in the combined airline. The merged airline retained the US Airways name to emphasize its national scope, as well as to capitalize on US Airways' worldwide recognition, Dividend Miles frequent flyer program, and Star Alliance membership. On September 13, 2005, America West shareholders voted to approve the merger agreement, and three days later the U.S. Bankruptcy Court for the Eastern District of Virginia approved US Airways' emergence from bankruptcy, allowing the merger to close on September 27.
Since the merger, US Airways has been headquartered at the former America West corporate offices in Tempe, Arizona, and America West executives and board members are largely in control of the merged company. The company's aircraft merged FAA operating certificate includes America West's airline call sign "CACTUS."
During 2006, the airline began consolidating its operations under the US Airways brand. Operations were not fully integrated until October 2008, when government approval was obtained to allow the airlines to operate under a single operating certificate.
On February 9, 2006, US Airways announced that it would become the first American "legacy" carrier to add the Embraer 190 to its mainline fleet.
In May 2006, the US Airways and America West web sites were merged. The new US Airways web site unites the two brands using graphics and styles reflective of the airline's new livery and services.
In July 2006, US Airways and America West ordered 20 new Airbus A350 aircraft.
The end of 2006 saw US Airways making a bid for competitor Delta Air Lines, which opposed this bid, treating it as a hostile takeover by US Airways. The final bid was valued at $10 billion but was withdrawn on January 31, 2007, since US Airways failed to secure backing from Delta's creditors. The airline has stated that it will no longer pursue a possible takeover of Delta.
Aircraft were equipped with Verizon Airfone in every row of seats. Since Verizon ended this service, the airline has deactivated the service and as of 2007, has removed the phones or has covered them in all aircraft.
Overnight on March 4, 2007, the US Airways and America West computer reservation systems merged. US Airways, which previously used the Sabre airline computer system, switched to the new QIK system, an overlay for the SHARES system, that had been used by America West. A few of the features from the Sabre system were incorporated into the new joint system, with the most prominent being the continued utilization of the Sabre ramp partition "DECS" for all computer functions related to weight and balance, aircraft loading and technical flight tracking within the company.
America West Airlines and the US Airways merged FAA certificates on September 25, 2007. Former America West employees (including pilots, fleet service personnel, flight attendants) remain on their original America West union contracts and did not fully combine work forces with their pre-merger US Airways counterparts. Until October 2008, former America West aircraft flew with their respective crews and used the call sign "CACTUS", while the pre-merger US Airways crews primarily flew with their respective aircraft and used the call sign "US AIR". In October 2008, the company began operating under a single operating certificate (that of the former US Airways.) This required operation under a single call sign, and that of America West ("CACTUS") was chosen. In addition, flights operated using former America West aircraft and crews are numbered 1-699, whereas flights operated by pre-merger US Airways aircraft and crews are numbered 700-1999. (Flights numbered 2000-2199 are shuttle services, and those 2200 and higher are operated by express subsidiaries.) Aircraft operated by pre-merger US Airways crews or former America West crews flew under two different United States Department of Transportation operating certificates until September 25, 2007. However, until pilot and flight attendant union groups from both sides successfully negotiate a single contract, each group of crewmembers will fly only on its pre-merger airlines' aircraft and the flights will be marked accordingly.
Now that the computer systems are merged, former America West-operated flights are marketed as though America West was a wholly owned carrier. This marketing is common practice for airlines that have code-share agreements with other airlines operating aircraft for feeder or regional routes, and although the practice is uncommon for major airlines, it greatly simplifies the process for passengers connecting between historically US Airways-operated flights and former America West-operated flights.
In summer 2007, US Airways began upgrading its in-flight services, from food and entertainment to the training of flight attendants. The airline was planning to test-market a new seat back entertainment system in early 2008, however the 2008 fuel crisis has ended those plans. As a further result of the skyrocketing fuel costs, the airline is now rolling back the planned summer 2007 service upgrades as well as ending its existing in-flight entertainment on all domestic routes.
A Consumer Reports survey of 23,000 readers in June 2007 ranked US Airways as the worst airline for customer satisfaction. The survey was conducted before the airline's March 2007 service disruptions. A follow-up survey polling a smaller sample size, conducted in April, found that US Airways remained in last place, with its score dropping an additional 10 points. Also in 2007, the Today/Zagat Airline Survey rated US Airways as the worst airline overall in the United States, ranking it 10/30 for comfort, 5/30 for food, 10/30 for service, and 15/30 for its online reservations system.
On August 1, 2008, US Airways ceased providing its passengers with complimentary beverages. Passengers were required to purchase bottled water or soda for $2 US, or $1 US for coffee and tea. However, the Shuttle flights between LGA, DCA, and BOS continued to offer free beverages. US Airways resumed serving complimentary drinks in March 2009.
