The new American Airlines- Creating A Giant- the story in video and photos

The new American Airlines- Creating A Giant
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US Airways-American Airlines $11B Merger: A Signal That Big Airline Deals Could End

Forbes

The creation of America’s largest airline further condenses an already consolidated industry and might conclude an end to this era’s bold-faced deals.

American Airlines will merge with US Airways in a $11 billion deal, unanimously approved by the companies’ boards. It works to widen American’s presence in the Lower 48, especially in the Northeast, and it creates a airline that can take on United Airlines and Delta Air Lines. (Worth noting: United and Delta grew rapidly in recent years from deals and mergers just like this. Delta getting hitched to Northwest Airlines, United to Continental.) All told, the new American will have more than 100 million frequent fliers, with more 6,700 daily flights to more than 50 countries.
All the deal flow in this industry helped airlines improve their health and profitability. That said, big, headline-grabbing deals between U.S. airlines could go the way of free checked bags. “I think if you look around the fringes, you might still see some,” says Morningstar analyst Basili Alukos.

Two airlines regularly pop up as speculative take-over targets.

First, there’s Alaska Airlines. That company easily dominates travel to the Last Frontier, and has substantial operations throughout the northwest. It’s already established a fairly close relationship with Delta, including a decision last October to bulk up service from Seattle.

Consider JetBlue, too. It’s smaller than Alaska Airlines–almost half the size, in fact, by market cap. One of its co-founders, serial entrepreneur David Neeleman, is out and already hard at work on another airline. American made a pass at it earlier this year, and CEO David Barger, the other founder, rebuffed it. Barger said JetBlue’s growth was more focused on growing at Washington’s Reagan National and in Puerto Rico.

Barger has continually expressed firm resistance toward any deal, despite attempts to keep JetBlue up in the air as a takeover target. Making any more big deals as unlikely as an end to runway delays.

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Video: ABC News -What the American US Airways merge means

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Video: The new American Airlines

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American Airlines future hubs

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Brief timeline -Creating the new American Airlines
Video: American Airlines-TWA Merger

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Video: American Airlines and TWA

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Video: America West -US Airways Merger

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Before there was US Airways there were Piedmont Airlines and USAir

Video: Piedmont Airlines commercial before merger with USAir

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Video: Piedmont Airlines once the fastest growing airlines

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Video: Piedmont Airlines’ largest hub was Charlotte Douglas International Airport

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Video: Allegheny Airlines renames itself USAir
Allegheny Airlines/USAir were based out of Pittsburgh

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Video: USAir commercial before merger with Piedmont

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The airlines that are now American Airlines

American Airlines

US Airways

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A timeline of events in American Airlines’ history

Sources: Associated Press, American Airlines and others

1930: American Airways Inc., is incorporated. The name changes to American Airlines Inc. in 1934.

1934: Dallas becomes a major hub for air-mail distribution as national air carrier Braniff Airways wins a service contract for a Dallas-Chicago route.

1937: American carries its one-millionth passenger.

1939: The company’s shares begin trading on the New York Stock Exchange.

1945: Flights to Europe begin under the American Overseas Airlines brand. AOA later merged with Pan Am.

1948: The airline offers scheduled coach service at lower prices than first-class.

1953: American began nonstop, coast-to-coast flights on the Douglas DC-7.

1959: American offers transcontinental jet service on the Boeing 707.

1969: Dallas-Fort Worth Airport initial phase of construction begins for a new regional airport.

1971: Dallas-Fort Worth Airport construction begins on the first terminal, 2W.

1972: Dallas-Fort Worth Airport runway construction starts.

1974: Dallas-Fort Worth Regional Airport (now International), first opened to traffic a few minutes past midnight on January 13, 1974- jointly owned by the cities of Dallas and Fort Worth and operated by the DFW Airport Board.

1977: American introduces the “Super Saver” fare.

1978: Airline Deregulation Act of 1978 is approved, allowing airlines to adopt new routes and more competitive rate structures.

1979: The airline moves its headquarters from New York City to Fort Worth, Texas.

1981: American established its Dallas-Fort Worth hub on  June 11. Later American added new cities and new routes to strengthen its hub-and-spoke networks.

1981: The AAdvantage frequent-flier program is born and eventually becomes the model for loyalty plans at other big airlines.

1982: Braniff International Airways shuts down its major hub at Dallas-Fort Worth International Airport.

May 21, 1982
Airport Seeks Braniff Eviction
New York Times
DALLAS— The governing board of the Dallas-Fort Worth Regional Airport voted to ask a Federal bankruptcy judge for permission to evict Braniff International from its airport facilities and headquarters building.
”We need the right to generate revenue,” the airport’s executive director, Ernest Dean, said after a closed meeting of the airport board’s committee.
Braniff the nation’s 8th-largest airline, ceased operations on May 12, and filed for Chapter 11 reorganization in Federal Bankruptcy Court in Fort Worth early the next day.

1982: Shareholders approve a reorganization plan that creates parent AMR Corp.

1984: on March 1, 1984 ‘New’ Braniff’s Big Start-Up
Associated Press
GRAPEVINE, Tex.— Braniff Inc. emerged from bankruptcy today, beginning service to 18 markets in the largest one-day start-up in aviation history.
After a dawn champagne celebration, Jack Murdock, pilot of Flight 200, gave a thumbs-up sign from the cockpit and his plane rolled toward a runway at the Dallas-Fort Worth Regional Airport.
The old Braniff International suspended service on May 12, 1982, with $1 billion in debts. It reorganized in bankruptcy court with a $70 million infusion from the Hyatt Corporation as a leaner carrier that analysts say is better equipped to compete. Once the nation’s 8th- largest airline, Braniff is now one-third its previous size and has 2,200 employees.
Hyatt’s chairman, Jay A. Pritzker, standing on the airport apron as some of Braniff’s 30 Boeing 727’s taxied by, said he expects the airline to begin making a profit in the second half of its second year. But the resurrected carrier faces tough competition from American Airlines, which is larger and flies many of the same routes. Braniff also must win over travelers, some of whom were stranded when it shut down.

1985: Robert L. Crandall becomes chairman and CEO.
American Airlines began service at Raleigh-Durham International Airport.

1985: American Airlines began  service at Raleigh-Durham International Airport.
American Airlines said Tuesday it will spend more than $60 million to create a new regional hub at Raleigh-Durham Airport that is expected to involve 175 flights a day to 53 cities. The airline said at a news conference a new terminal to accommodate the hub operation should be completed by July 1987. When in full operation, the hub for north-south routes will create 1,275 jobs. American currently has 4 flights a day at RDU and 15 employees. RDU was selected largely because of capacity for increased landings and takeoffs afforded by the new 10,000 parallel runway.

1986: On Nov. 17 American Airlines announced it would pay $225 million to acquire a low-cost carrier AirCal to give American the routes, airplanes and California base it needed.

1986: American Airlines opens new hub at Nashville International Airport. American Airlines developed a hub in Nashville to serve as a base of operations for expanded service in the eastern half of the United States. American’s current hubs, in Chicago and Dallas-Ft. Worth, primarily serve east-west routes, said Thomas Plaskett, the airline`s senior vice president of marketing, and the expanded Nashville operation “will let us compete for a substantial amount of airline traffic that flows north and south in the eastern half of the country.” The move will allow American to invade markets now served primarily by three other airlines: Delta, Eastern and Piedmont. The major part of the $115 million will be spent to build a 15-gate concourse, which is scheduled for completion by late 1987. The number of daily flights is expected to rise to between 75 and 85 by that time, increasing to 135 by 1990. The concourse will be designed so it can be expanded, Plaskett said. He added that American still intends to develop Denver as a hub for north-south routes in the western half of the country. However, airline officials decided to proceed with Nashville first because of plans to build a new airport in Denver.

1986: American Airlines opens new hub at San Juan-Luis Muñoz Marín International Airport, Puerto Rico.

1987: American Airlines opened the new Terminal C complex at Raleigh-Durham International Airport for its north-south hub operation.

1988: American Airlines opened new west coast hub operation at San Jose Mineta San José International Airport. 1988: American Airlines West Coast hub at San Jose International Airport, used gates it obtained in the buyout of AirCal in 1986 creating a new connecting hub in San Jose.

1988: American’s reservations office opened in Raleigh/Durham, N.C.  Raleigh-Durham International Airport now has 120 daily flights on American.

1989: American opened its 7th hub in Miami International Airport on Sept. 13.

1991: American carries its one-billionth passenger.

1991: Eastern Air Lines ceased operations closing its Miami hub and its Latin American routes.

1992: American Airlines’ ambitious growth plan launched in 1983 saw American go from 244 aircraft that year to 672.

1993: American Airlines closed its west coast hub operation at San Jose Mineta San José International Airport.

1994: American Airlines begins service from Raleigh-Durham International Airport to London

1995: American Airlines ceased its hub operations at Nashville International Airport.

