American’s oneworld partner says there is “merit” to a merger with US Airways 7.17.12

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By Dave Michaels/Reporter
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2:31 pm on July 17, 2012

American’s oneworld partner says there is “merit” to a merger with US Airways

Speaking Tuesday in Washington, the CEO of International Airlines Group, which owns British Airways, complimented US Airways’ pursuit of a merger with American and said there was “merit” to the combination.

“There will be consolidation,” Walsh told reporters after his speech to the Washington International Aviation Club. “I can see merit in that argument given the network that US Airways has, which I think complements the American network.”

Walsh, whose company operates the oneworld alliance with American, said American will emerge from bankruptcy as a stronger, more competitive company — regardless of the outcome of merger discussions with US Airways or others.

But Walsh noted that American CEO Tom Horton’s comments last week indicated that US Airways CEO Douglas Parker has made progress in raising the issue.

“You have to give credit to Doug because he’s got it on the agenda,” Walsh said in an interview after the speech. “Six months ago, l don’t think anyone thought that was a possibility. Tom last week saying they are looking at consolidation opportunities demonstrates that Doug has been very effective.”

Walsh said British Airways would consider making an investment in American Airlines “if they would welcome that.” U.S. law limits foreign investors to owing up to 25 percent of the voting shares of a U.S.-based airline.

“If it was something that American welcomed and thought was strategically valuable to them, then it is something that we would consider doing,” he said.

While Walsh said during his speech that future rounds of airline M&A should aim for global consolidation, most U.S. policy experts believe it would be very difficult to change U.S. law to allow foreign control of U.S.-based airlines.