American Airlines Merger Would Be Good for Texas – 6.15.12

Judge Clay Jenkins, contributing writer
Dallas Business Journal

From the first word of American Airlinesí filing for bankruptcy, most Texans have agreed that keeping American Airlines headquartered in DFW and saving Texas jobs are top priorities. Fortunately for us, there are increasing signs that such a plan is eminently doable.

To turn itself around, American Airlines has said it will need to shed about 14,000 employees ó and until recently, this future seemed inevitable. But now, with the opportunity for a merger to build a stronger DFW-based American Airlines, thousands of these jobs can be saved. Itís not surprising that the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union support American Airlines entering into merger talks with US Airways.

In a letter to employees, US Airways CEO Doug Parker indicated that a merger could save at least 6,200 jobs at American Airlines. In a state such as ours, where American Airlines employs more than 24,000 people, this matters. It matters to the men and women who go to work each day at Dallas/Fort Worth International Airport. It matters to pilots, flight attendants, mechanics and ground crews. And it matters to their families, who rely on them.

Parkerís memo was certainly the best news American employees have heard since before bankruptcy was declared.

Then, Americanís top managers announced that they had agreed with their creditors to look at ìpotential consolidation scenarios,î which means a merger. This is an important step in the right direction for our community.

For the 6.4 million residents in our area and the thousands of businesses that rely on airline travel, merging profitable US Airways with bankrupt American Airlines would bring together two complementary networks. American generates as much as $26 billion annually to the region. But its revenues have been declining for years, in part because its network of hubs and spokes has become outdated. Combining the assets of US Airways and American Airlines would result in a stronger, more competitive airline with fewer jobs lost, and greater opportunities for growth.

Fortunately for Texas, US Airways has promised that the merged airline will be known as American Airlines and remain headquartered at CentrePort. A merger would also restore our airline to its pre-eminent status in the industry.

Beyond a matter of pride, preserving American Airlinesí headquarters is essential to our stateís economy and to the North Texas residents and businesses that benefit from travel in and out of D/FW. Communities throughout Texas will also see greater connectivity and enhanced service from a merger. Currently, 780 American Airlines flights take off from D/FW each day. During peak travel times, the combined airline would offer 997 daily departures from Texas with nonstop flights to 174 destinations around the world.

I have watched with concern as other metropolitan communities, such as Atlanta and Houston, gained a strategic competitive advantage in attracting commercial activity as a result of expanded routes and services from the Delta-Northwest and United-Continental mergers. Now, American Airlines is no longer the first, second or even third choice for business travelers, a fact that would have seemed unimaginable 10 years ago.

I would encourage more local leaders to speak up for restoring American Airlines to the vibrant presence it once was.

Americanís recent change in tune should give Texans ó particularly North Texans ó the confidence to stand together in encouraging its management to enter into discussions with US Airways and any other suitors. American Airlines should pursue the path that protects the most jobs and creates the most economic potential and travel options for our friends and neighbors.

In doing so, American Airlines will seize its best opportunity to return to profitability and resume its rightful place as the worldís pre-eminent airline.

Clay Jenkins serves as Dallas County judge.