1995: On January 24 American Airlines announced that it will eliminate its hub at the Raleigh-Durham International Airport due to increased competition and unprofitable flights. Starting June 15, 1995 American will provide only 7 flights out of RDU each day. American has been planning to dismantle its hub since the fall of 1993, when the company began evaluating the revenues it generated at the RDU hub, said Tim Smith, a spokesperson for American. “We wanted to weed out unprofitable flights and, in the process, make the hub more profitable,” Smith said. Competitors’ hubs in Charlotte, Atlanta and Greensboro reduced American’s traffic from RDU. Continental Airlines’ gradual service increases at the Greensboro airport also dealt major blows to American Airlines at RDU. Continental first increased its daily service out of Greensboro from 3 flights to 19 in October 1993, said Katherine Birdsong, marketing manager at Continental. Continental now offers 74 daily flights from Greensboro, and will increase this number to 100 on March 1, 1995 when Greensboro will be designated an official Continental hub. Midway Airlines will sublease 7 gates in RDU’s Terminal C from American.

1996: American Airlines officially ceased its hub operations at Raleigh-Durham International Airport and shifted operations to Miami International Airport.

1998: Crandall retires and is succeeded by Donald J. Carty.

1998: American acquires low-cost Reno Air; pilots later conduct a costly sickout in protest. Reno Air merger is used to build up the American Airlines system in the western United States.

1999: American began an expansion of its West Coast service, and American Eagle opened a new terminal in Los Angeles International Airport (LAX).

2001: American acquires assets of bankrupt TWA; the deal eventually leaves American saddled with old planes and too many employees.

2001: American Airlines said the addition of TWA would give it an important new hub in St. Louis and improve its position as an east-west carrier.

On Sept. 11, two American Airlines jets and two United Airlines jets are hijacked by terrorists and crash.

2001: American announced that it will accelerate construction of its new $1.3 billion terminal at New York’s JFK Airport, advancing the completion date nine months to September 2006.

2002: American officially dedicated its $300 million improvement project at Los Angeles International Airport’s Terminal 4, culminating four years of work on what was the largest project of its type ever undertaken by a single carrier at LAX.

2003: With the company on the brink of bankruptcy, Gerard J. Arpey replaces Carty as CEO; labor unions approve cost-cutting contracts that let AMR avert bankruptcy.

2005: Delta Airlines closes its 2nd largest hub at Dallas-Fort Worth International Airport. American began operating from the new 2.1-million-square-foot International Terminal D at DFW.

2007: American moved its international service at New York’s Kennedy International Airport into Concourse B of its new $1.3 billion JFK terminal.

2008: American fails to reach new contracts with union employees, who continue to work under terms of previous agreements.

2008: American relocated its operations at Raleigh/Durham International Airport into the airport’s new Terminal 2 complex. American has been serving RDU since 1985 even after they closed their hub operations in the 1990s.

2009: American announces “cornerstone” strategy of focusing on five big U.S. markets — Dallas-Fort Worth, Chicago, Miami, New York and Los Angeles — while downplaying others.

2009: Lambert–St. Louis International Airport lost its status as an American hub in 2009. St. Louis the largest hub for TWA.

2010: American Airlines closed the Kansas City maintenance base. The Kansas City base, which was a Trans World Airlines base before American Airlines bought TWA in 2001, has existed for more than 50 years, helping spur the development of the Northland.

2010: AMR reports a loss of $471 million, bringing total losses since 2001 to more than $10 billion.

2011: AMR, American Airlines and other subsidiaries file for bankruptcy protection on Nov. 29, a day after Arpey retires and is replaced by Thomas W. Horton.

Feb. 1, 2012: American tells workers that it plans to cut 13,000 union jobs, mostly in the maintenance division; the number is later reduced sharply.

April 20, 2012: US Airways announces that it has reached labor agreements with all three of American’s unions on contracts that would take effect in case the two airlines merge.

June 2012: American Airlines closes hub at San Juan-Luis Muñoz Marín International Airport, Puerto Rico.

July 10, 2012: Horton, who had resisted US Airways’ merger overtures, says AMR has made enough turnaround progress to now consider merger options.

Aug. 31, 2012: American announces that it has signed an agreement to exchange confidential financial information with US Airways so that the two can study a potential merger.

Sept. 4, 2012: A federal bankruptcy judge reverses his earlier ruling and lets American cut pay and benefits for pilots, who had rejected the company’s last contract offer. The decision is followed by a surge in canceled and delayed flights, which American blames on an illegal work slowdown by pilots.

Oct. 2, 2012: American and the Alllied Pilots Association agree to resume contract talks; all other union groups have accepted cost-cutting contracts.

Feb. 13, 2013: The boards of American and US Airways approve a merger creating the world’s biggest airline.
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A timeline of events in US Airways’ (US Air/Piedmont/PSA/America West Airlines) history

1939: All American Aviation brings the first airmail service to many small western Pennsylvania and Ohio Valley communities with introduction of a unique ‘flying post office’ service.

1948: Piedmont Airlines begins operations.

1949: All American Aviation becomes All American Airways and makes the transition from airmail to passenger service with introduction of the DC-3 and an expansion of its service. Pacific Southwest Airlines (PSA) begins operations with service in California.

1953: All American’s route system grows and the name is changed to Allegheny Airlines, recognizing the mountains and river of the same name that lie in the heart of the airline’s network.

1965: Allegheny Airlines begins the transition to turbine-powered aircraft with introduction of the first Convair 580, its workhorse for the next several years.

1966: The first jet, a DC9-10, makes its debut in Allegheny colors. It is replaced the following year by the first of what would eventually become a fleet of 62 larger DC9-30 jets.

1967: The first Allegheny Commuter service begins, between Hagerstown, MD and Baltimore/Washington International Airport by Henson Aviation, forerunner of today’s Piedmont Airlines. It was the beginning of today’s network of 10 regional airlines that provide US Airways Express service to 172 cities throughout the nation.

1968: Allegheny merges with Indianapolis-based Lake Central Airlines, expanding the growing route network beyond Pittsburgh to the Midwest including Dayton, Columbus and Cincinnati, OH; Indianapolis, IN; and St. Louis, MO.

1972: Allegheny acquires Mohawk Airlines, a Utica, NY airline with service to most cities throughout New York and New England. With the merger, Allegheny acquired Mohawk’s BAC-1-11 jets to complement its DC9s and becomes the sixth largest airline in the world as measured by passenger boardings.

1978: Deregulation comes to the U.S. airline industry. Airlines have new freedom to expand their route systems and more flexibility to develop new and innovative pricing structures, but lose the protection of the fare- and route-setting authorities exercised by the Civil Aeronautics Board, which closes down by 1984.

1979: Allegheny changes its name to USAir to reflect its expanding network, including post-deregulation entry into Arizona, Texas, Colorado, Florida and later, California.

1983: America West Airlines begins operations in Phoenix on August 1 with 230 employees and three 737s, serving Colorado Springs, CO; Kansas City, KS; Los Angeles, CA; and Wichita, KS. The airline’s schedule calls for 20 daily departures.

1984: USAir introduces its Frequent Traveler program, which provides travel benefits to USAir’s most loyal customers.

1986: Piedmont acquires Empire Airlines and its Syracuse, NY hub.

1987: Large-scale airline consolidation, a partial product of deregulation, continues. Piedmont introduces European routes in its system. Competition for the lucrative California market intensifies as local carriers are bought and merged into larger partners. Pacific Southwest Airlines of San Diego becomes a wholly-owned subsidiary of USAir Group in May. Piedmont Airlines, the dominant carrier throughout the mid-Atlantic region of the United States, also becomes a subsidiary of USAir Group in November 1987.

1988: PSA is merged into USAir.

1989: Piedmont is integrated into USAir, the largest merger in airline history. The merger brings with it Piedmont’s international routes as well as its Charlotte, Baltimore, Dayton and Syracuse hubs. Baltimore and Charlotte remain hubs. The merger also brings USAir’s first wide body jets, the Boeing 767-200ERs now used on its transatlantic and some transcontinental routes.

1990: USAir expands its international flying with service between Pittsburgh and Frankfurt, Germany, complementing existing Charlotte-London service begun in 1987 by Piedmont; and in 1991, international expansion continues with the introduction of new nonstops between Charlotte and Frankfurt.

1992: Philadelphia-Paris is added to USAir’s transatlantic schedules in January. Daily nonstops between both Philadelphia and Baltimore/Washington International Airport and London Gatwick Airport are introduced in May. USAir and Trump Shuttle begin a marketing affiliation under which the service becomes the USAir Shuttle. The Shuttle provides hourly service between New York and Boston and between New York and Washington, DC. USAir’s new terminal at New York LaGuardia opens, as does the new Midfield Terminal at Pittsburgh International Airport.

1993: USAir and British Airways announce an investment/alliance plan, under which USAir gives up its London route authority.