US Airways ranked last out of 20 domestic airline carriers for systemwide on-time performance in March, April and May 2007, according to DOT figures. According to the Bureau of Transportation Statistics June 2008 report (using data from May 2008), US Airways ranked 7th for percentage of on-time arrivals.
US Airways is the leader in service complaints with 4.4 complaints per 100,000 customers. US Airways rate of customer complaints is 7.5 times the rate of JetBlue (0.59 complaints per 100,000 customers) and 11 times the rate of Southwest Airlines (0.4 complaints per 100,000 customers). US Airways has a very poor record of addressing customer complaints, answering only 50% of the telephone calls to its customer service department.
As of September 2007, US Airways continued to downgrade Pittsburgh International Airport's status from 500 flights a day (with 12,000 employees) in 2001 to just 68 flights a day (with only 1,800 employees). CEO Parker stated his frustration at the economics of Pittsburgh, and referred to the possibility of service further decreasing. This represents a further deterioration of a strained relationship with Allegheny County, with which the airline shares significant historical ties. US Airways Group Inc. said October 3, 2007 it would cut mainline flights at Pittsburgh International Airport to 22 a day from 31 and reduce regional flights to 46 a day from 77, beginning January 6, 2008, essentially reducing the airport to a destination spoke in its network. Pittsburgh is no longer a focus city for the airline as of its most recent annual report and January 2008 flight schedule reductions.
US Airways East pilots took steps to relinquish their ALPA membership and form their own in-house union. "East" pilots were dissatisfied with the results of binding arbitration when the arbitrator's ruling placed all active former America West pilots, including their most junior pilot, who had been hired only three months previous to the merger, ahead of furloughed US Airways pilots with up to seventeen years of service. The former US Airways pilots petitioned the National Mediation Board to conduct a vote to determine whether to replace their union. East pilots (3,200) outnumbered west pilots (1,800) and the proposed union's president stated that the union has a sufficient number of requests to call a vote according to National Mediation Board regulations. The new union would be called the US Airline Pilots Association (USAPA). On April 17, 2008, USAPA was voted in as the sole bargaining agent for the pilots of US Airways, East and West.
It took more than a year to correct problems stemming from the merger and by 2008, US Airways was one of the best performers among the legacy carriers. The carrier had the best departure and arrival performances among the other major US carriers. It finished with strong On-Time departure and On-Time arrival performances good enough to be number one among all major carriers. Northwest was the only other carrier that had better performances but became a part of Delta during that year.
On April 25, 2008, it was reported that US Airways was in talks to merge its operations with either American Airlines or United Airlines, partially as a response to the recent Delta Air Lines and Northwest Airlines merger. Then, on April 28, 2008, reports stated that US Airways would announce its intent to merge with United within two weeks. At the end of May 2008, the airline announced that merger talks were formally ended.
On May 20, 2008, according to the annual American Customer Satisfaction Index by the University of Michigan, US Airways ranked last in customer satisfaction among the major airlines. However, it was making steady ground to bridge its gap with other airlines.
On January 15, 2009, US Airways Flight 1549, under the command of Captain Chesley Sullenberger, flying from New York City's LaGuardia Airport to Charlotte Douglas International Airport ditched into the Hudson River shortly after takeoff. It is believed that "multiple bird hits" from a flock of Canada Geese caused both engines to lose power. All 150 passengers and 5 crew members (2 pilots and 3 flight attendants) survived with only minor injuries. New York's Governor Paterson called it "the miracle on the Hudson." President George W. Bush said he was "inspired by the skill and heroism of the flight crew", and he also praised the emergency responders and volunteers.
US Airways received its first Airbus A330-200 in June 2009.
In mid-2009 it was reported that US Airways, along with American Airlines and United Airlines was placed under credit watch. Experts say several factors, including capital and revenue, played a role in the airline's addition to the list. On October 2, US Airways reported that it had a buyer for 10 of its 25 Embraer 190 Aircraft. The remaining 15 aircraft are scheduled to be redeployed to Boston where they will operate Boston to Philadelphia and the Boston to New York LaGuardia leg of the US Airways Shuttle service. On December 8, US Airways started the flight to Rio de Janeiro-Galeão airport operated by a Boeing 767-200. This is the first route to South America.
US Airways cut many routes to close its focus cities at Las Vegas, Boston, and New York LaGuardia. The airline was given tentative government approval to trade many of its LaGuardia takeoff and landing slots to Delta Air Lines in exchange for Delta's slots at Washington National. This exchange would strengthen each airline's presence at both airports. The DOT gave approval pending the carriers selling a small percentage of their routes to other carriers. US Airways and Delta disagreed with the decision and said they planned to sue the US DOT.