1994: USAir makes its largest expansion ever of its 10-year-old Frequent Traveler Program by becoming the exclusive U.S. domestic airline partner of LatinPass, which has 14 Latin American airlines sharing program benefits.

1995: USAir posts its first profitable year since 1988, with earnings of $119.3 million on sales of $7.474 billion. USAir introduces Priority TravelWorksSM, allowing bookings from personal computers.

1996: Stephen M. Wolf is elected chairman effective January 22. Seth E. Schofield retires as chairman after 38 years’ service to the company and three and a half years and chief executive. USAir continues its transatlantic expansion, winning the right to serve Munich, Rome and Madrid from Philadelphia beginning in 1996. USAir introduces ticketless travel. USAir, in a dramatic two-week period, announces what might in time be the largest single order for airliners; then announces a new name, image, identity designed to carry the airline aggressively into the next century. The airline ordered up to 400 new Airbus A319, A320 and A321 narrowbody twin jets for delivery starting in 1998 and continuing through 2009; then within days announced its new identity as US Airways. The airline challenged its relationship with British Airways in court, seeking rights to London Heathrow from four U.S. gateways and to require British Airways to dispose of its USAir stock. USAir notifies BA the codeshare between the two will end in March, 1997, and in December, British Airways announces it will sell its shares in USAir and that its three directors will resign.

1997: The name US Airways is put into use officially on February 27. Signs, stationery, ticket stock, business cards, advertisements, marketing materials, ticket folders and counters all start to sport the new US Airways blue, red, gray and white identity, and the first aircraft are painted in the new scheme as the changeover approaches. The US-BA codeshare expires in March.

1998: US Airways Inc., purchased Shuttle Inc., from a consortium of banks. The Shuttle has flown under the US Airways name since 1992, when US Airways became an investor in the Shuttle with a minority ownership stake. US Airways Shuttle flies 17 daily roundtrips between Boston and New York LaGuardia, and 16 daily roundtrips between New York LaGuardia and Washington Reagan. US Airways introduces Personal TravelWorks, an online travel reservation system. MetroJet by US Airways starts service, providing the airline with a low-fare unit to compete in the eastern United States. MetroJet’s single-class, using Boeing 737-200 aircraft, proves highly popular. US Airways Express introduces regional jets to its system. US Airways fleet transformation begins with the introduction of the first of as many as 400 Airbus A320-family aircraft.

1999: US Airways first Airbus A320 aircraft enters service with scheduled daily flights between Philadelphia and Los Angeles. The new 142-seat A320 is part of the US Airways plan to simplify and modernize the fleet by adding Airbus A319, A320 and A330-300 aircraft. US Airways expands its international route network by adding nonstop service between its Charlotte, NC hub and London Gatwick. Charlotte becomes the third US Airways transatlantic gateway. Colgan Air, Inc. joins the US Airways Express nine-carrier network, expanding service to destinations across the East Coast from Bar Harbor, ME to Atlanta, GA. The Sabre system becomes the platform for the majority of US Airways’ computer operations, giving the airline the most modern computer technologies available and Y2K readiness. The fleet transformation continues with A320-family aircraft arriving at a rate of one per week in the second half of the year. The US Airways Shuttle begins its transformation to an all A320 fleet, retiring the venerable Boeing 727s.

2000: US Airways unveils its enhanced and redeveloped website, usairways.com, originally launched in 1996, offering customer-friendly features that include a streamlined process for checking fares, making reservations, purchasing tickets, checking flight status and accessing Dividend Miles account information. The site begins drawing more than 600,000 visitors a week. US Airways begins service to its eighth European destination with the introduction of Philadelphia-Manchester, UK service. US Airways opens an international reservations center in Liverpool, UK. US Airways takes delivery of its first A330-300 widebody aircraft, making the next step in its fleet transformation. Six A330s will enter the fleet by the end of the year.

2001: US Airways becomes the first carrier to fly the 169-seat Airbus A321. In addition to a common cockpit, which vastly simplifies pilot training and scheduling, US Airways’ A320-family aircraft also have common cabin fittings, such as seats, overhead bins, galleys and lavatories, simplifying cabin service and maintenance. US Airways opens a 65,000-square-foot, seven-gate addition at Boston Logan, giving US Airways Shuttle passengers a dedicated ticketing counter, concessions and a special lower-level arrivals area for deplaning Shuttle passengers. It features a club-like atmosphere, individual workstations equipped with power outlets and phones with dataports. US Airways launches service to Amsterdam. The airline also introduces four new Caribbean destinations: Antigua, Barbados, Grand Bahama Island and St. Lucia.

2002: David N. Siegel takes over as US Airways president and CEO in March, naming other new members of the senior management team over the next several months and undertaking a proactive restructuring plan for the company. As part of the restructuring, US Airways enters Chapter 11 bankruptcy reorganization on August 11, with the stated goal to emerge as a leaner, more competitive carrier in March 2003. US Airways introduces service to six new Caribbean destinations, bringing the total to 35 destinations. With 21 mainline jet destinations, four US Airways Express Caribbean destinations and the additional nine islands served through the new GoCaribbean marketing relationship with Windward Island Airways and Caribbean Star Airlines in summer 2002, US Airways serves more Caribbean destinations than any other U.S. carrier. US Airways implements expanded check-in options for customers, rolling out both Web Check-in on usairways.com and nearly 250 self-service check-in kiosks at 46 airports across the U.S. and Puerto Rico. As a result, customers can book tickets, check luggage and obtain boarding passes in as little as 30 seconds. US Airways Express begins service out of a new 95,000-square-foot facility in Charlotte, having added approximately 64 percent more passenger seats at Charlotte since June 2000.

2003: US Airways begins implementation of a codeshare agreement with United Airlines, introducing customers of both airlines to more than 3,000 codeshare flight segments in the first half of the year, reciprocal airport club use and simplified ticketing and baggage procedures. Midway Airlines joins the US Airways Express ten-carrier network, bringing expanded regional jet service to destinations such as Jacksonville, FL and Myrtle Beach, SC. US Airways launches service in May between Philadelphia and both Dublin and Shannon, Ireland, the airline’s ninth and tenth European destinations.

2004: US Airways joins the Star Alliance network, an alliance of member airlines that share networks, lounge access, check-in services, ticketing and other services.

US Airways Group, Inc. files again for reorganization under Chapter 11 of the United States Bankruptcy code on September 14, seeking to restructure operating costs in light of ever-increasing fuel prices and cutthroat industry competition.

2005: America West Holdings and US Airways Group, Inc. announce plans to merge on May 19. Former America West Airlines Chairman and Chief Executive Officer Doug Parker is chosen to run the combined airline.

In August, America West and US Airways unveil the livery that will appear on the aircraft of the new US Airways. Employees of both airlines, some sporting ‘retro’ uniforms heralding back to various periods in the airlines’ pasts, celebrate the new paint scheme as a freshly painted Airbus A320 makes its way across the country, stopping for special events with union leaders of both airlines.
The merger transaction is officially complete on September 27, and US Airways Group, Inc. is no longer in bankruptcy. Stock of the merged airline begins trading on the New York Stock Exchange under the LCC ticker symbol.

2006: US Airways adds Lisbon, Stockholm and Milan to its expanding international route map with several domestic routes including Portland, OR to/from Philadelphia; Orlando to/from Key West, FL; and Sarasota, FL to/from Washington, DC. Throwback liveries are dedicated mirroring the schemes of PSA, Piedmont, Allegheny and America West. Events are held in the progenitor airlines’ hub cities. The airline posts profits for both the first and second quarters of the year, surpassing analyst expectations and contributing tens of millions of dollars to employee profit sharing programs. The airline employs more than 35,000 aviation professionals and its route map encompasses 3,800+ daily flights serving 239 destinations and 28 countries/territories.

2007: US Airways inaugurated new service from Philadelphia to Athens, Brussels and Zurich and announced the airline’s first-ever service to London Heathrow from Philadelphia to begin March 29,

2008. US Airways announced a new codeshare agreement with Air New Zealand, giving passengers the ability to connect seamlessly between the United States, New Zealand, Australia and the Pacific Islands from Los Angeles and San Francisco. US Airways agreed to add seven Airbus A330-200s to the airline’s widebody fleet to be used to support the airline’s international growth plans.

The airline obtained a single operating certificate from the FAA, hired a new Chief Operating Officer (COO), Robert Isom, and announced plans to build a new 60,000-square-foot flight operations control center in Pittsburgh. The airline migrated two reservations systems onto one platform, launched a mobile-device friendly version of usairways.com and became the first airline to implement text message technology that allows customers to receive on-demand flight status and enroll in the frequent flyer program via mobile phone or PDA.

US Airways introduced upgraded buy on board inflight meals and snacks and also launched upgraded First Class meals on flights in the U.S., Canada, Latin America and the Caribbean. US Airways was awarded an industry-coveted Freddie Award in the Best Promotion category for Dividend Miles’ popular ‘Everything Counts’ program, which allows members to accrue miles through a variety of partners.

2008: US Airways was the #1 on-time airline in 2008 among the ‘Big Six’ hub-and-spoke airlines according to the U.S. Department of Transportation’s (DOT) monthly Air Travel Consumer Report.

US Airways inaugurated its first-ever service to London Heathrow from its international gateway in Philadelphia. US Airways also announced plans to operate year-round, daily nonstop service to Tel Aviv from Philadelphia, scheduled to begin July 2009. US Airways announced three new transatlantic flights to begin spring 2009: Birmingham, UK and Oslo, Norway from Philadelphia; and Paris Charles de Gaulle from Charlotte. Transatlantic flights in 2009 will total 27 daily flights to 23 destinations.

US Airways received final DOT approval to begin first-ever nonstop service between Washington Reagan and Akron/Canton, OH. Other new service agreements included a new codeshare with Swiss International Air Lines and Air China which allow for more convenient connections for US Airways customers to both Europe and Asia.

The airline implemented an a la carte pricing strategy, charging for checked bags, inflight meals and Choice Seats, which was originally expected to generate approximately $300 to $400 million annually in incremental revenue; US Airways revised its estimates by $100 million based on positive results thus far. US Airways now anticipates it will generate $500 million in incremental revenue annually.
In the fourth quarter, the airline completed a series of financial transactions which raised approximately $810 million in gross proceeds and included a $400 million paydown at par of the Company’s bank loan.

US Airways successfully activated the airline’s new, state-of-the-art Operations Control Center in Pittsburgh where all flight control and dispatch functions for US Airways’ 1,300 daily mainline flights are carried out.

2009: On January 15, the crew of flight 1549, bound from New York LaGuardia to Charlotte successfully ditched their crippled aircraft in the Hudson River. All 155 passengers and crew survived.

US Airways was awarded and began year-round service from its Charlotte hub to Rio de Janeiro, resumed its Charlotte to Paris service and began service from Charlotte to Rome. Also in 2009, the airline began nonstop flights from Philadelphia to Tel Aviv and from Phoenix to Montego Bay. During the year, the airline entered into codeshare agreements with Qatar Airways, ANA and TACA.

The airline introduced its Power-Nap Sack™ pillow and blanket kits and reinstated complimentary nonalcoholic beverages in flight. US Airways also reintroduced complimentary house wine and beer in the US Airways Clubs and announced free Wi-Fi. The airline also announced the ability to prepay for checked bags online. During the third quarter US Airways unveiled its newest transatlantic, lie-flat business class cabin, the Envoy Suite.

In the third quarter US Airways announced an airport slot transaction with Delta Airlines. Upon regulatory approval, US Airways will obtain 42 pairs of slots (roundtrip flights) at Washington Reagan and will acquire the rights to expand to Sao Paulo and Tokyo. US Airways will transfer to Delta 125 pairs of slots used to provide US Airways Express service at New York LaGuardia. US Airways also announced that, once the transaction is complete, the airline would provide service to 15 new destinations from Washington Reagan. The airline announced that the transaction is expected to improve profitability by more than $75 million annually.

In October, US Airways announced a strategic plan to strengthen its core network by realigning its operational focus on its hubs in Charlotte, Philadelphia and Phoenix and its focus city Washington, DC. These four cities, as well as the airline’s hourly Shuttle service between New York LaGuardia, Boston and Washington Reagan will serve as the cornerstone of the airline’s network and will present 99 percent of the airline’s available seat miles, compared to the 93 percent in 2009, by the end of 2010.

The airline completed a major liquidity improvement plan in November, reducing capital spending and deferring certain debt repayments, which improved the projected year-end 2009 liquidity by approximately $150 million and would generate, in aggregate, approximately $450 million of projected liquidity improvements by the end of 2010.

2010: In the first quarter of 2010, US Airways began a new bilateral codeshare agreement with El Salvador-based TACA Airlines, opening up new Central American offerings for US Airways customers at Managua, Nicaragua; San Salvador, El Salvador and Guatemala City, Guatemala. The airline also announced a new codeshare agreement with Brussels Airlines. The new codeshare, which began April 3, provides single-source booking, ticketing and baggage connections for more than 20 new destinations in Europe and Africa, including points in Gambia, Senegal, Cameroon and Kenya.

In March, the airline launched wireless internet through Gogo® Inflight Internet on five of its Airbus A321 aircraft, with the remaining fleet of A321 aircraft outfitted by June. Gogo allows passengers to use their laptops or Wi-Fi enabled mobile devices to access the web, email, log in to corporate Virtual Private Networks (VPN) and access online entertainment options.

In April, the airline moved to a cashless cabin on mainline domestic flights, accepting only credit and debit cards in flight to expedite cabin service and reduce back-end processing time and costs.

From the airline’s largest hub, Charlotte, NC, US Airways launched year-round service to Melbourne, FL in February, began begin daily, year-round service to Ottawa on May 31 and on June 5, the airline began year-round service to Puerto Vallarta and Los Cabos, Mexico. The airline also initiated new transatlantic service from Charlotte to Rome Fiumicino Airport, inaugurated new nonstop, year-round service to Ottawa, Ontario in May and resumed service to Baton Rouge, LA in June. Nonstop seasonal summer service between Charlotte and Madrid, Spain and Dublin, Ireland was also announced, which will begin in May 2011. The new flights complement US Airways daily, nonstop year-round service to both destinations from Philadelphia, the airline’s international gateway.

In Philadelphia, the airline began operating both international and domestic flights at Philadelphia International Airport’s Terminal A-East upon the relocation of Delta to Terminal D in April, giving the airline full or shared access to all international gates in Philadelphia, reducing operational challenges and providing a better airport experience for customers. The airline also launched its first-ever service to Halifax, Nova Scotia on June 1.

In the summer of 2010, the airline announced a major expansion of its bilateral codeshare agreement with Star Alliance partner Spanair, giving US Airways customers seamless access to destinations within Spain, the Canary Islands, continental Europe and Africa. Also announced was a new bilateral codeshare agreement with Star Alliance partner, Turkish Airlines, giving customers access to Istanbul via Turkish Airlines service from Frankfurt, Munich and Zurich access to four new destinations including Adana, Izmir, Antalya and Ankara via Istanbul. In addition, US Airways customers may now opt for nonstop travel to Istanbul via Turkish Airlines service at New York John F. Kennedy International Airport and Chicago O’Hare International Airport.

The company reported a net profit of $279 million for its second quarter 2010, or $1.41 per diluted share – the company’s second highest quarterly profit since its 2005 merger.

In June, the airline paid out $150 to each employee for delivering top DOT rankings for the month of May in on-time performance, baggage handling and customer satisfaction among the five largest network carriers. US Airways also ranked #1 in on-time arrivals and customer satisfaction among major network carriers for Q2 2010 and has ranked #1 among its peers in baggage handling in May, July and August.

US Airways launched FastPathSM – an expedited airport experience for customers traveling between Boston and Philadelphia. FastPath features dedicated facilities for curbside check-in and bag drop, ticket counter check-in, security checkpoint lanes, departure gates and baggage claim carousels.

The airline received distinction as one of the 50 best companies for Latinas by LATINA Style magazine for 2010. US Airways was the only airline included among the top 50 companies. Also during the quarter, the Company received distinction as one of ‘Best Places to Work’ and earned a 100 percent rating on the Human Rights Campaign’s Corporate Equality Index, which is a leading indicator of companies’ attitudes and policies toward lesbian, gay, bisexual and transgender (LGBT) employees and customers. This is the sixth year in a row the airline has achieved a perfect score.

In October, Mesa and US Airways signed a term sheet that outlines the terms and conditions beyond the current codeshare term, which ends June 2012. The term sheet reflects a 39-month extension, through September 2015, for Mesa to operate the 38 CRJ900 aircraft they fly for US Airways.

In October, US Airways reported a net profit of $240 million for its third quarter 2010 – the highest third quarter profit in the company’s history.

In November, US Airways announced the need to recall and hire an additional 500 crew members, 420 flight attendants and 80 pilots, for 2011 to cover retirements, attrition and international growth. The airline also announced record load factors for the month of October at 83.6 percent for mainline operated flights.

The airline launched Star Alliance Upgrade Awards, an innovative and unique program that allows US Airways Dividend Miles members to use their miles to upgrade to the next class of service on Star Alliance partner operated flights. The program also allows frequent flyers with other Star Alliance carriers to use miles towards an upgrade when traveling on US Airways.

The airline, in the fourth quarter, introduced electronic boarding passes in Las Vegas and Charlotte with plans to expand the program to the entire US Airways system in the first quarter, 2011. The new technology allows customers to receive their boarding pass electronically via their smart phone and to seamlessly pass through security and board the plane.