On April 7, 2010, the New York Times reported that US Airways was "deep in merger discussions" with United Airlines. The report stated that a deal would not be reached for several weeks, but indicated that a deal was close. Several weeks later, however, on April 22, 2010, the airline ended discussions with United regarding the merger. Shortly thereafter, United announced that it was merging with Continental Airlines instead.
On August 19, 2010, US Airways announced "FastPath", a new complimentary service for travelers flying between Philadelphia and Boston in all classes of service. Perks include dedicated check-in lines, priority security lane (shared with First Class, Envoy, Dividend Miles Preferred and Star Alliance Gold members), departure gates located closest to security, and the first and closest baggage carousel. Travelers will follow green "FastPath" signs at the airport.
US Airways (NYSE:LCC) ranked first in baggage handling for 2010 among the major network carriers according to the U.S. Department of Transportation's (DOT) December 2010 Air Travel Consumer Report. The airline's 2.6 mishandled bags per 1,000 passengers ratio for 2010 was US Airways' best baggage handling performance in company history. However, J.D. Power ranked US Airways last in all categories for which it judged airlines, never giving it more than two out of five points with the exception of “Boarding Experience”
In April 2011, US Airways earned the top spot in the 2011 Airline Quality Rating (AQR) report among "Big-Five" hub-and-spoke carriers. US Airways President Scott Kirby said that US Airways was the last viable airline in the U.S. to merge, and that any potential merger would be with one of three U.S. carriers: United Airlines, American Airlines or Delta Air Lines. Kirby also commented that US Airways' membership in the Star Alliance would make a merger with United Airlines easier, but added that "it's not meaningful enough to really be a factor."
Among the 10 largest domestic airlines, consumers scored US Airways last for overall customer satisfaction in a May 2011 Consumer Reports survey.
May 2011 Business Insider reported that ACSI ranked US Airways sixth in a list of “The 19 Most Hated Companies in America.”
July 2011 the pilots' union, USAPA, purchased a full page advertisement in the USA Today newspaper, questioning US Airways management's commitment to safety. US Airways pilots allege safety breaches US Airways transmitted a communication to all of its employees, on the same day as the ad, denying the accusations.
September 2011, US Airways requested and was granted an injunction against the pilots, claiming the pilots union, USAPA was using their commitment to safety as a negotiating tactic. United States District Court, Western North Carolina, injunction regarding US Airways pilots.
October 29, 2011, a US Airways flight attendant was found murdered in the crew layover hotel in Mexico City. Mexican authorities are still investigating the circumstances of the murder.
In January 2012, US Airways expressed interest in taking over bankrupt carrier American Airlines. Tom Horton, CEO of American parent AMR Corporation, said in March that American was open to a merger. A Bloomberg News report dated March 23, 2012, stated that US Airways has been in talks with AMR's creditors about a takeover bid. On December 7, 2012, US Airways announced a merger proposal with American Airlines. The merger will still require approval from a bankruptcy judge but if the merger is successful, the combined airline will keep the American Airlines name and will be based in American's hometown of Fort Worth.
On February 14, 2013, US Airways and American Airlines announced that the two companies would merge to form the largest airline in the world. In the deal, which is expected to close in the third quarter of 2013, shareholders of American Airlines' parent AMR will own 72% of the new company and US Airways shareholders will own the remaining 28%. The combined airline will carry the American Airlines name and branding, while US Airways' management team, including CEO Doug Parker, will retain most operational management positions. The headquarters for the new airline will also be consolidated at American's current headquarters in Fort Worth, Texas.
Company affairs and identity
US Airways headquarters in Tempe, Arizona, formerly the America West Airlines headquarters
US Airways has its headquarters in Tempe, Arizona. The 225,000 square feet (20,900 m2) building was originally occupied by America West Airlines. Jahna Berry of the Arizona Business Gazette said in 2005 that the building "is one of the dominant buildings in downtown Tempe." The City of Tempe gave America West $11 million (about $15684769.29 when adjusted for inflation) in incentives and tax breaks so it would occupy what is now the US Airways headquarters, which cost $37 million (about $52757860.35 when adjusted for inflation) to construct. Construction of the building began in January 1998, although the official groundbreaking ceremony was held on February 19 of that year. As of 2006 over 700 employees work at the nine story building.
Previously US Airways had its headquarters in Crystal Park Four, a Class A mixed-use development in Crystal City, Virginia, near Arlington. Park Four is between Reagan National Airport, The Pentagon, and the District of Columbia. After the merger with America West Airlines, the company decided to close its Virginia headquarters and moved the employees into the former America West building in three to six months after the merger closed. Russell Grantham at the Atlanta Journal-Constitution said that the decision to move the headquarters to Tempe was not that difficult because the Crystal City facility "consisted of like two or three floors of people.