For the fourth quarter, US Airways paid employees $50 three times for ranking #1 in baggage performance among the “Big Five” hub-and-spoke network airlines for the months of July, Aug. and Sept. as ranked by the DOT. Employees also received another $50 for surpassing the airline’s internal goals for on-time arrivals for the month of Oct, another $100 for top ranking in baggage handling and customer complaints for Nov., and an additional $50 for the airline’s #1 spot in baggage handling for the month of Dec., bringing the airline’s year-to-date companywide employee payouts to approximately $24 million, or $650 per employee.
US Airways recorded a fourth quarter profit excluding special items of $28 million, the companies first profitable fourth quarter since 2006. It also recorded a full year 2010 net profit excluding special items of $447 million, the second highest profit in the company’s history, and an accrual of $47 million in the airline’s employee profit sharing program.

2011: US Airways, in January, announced the signing of a new multi-year partnership agreement with Expedia to continue offering its full range of products and services, including all fares and inventory, through Expedia®, Hotwire® and Egencia® sites around the world.

In February, the Federal Aviation Administration (FAA) validated the airline’s fully functioning Safety Management System (SMS), making US Airways one of the first U.S. airlines to receive the FAA’s validation of its company-wide implementation of this voluntary safety enhancement program.

Also in February, the U.S. Department of Transportion (DOT) ranked US Airways #1 in baggage handling for 2010 among the major network carriers according to the DOT December 2010 Air Travel Consumer Report.

US Airways announced that it will begin three daily flights from its hub in Philadelphia to Quebec City on June 2.

For the first time since 2007, in March US Airways employees received profit sharing checks totaling $72 million for 2010 performance.

US Airways achieved a number one ranking among the “big five” hub-and-spoke carriers in the annual Airline Quality Ranking (AQR) report, an industry benchmark that measures airline reliability and service.

In April, US Airways announced the addition of First Class service to 110 US Airways Express regional jets – expanding the number of domestic flights with First Class and the availability of upgrades for the airline’s Dividend Miles Preferred frequent flyer members. The Company also announced several enhancements to its domestic First Class and Envoy international business class experience.

In May, US Airways begins seasonal service to Madrid and Dublin from its Charlotte, N.C. hub. The new flights brought the number of international destinations US Airways serves from Charlotte, its largest hub, to 31 – six cities in Europe and 25 in Latin America and the Caribbean.

In May, Delta and US Airways announced a new agreement to transfer takeoff and landing rights at New York’s LaGuardia and Washington D.C.’s Reagan National airports, which will enable Delta and US Airways to expand service and increase competition at two of the nation’s key cities, and provide the opportunity for additional access to LaGuardia and Reagan National for new entrants and airlines with a limited presence at the airports.

Under the agreement, Delta would acquire 132 slot pairs at LaGuardia from US Airways and US Airways would acquire from Delta 42 slot pairs at Reagan National and the rights to operate additional daily service to Sao Paulo, Brazil in 2015, and Delta would pay US Airways $66.5 million in cash. In addition, the airlines will divest 16 slot pairs at LaGuardia and eight slot pairs at Reagan National to airlines with limited or no service at those airports. The completion of the transaction is subject to certain closing conditions, including government and regulatory approvals. A slot pair is the authority to operate one takeoff and one landing.

In June US Airways begins three daily flights from its hub in Philadelphia to Quebec City, Canada. The new flights brought the number of international destinations US Airways serves from its Philadelphia hub to 36 – 17 cities in Europe/Middle East, 14 in Latin America/the Caribbean and 5 destinations in Canada.

Also in June, US Airways announced that it reached a tentative agreement, subject to ratification, on a new, four-year collective bargaining agreement with the Transport Workers Union (TWU) that represents the airline’s 164 flight dispatchers.

In July, US Airways announced a second quarter, 2011 net profit excluding special items of $106 million, or $0.56 per diluted share.

Also in July, the Department of Transportation (DOT) tentatively approved the proposed slot transaction, announced in May, at New York-LaGuardia and Washington-Reagan National airports.

For the second year in a row, US Airways was named one of LATINA Style Magazine’s 50 best U.S. companies for Hispanic women to work for.

In August, the American Red Cross named US Airways as a 2011 Disaster Responder and recognized the airline for its support in disaster response.

In September, US Airways operated its 200th Honor Flight, transporting veterans to visit the World War II memorial and other sites in Washington, D.C. The flight took 101 veterans from Raleigh-Durham International Airport in North Carolina to Washington National Airport.

In October, Delta Air Lines and US Airways welcomed the decision by the Department of Transportation to approve the proposed slot transaction at New York-LaGuardia and Washington-Reagan National airports, subject to certain conditions. The DOT’s final order represents a clear recognition by the Obama Administration that the slot transaction is in the public interest because of the service benefits and efficiencies that would result in both New York and Washington, D.C.

In November, US Airways announced it has returned work previously handled outside of the United States to its call centers in Winston-Salem, N.C., Phoenix, and Reno, Nev. The new positions meet a contractual requirement to handle all general reservations sales calls originating in the United States in U.S. call centers by Nov. 1, 2011.

Also in November, US Airways announced two new routes from New York City and North Carolina. Beginning March 10, 2012, customers on the East Coast can take advantage of US Airways’ first-ever flight beyond the 1,500 mile limit set by the perimeter rule at New York’s LaGuardia Airport with Saturday service to the airline’s Phoenix hub.

Additionally, starting March 4, 2012 customers in Salt Lake City will have access to daily year-round service to Charlotte, N.C.

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Merger news stories from the past

January 12, 1985

American, Piedmont Airlines Target of Antitrust Probe

Robert E. Dallos
Los Angeles Times

NEW YORK — The Justice Department is investigating the possibility that American Airlines and Piedmont Airlines carved up the highly profitable Dallas-Fort Worth passenger market in violation of antitrust laws, spokesmen for both airlines confirmed Friday.
The spokesmen said the federal inquiry has been under way for more than a year and that both airlines were cooperating with Justice Department investigators. Both of them said their airlines were innocent of any wrongdoing.
A Justice Department spokesman, Amy Brown, said two airlines were being investigated in the Dallas-Fort Worth area but declined to identify them.
“I can confirm that this department is looking into market-allocation agreements” that the two airlines might have entered into secretly, she said.
Such agreements, which are anti-competitive, would have one airline agreeing to stay out of routes served by the other, and vice versa. Such behavior would violate the Sherman Antitrust Act and would constitute a civil violation punishable by a fine.
Brown said she didn’t know how much longer the investigation would take. She said it was being conducted by three department lawyers, as well as paralegals. They are inspecting documents from both carriers, she said, and interviewing people at both airlines who may have been involved.
She said that charges involving an agreement to allocate markets have never been brought against an airline, though there have been cases in other industries, such as construction.
Piedmont began serving the Dallas-Fort Worth market in April, 1979, and operates 9 flights a day between Texas and its hubs in Dayton, Ohio, and Charlotte, N.C.
Donald F. McGuire, vice president for public affairs, said: “We are convinced there was no wrongdoing on our part.” He said that Peidmont’s services into Dallas “fit handsomely into Piedmont’s route structure.”
Al Becker, a spokesman for American, said that “there has been absolutely no impropriety between American and Piedmont.”
American Airlines is by far the largest carrier in the Dallas-Forth Worth market. It operates 280 flights into Dallas-Fort Worth and the same number of flights out.
In December, American boarded 836,849 passengers there. Its market share at the airport grew to 60.4% in December from 55.4% in August.
Delta is the next-largest carrier in the market with 23.1% in December, up from 22.4% in August.
A handful of major carriers share the remaining segment of the market. They include Continental, United, Northwest, Eastern, Republic, Pan American, USAir, Western and TWA.
Braniff ceased to be a factor in the market in November when it cut its service from more than 20 markets to 9.

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June 05, 1986

Piedmont Airlines expansion with new planes
Piedmont ordered up to 55 new Boeing 737-400s

Piedmont Airlines became the first carrier to order the new fuel-efficient plane, a 156-seat twin jet that Boeing says will be the world’s most modern passenger aircraft when it becomes available in two years. Boeing placed the value of the 55 aircraft at about $1.9 billion, including spare parts. The Winston-Salem, N.C.-based carrier said it expects delivery of 25 jets beginning in September, 1988. The airline also has an option to buy 30 additional 737-400s to be delivered in 1990 and 1991.

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February 17, 1987

Railroad Bids to Acquire Airline

Associated Press

WINSTON-SALEM, N.C. — Piedmont Aviation Inc., parent of fast-growing Piedmont Airlines, said today it has received a cash takeover offer worth $1.49 billion from Norfolk Southern Corp., one of the nation’s biggest railroads.
Piedmont also said it has received two alternate takeover proposals from USAir Group Inc. However, it said the airline company’s independent directors have recommended acceptance of the Norfolk Southern bid by Piedmont’s board of directors, who are to meet Thursday.
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September 22, 1987

Judge recommends USAir Group, Piedmont Airlines merger be denied

Robert E. Dallos
Los Angeles Times

NEW YORK — A Transportation Department administrative law judge recommended Monday that the proposed purchase of Piedmont Airlines by USAir Group be rejected because “it would substantially reduce competition in numerous relevant markets” and thus “is not in the public interest.”
Judge Ronnie A. Yoder’s recommendation now goes to Matthew Scocozza, assistant secretary of transportation for policy and international affairs. After consulting other officials of the department, Scocozza will issue the final ruling by Sept. 30.
Edwin I. Colodny, chairman and president of USAir, immediately termed Yoder’s recommendation “incomprehensible.” The Transportation Department’s public counsel and the Justice Department had “examined the same facts and found no competitive problems,” Colodny said.
The consolidation would be one of the highest-priced such transactions in the spate of airline mergers that has taken place in the last two years. USAir, based in Arlington, Va., agreed in March to acquire Piedmont for $1.59 billion.
The two carriers’ operations would dovetail well, analysts say, because Piedmont, headquartered in Winston-Salem, N.C., operates mainly in the Southeast while USAir’s routes are concentrated in the Midwest and Northeast. Earlier this year, however, USAir Group completed its $400-million acquisition of Pacific Southwest Airlines, giving the holding company its first major presence on the West Coast.
Yoder’s recommendation Monday, made after a series of hearings, concluded that “the proposed acquisition would substantially reduce competition in numerous city-pair markets.”
He conceded that no interested party had proved “that the proposed merger would likely reduce competition substantially in the national market.”
But, Yoder went on, “the proposed acquisition raises serious concerns about substantial reduction of competition in the applicant’s (USAir’s) Eastern U.S. niche.”
Airline observers and USAir officials said they believe that the judge opposed the merger because of competitive, scheduling and safety problems that have resulted from other recent mergers and because some members of Congress are eager to re-regulate the airline industry.
USAir Chairman Colodny noted that the same administrative law judge had recommended the approval of the larger merger of Northwest Airlines and Republic Airlines last year. “It would a travesty,” he said, “if USAir and Piedmont were not allowed to merge after the DOT has approved far larger mergers that created some of the airline industry giants that are USAir’s and Piedmont’s major competitors.”
He went on to express confidence that the merger would eventually win approval.
Louis Marckesano, airline analyst with Janney Montgomery Scott, a Philadelphia brokerage, said that if USAir and Piedmont are allowed to merge, “they would have a fighting chance to compete with the major airlines. Without a merger, their future is in great danger.”
Profitable Piedmont is an all-jet airline competing for traffic with Eastern Airlines and Delta Airlines as well as USAir.
Over the past few years, USAir has been one of the nation’s most consistently profitable airlines. It has little competition on most of its route system and its largest operation has been in Pittsburgh. It also has a major presence at Washington National Airport, where new competition is restricted.
A USAir-Piedmont consolidation–including USAir’s PSA subsidiary–would create the nation’s seventh-largest airline company in terms of revenue passenger miles. (A revenue passenger mile is equal to one paying passenger carried one mile.) It would be slightly smaller than Trans World Airlines, which merged with Ozark Airlines last year.

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July 31, 1989

2 ‘Puddle-Jumpers’ Make It to the Altar : Piedmont Airlines’ Logo to Disappear as It Finally Joins USAir

Associated Press

WINSTON-SALEM, N.C. — After a long engagement between two original puddle-jumpers, one of the biggest airline marriages will take place this Saturday, when Piedmont Airlines assumes the name of suitor USAir Group Inc.
The union will create an airline that employs more than 48,000 people operating a fleet of 426 jets in 36 states, two Canadian provinces, the Bahamas and Britain.
Figures compiled by the Air Transport Assn. in Washington show the combined operations would rank USAir as the seventh largest in terms of capacity. The two airlines flew more than 59 million passengers last year.
The courtship between USAir and Piedmont was brief and expensive, and came at a time the airline market was becoming carnivorous. USAir bought Piedmont for $1.59 billion cash.
“Piedmont folks expected people would have to spend a heck of a lot of money,” said Dan Brock, vice president of marketing services for USAir and former senior vice president of marketing for Piedmont.
“There was a strong feeling of self worth,” he said. “We knew we were good, and we wanted to be good. I don’t think it surprised anybody that we went for such a big price.”
The USAir-Piedmont merger reflected a broad move throughout the deregulated airline industry to gain strength through size. Delta Airlines bought Western Airlines, Texas Air acquired People Express and Eastern, Northwest Airlines bought Republic Airlines and Trans World Airlines bought Ozark Airlines.
TWA had also wanted to buy USAir, making the Piedmont purchase more important to USAir’s struggle to retain its identity.
Piedmont employees are expected to miss their own identity, established by the company 41 years ago when it began flying out of Winston-Salem with small, noisy prop planes. But Brock said Piedmont isn’t moving into hostile territory.

Birds of a Feather
“It is a marriage to a partner who is so similar to us,” Brock said. “We have had to struggle. So have they. We began with a role of flying from small cities to big cities, and USAir was much the same. We were lucky to be acquired by someone so much like us.”
“Employees felt a sense of loss, from the sense that (Piedmont) was more than just a company,” he said. “The company was, and in a sense still is, a family.”
The employees have had 2 1/2 years to adjust to the idea of merging with USAir, which is headquartered near Washington.
“(Company officials) didn’t want to rush into the merger,” Brock said. “They wanted to plan it out, get the issues behind us, and know where we were going.”
At a hangar at the Smith-Reynolds Airport in Winston-Salem, workers who wore Piedmont patches toiled in the weeks before the merger to remove the Piedmont name from jets and replace it with the red and blue USAir logo.

By Saturday, Piedmont’s logo will be history
In 1978, when deregulation of the airline industry began, the logo represented one of only a few airlines serving the small Southeastern towns that other carriers decided to skip. Piedmont’s main competition was USAir.
Rather than leave these small towns, both airlines chose to branch out and fly elsewhere as well, as deregulation allowed them to do.
“Our job had been to feed these people to other airlines in major cities,” Brock said. “With deregulation, we could start trying to feed ourselves.”
Merger talks began as early as 1986, when Piedmont Chairman William Howard held the first of several discussions with USAir Chairman Edward Colodny. Later, the bids began coming. Norfolk-Southern Corp., in February, 1987, offered $1.49 billion, or $65 a share, for Piedmont. The Norfolk, Va.-based transportation company already owned 19.5% of Piedmont’s stock.
USAir offered $71 a share, with half the 23 million outstanding common shares to be purchased in cash and the rest exchanged for USAir stock.
Piedmont wanted cash, USAir wanted Piedmont, so USAir came back with an all-cash agreement of $69 a share. Piedmont accepted the deal in March, 1987. The U.S. Transportation Department approved it half a year later, and the planning for a smooth merger has been under way since.

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August 4, 1989

Piedmont’s last day: Aviation’s largest merger nears

Associated Press

CHARLOTTE- All traces of Piedmont Airlines began to disappear Friday at its largest hub, as officials and employees bid farewell to the 40-year-old airline that merged with former rival USAir Group Inc.
Throughout Charlotte-Douglas International Airport, the Piedmont logo was replaced by USAir’s red and blue colors. Thousands of signs already were covered and uniforms were switched.
As of Saturday, Piedmont ceases to exist as a separate carrier when it is officially taken over by USAir in one of the largest mergers in U.S. aviation history.
The union will create the nation’s seventh-largest airline with a fleet of 426 jets and 48,000 employees. The airline will operate in 36 states, two Canadian provinces, the Bahamas and Great Britain.
”We’ll all miss Piedmont, but it will be good,” said customer service representative Tonya Brake, who already had changed her uniform.
”Everybody was so proud of Piedmont,” she said. ”It was a down-home airline.”
As the midnight deadline approached, few Piedmont signs could be found at the airport where the airline had 300 departures a day.
It’s been more than two years since USAir, the nation’s eighth largest airline at the time, agreed to pay $1.6 billion in cash to acquire Piedmont, the nation’s ninth-largest carrier.
On Friday afternoon, officials and employees gathered at Gate 12B to say goodbye to the airline Tom Davis founded 40 years ago.
”We’ve worked so long for this day that this seems kind of anticlimatic,” said Charlotte Mayor Sue Myrick.
”I’m going to miss Piedmont’s strong Southern sentiment,” said passenger Jo Ann Swann as she bought her last Piedmont ticket.
Piedmont’s story began in 1940, when Davis bought controlling interest in a flying service and renamed it. Eight years later, the first Piedmont flight departed Wilmington for Cincinnati.
When airline deregulation began 30 years later, Piedmont was one of a handful of carriers serving small Southeastern towns other airlines ignored. Its main competition was USAir, based outside Washington.
In January 1987, Piedmont’s largest shareholder, Norfolk Southern Corp., announced an interest in buying the airline. Other suitors followed, including USAir.
One month later, USAir agreed to buy Piedmont for $1.6 billion. Company officials took two years to complete the deal to mesh flight schedules, computer systems and two large work forces.
Officials of USAir, which began as Allegheny Airlines, have called the merger a perfect marriage, saying the two airlines shared nearly identical histories.
”Both were small airlines that grew up catering to small and medium cities,” said Patricia Goldman, senior vice president of communications for USAir. ”When deregulation came about in the late 1970s, other airlines went for the more glamorous routes and to international destinations.
”We made our bread and butter by never abandoning the small cities,” she said.
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November 18, 1989

Big Plans Bring Bigger Headaches to USAir
Airlines: The firm was still handling problems from purchases of Piedmont and PSA when the industry went into a slump. Then Mother Nature struck

Robert E. Dallos
Los Angeles Times

ARLINGTON, Va. — These are not good times for USAir Group, parent of USAir.
Its merger with Piedmont Airlines, the largest in airline history, was planned with patience and precision. But it did not come off as smoothly as had been hoped.
Arlington-based USAir has also been buffeted by natural disasters–Hurricane Hugo and the San Francisco Bay Area earthquake–and by troubles being suffered generally throughout the industry.
But the big problems grew out of the merger. USAir management had paid close attention to the mergers of other airlines, hoping to learn from their mistakes.
That is the way that USAir conducts all of its business, many industry observers say. “Neither flamboyant nor overly aggressive,” is the way Louis Marckesano, airline analyst with the Philadelphia-based brokerage of Janney Montgomery Scott, describes USAir.
“Management has concentrated on developing and on dominating its historical markets in a methodical, low-risk fashion (and) exhibited the same cautious, go-slow approach” in its mergers with both Piedmont and Pacific Southwest Airlines, Marckesano added.
The $1.6-billion purchase of Piedmont took place in April, 1987, but the two airlines’ operations were not fully integrated for 16 months. In 1986, USAir had swallowed up PSA for $313 million.
Despite all USAir’s efforts, there still were significant merger-related expenses and problems, not just with the Piedmont takeover but also with the PSA marriage, which made USAir the airline industry’s largest West Coast operator.
Integrating the operations of the merged airlines cost much more than had been estimated. Everything from computers to pilot training and maintenance procedures needed to be meshed. It cost $30 million just to install first-class service in the planes of the joined airlines. Piedmont was just developing first-class service at the time of the merger and neither USAir nor PSA offered it.
Also, work forces had to be put together, and that job was complicated when some employees refused transfers–taking early retirement or quitting–which resulted in understaffing at some locations. As a result, workers in the field had to take heat from irate customers.
Though new people were hired and trained, morale and performance slipped for a time. Flights were delayed or scratched. Baggage was lost. Spare parts for airliners ended up in the wrong cities. Veteran employees feared that their jobs were in jeopardy.
Costs soared. Edwin I. Colodny, USAir Group’s chairman, said in a recent interview that it is costing USAir $58 million a year to raise the wages of former PSA and Piedmont employees to USAir’s pay scales. And merger-related pilot training and conversion of computer systems will cost the company $40 million this year, about the same as the $37 million it cost last year.
In the third quarter of this fiscal year, USAir suffered its first loss in seven quarters and its first loss in a third quarter in more than 15 years. The carrier reported an operating loss of $71.9 million in the quarter, contrasted with an operating income of $136.7 million in the same period of 1988.
Colodny is candid about the troubles the airline experienced after the final integration with Piedmont on Aug. 5.
“It didn’t run smoothly for a while,” he said in the interview, “despite all the planning. . . . We had a very rough period for about 2 1/2 weeks . . . particularly on the former Piedmont system. On-time performance was very poor. We had cancellations. We knew we were going to take a hit on the merger.”
But the kinks were slowly worked out, and things began to improve. The new USAir was getting its act together.
But then, on Sept. 22, came Hugo.
“We were doing quite well until the hurricane,” Colodny recalled. “That hurricane busted us up pretty badly. . . . Charlotte, N.C., (where USAir has its major hub) was just wiped out for 24 hours. . . . (We lost) 300 flights a day, plus all of the computer system was out.”
The storm probably cost the company as much as $25 million in lost revenue and extra expenses, estimated Helane Becker, airline analyst with the New York investment firm of Shearson Lehman Hutton. Robert McAdoo, airline analyst with Oppenheimer & Co., another New York financial firm, added that “conservatively” the airline lost 25% of its revenue for three full days.
No sooner had USAir mopped up after Hugo than the Oct. 17 earthquake hit San Francisco, where USAir operates 82 daily flights. “We . . . stopped a lot of flights from going into San Francisco until we knew what the situation was,” Colodny said. “We had crews that were unable to get to airplanes and planes that were out of position, and we had five days of disruption on the system as a result.”
These troubles, plus a few others common to the industry, have made it a dismal year for USAir, which has one of the best profit records in the industry and which has not had an annual loss for more than a dozen years. Promotional fare programs, especially on the West Coast, and a higher-than-expected redemption of frequent flyer awards have hurt USAir, as has the rebuilding of a flight schedule by a major competitor–Eastern Airlines, which is trying to emerge from bankruptcy proceedings.
The end of USAir’s troubles is not in sight. Throughout the industry, traffic is weak and costs are higher than expected. USAir’s fuel bill alone has jumped 12.8% in the third quarter to 56.4 cents a gallon, costing the carrier an extra $20.6 million in the quarter, according to Edward J. Starkman, airline analyst with the Paine Webber brokerage.
“If the summer was a loss, expect a tough winter,” said Oppenheimer’s McAdoo. “Given the seasonality of USAir’s routes, including its substantial business in the Northeastern U.S., where winter weather causes damage each year, the company should incur substantial losses in the next few quarters. . . . Realistically, USAir may not have a profitable quarter (until) one full year from now.”
Colodny disagrees, saying he expects “a profitable year” but acknowledging that profits will be “down significantly from last year.” For all of 1988, USAir reported net profits of $165 million, off 15% from the year earlier.
USAir has great hopes for the California market, but Colodny said it is a tough nut to crack.
“It is very, very competitive right now,” he said. “Some of the local markets have had too much capacity. . . . You’ve got USAir, you’ve got American, you’ve got United and Alaska–and now Southwest has entered the market with very aggressive pricing. Southwest charges much higher fares in Texas (its home) than they do in California.”
He says he does not know his competitors’ figures and will not disclose USAir’s load factors in California. But, he maintained, “We’re holding our own. . . . As to whether anybody is making money in the short-haul California markets at the moment, my guess is: probably not.
“Let the marketplace decide who is going to survive and who decides to pull out,” he added. “For the long run, California is going to become a very strong market. So we have no intention of disappearing in California.”
Meanwhile, USAir has been carrying “superb” loads on long-haul routes between Eastern cities and the West Coast, Colodny said. Since March, 1987, he added, USAir’s number of daily flights into Los Angeles has been doubled to 20.
The airline, through the mergers and airliner purchases, has built a fleet of 432 planes, the industry’s second largest next to United’s. It has another 107 planes on order and options on still another 149.
Colodny, who had traditionally opposed airline mergers, said he was pushed into both of USAir’s consolidations to meet the competition. He still complains that such marriages “are an expensive way to grow in the short run” but concedes that “in the long run we will have a much stronger airline.” From now on, he said, he wants USAir to grow from within, and he insisted that he has no desire for the company to acquire or be acquired.
USAir has had a tough time fighting off a bad reputation from its early days, when its name was Allegheny (some called it Agony) Airlines. It was the Rodney Dangerfield of the airline industry, getting little respect and becoming the butt of frequent jokes.
One of Allegheny’s ancestors was Mohawk Airlines, about which this probably apocryphal story was told:
A control tower gets a request from a pilot of an incoming plane asking for the time of day. “That depends on which airline is asking,” said the controller. “If this is American, it is 1300 hours. If it’s United, it’s 1 p.m. And if this is Mohawk, Mickey’s big hand is on the 12 and his little hand is on the one.”
In 1979, Allegheny changed its name to USAir. But its reputation for lateness did not change immediately, and customers often said the new name was actually an acronym for Unfortunately Still Allegheny in Reality.
The 63-year-old Colodny, who started his career with the company in 1957 as assistant to the president, became head of what was then Allegheny in 1975. He said he believes that USAir is now a respected member of the industry and that its bad old days are behind it.
But in the meantime, it still has a few hurdles to get over.

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July 21, 2003

American-TWA merger deemed right move, but 9-11 changed things

Associated Press

ST. LOUIS — Optimism soared as high as 747s above Lambert Airport two years ago when American Airlines completed its buyout of bankrupt Trans World Airlines, saving thousands of jobs and retaining the St. Louis airport as a vital hub.
Two-and-a-half years later, half of those TWA workers have lost their jobs. As of November, American will cut the number of departures out of St. Louis by more than half, to 207 from 417, the company announced this week. Nonstop service will be axed to 27 destinations. Smaller planes will be used. And some believe the scaling back isn’t finished yet.
It’s not that Fort Worth, Texas-based American made a mistake in purchasing debt-ridden TWA, experts say. Nor, they say, has the airline betrayed its adopted community.
Simply put, fate — and the terrorists — intervened.
“In a very real sense, the terrorists won,” said Michael Boyd, president of the Evergreen, Colo.-based Boyd Group, an aviation consulting firm. “Victim: St. Louis.”
“Nine-11 and the inept aftermath of it basically reduced the air transportation system in revenues by 20 percent. That changed everything.”
American executive vice president for marketing Dan Garton said the Sept. 11, 2001, terrorist attacks were only part of the problem.
“We’ve had a war, terrorist threats and a SARs epidemic,” Garton said. “No one could have predicted this turn of events.”
Still, for some in St. Louis, there was a sense of betrayal.
Mike McDermott was laid off in July after 28 years as a flight attendant, first for TWA, then for American.
“Three years ago I told everybody we needed our seniority or the merger was going to be disastrous,” McDermott said. “There is no question we were all lied to. The idea of two great airlines, one great future, was nothing but a farce. It was a way to get the politicians on their side in order to get the merger approved.”
About 1,500 jobs will be lost when the latest cuts take effect Nov. 1. Many of those workers are former TWA employees who went to the bottom of American’s seniority ranks with the merger. Of the 20,000 or so TWA employees at the time of the merger, about 10,000 will still be with American after the latest cuts, an American spokesman said.
McDermott, a former union leader, questioned those numbers.
“If there are 5,000 overall TWA employees who are continuing to work, I’d be surprised,” he said. “They got rid of 80 percent of the pilots and 100 percent of the flight attendants. Every flight attendant who worked for TWA is laid off.”
Meanwhile, about 500 more workers will be laid off Sept. 15 when American closes a reservations office in St. Louis.
This week’s news was the latest in a long line of gloomy developments for the aviation industry here.
TWA, based in St. Louis, struggled for more than a decade to stay afloat despite losing money year after year after year. The downtrodden but proud airline was about to go under for good, filing for bankruptcy in January 2001, when American announced plans to purchase its assets.
Three months later, top executives from both airlines gathered with employees in an emotional merger ceremony in a hangar at Lambert. TWA and American jets stood nose-to-nose on an adjacent runway. Many longtime TWA employees cried — tears that were, in part, sadness at the loss of TWA, but mostly, happiness that they could keep doing their jobs for a profitable, vibrant company like American.
“The purchase of those assets from TWA was a brilliant stroke of strategy for American Airlines,” Boyd said. “It was a good move then. Having Chicago, Dallas and St. Louis as mid-continent connecting hubs, they could dominate the business.”
Garton agreed.
“Just take a minute and go back to that time,” he said. “Our operations in other hubs were essentially at capacity. We had demand we couldn’t meet. We needed another way to take people east and west. We were making money on almost all of our flights, and we were facing a United-US Air merger.
“Now, the world is completely topsy-turvy.”
Some Missouri politicians wonder why American has singled out St. Louis and former TWA workers to take the brunt of the cutbacks. Even as Lambert flights are cut in half, American is growing operations at the Chicago O’Hare and Dallas-Fort Worth hubs.
“In two short years, a promising acquisition has turned into a string of broken promises,” Sen. Kit Bond, R-Mo., said.
U.S. Rep. Kenny Hulshof, R-Mo., said American executives told St. Louis area congressmen during the merger talks that job losses “would not fall disproportionately on TWA employees. Those statements were false.”
But analyst Juli Niemann of RT Jones in St. Louis said American should be praised, not scorned.
“Basically, American gave them (laid-off employees) three years they wouldn’t have had,” she said.

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May 10, 2010

End of TWA in 2001 hurt hub in St. Louis as American Airlines focused on bigger airports

By Robert Schoenberger
The Plain Dealer

At one time St. Louis was a key link in U.S. air travel, Trans World Airline’s main U.S. hub that shuttled millions of travelers each year between the East and West coasts.
But as TWA’s financial health declined, things looked grim for St. Louis, until American Airlines decided to buy the carrier’s assets out of bankruptcy.
The plan was to keep the St. Louis hub alive while easing congestion at American’s hubs in Dallas and Chicago. The “Gateway to the West” would continue to have direct flights to most of the country.
The 2001 deal sounded like salvation for the Lambert St. Louis International Airport.
Only it didn’t work out that way.
American Airlines has steadily cut flights in St. Louis, focusing instead on its bigger hubs. Passenger traffic has fallen by more than 50 percent and two of the airport’s concourses are set to close this year.
With United and Continental airlines planning to merge, Cleveland Hopkins International Airport would look a lot like St. Louis, the smallest hub in a big airline merger. Bigger hubs in Chicago and Newark, N.J., are likely to get more of the traffic.
Experts are optimistic that Cleveland will remain important as Continental and United combine, saying Hopkins could help the airline serve cities that would be too expensive to fly to from Chicago or Newark.
Still, analysts thought keeping St. Louis as a hub made a lot of sense, too, helping American Airlines deal with overcrowding at O’Hare.
In 2001, American’s plans for St. Louis were simple. Building on TWA’s hub there, it was going to shift traffic to St. Louis from hubs at O’Hare in Chicago and DFW in Dallas. The move would alleviate congestion and expensive gate fees in those airports while still providing a central switching point for passengers flying cross-country, American spokeswoman Mary Frances Fagan said.
Then, six months after American bought TWA’s assets as part of a complex $4.2 billion deal, terrorists flew planes into buildings in New York and Washington. Air travel plummeted, forcing airlines to re-evaluate their strategies.
“Traffic dropped substantially in the aftermath of 9/11 and we additionally saw a decline in the economy,” Fagan said.
William Swelbar, a research engineer who studies airlines at the Massachusetts Institute of Technology, said instead of funneling air traffic through three central hubs, it became cheaper for American to focus on its two bigger airports.
“The economics of the industry changed forever” following the attacks, Swelbar said.
That was not always the case. A decade ago, the St. Louis airport boasted more than 500 daily flights on TWA. Now it has fewer than 50 daily flights on American, a number expected to fall even lower by this summer.
Last year, 6 million people flew out of Lambert airport, less than half of the nearly 15 million who came through the airport in 1999.
In 2003, Fagan said it was clear that American wouldn’t need St. Louis to relieve pressure from O’Hare, and the airline cut more than 200 of its more than 500 daily flights from the airport.
Last year, after two partner airlines that had been bringing American passengers to St. Louis either went out of business or canceled flights, American further cut back its flights and revoked St. Louis’ hub status.
Richard C.D. Fleming, president and chief executive of the St. Louis Regional Chamber and Growth Association, said St. Louis lost its biggest ally within American in 2003 when the airline’s chief executive Don Carty resigned during labor disputes with American’s unions.
“The CEO who made the merger happen hit a big-time bump in the road and was gone,” Fleming said, adding that with Carty’s departure, the vision of St. Louis as a central hub went away.
Fleming’s biggest concern as the hub decline was economic development.
“For headquarter companies, air service is important, so we pay attention to it,” he said. Business travelers like direct flights, he said. Taking connecting flights can make trips last longer, keeping workers in the air instead of at work.
If a merged Continental/United eventually cuts back on air service in Cleveland, Fleming said other carriers will step up service to key business destinations. That’s what has happened in the past decade in St. Louis. Much of the traffic that went away, he said, was pass-through traffic, passengers that simply changed planes in the city.
The decision to stop using St. Louis as a hub disappointed political leaders who had been instrumental in making the American/TWA deal happen. Sen. Christopher “Kit” Bond, R-Mo., fought against legislation that would have prevented airline mergers and lobbied the Justice Department to approve the merger.
Other members of Missouri’s congressional delegation also pitched in, said Steve Taylor, spokesman for Rep. Todd Akin, R-St. Louis. Akin was on stage in St. Louis when the airlines announced their merger and promised to keep the St. Louis hub active.
“There were a lot of concerns at the time about keeping the hub,” Taylor said. “Obviously, not all of that was unfounded.”
He added that people in Cleveland should be concerned. While Continental has promised that it will keep a hub here, the aviation world can change quickly.
John La Costa, an aviation analyst with the Dallas-based La Costa Consulting group, said he believes Cleveland is in a much better position to keep its hub than St. Louis was in 2001.
In St. Louis, as American pulled back, several low-cost carriers either expanded or moved into the market. Southwest Airlines has become the largest company in the market while Frontier and AirTran have grown, he said.
“Their costs for operations are a lot lower than American’s, so American just can’t compete” on price, La Costa said.
In Cleveland, Southwest is already established, and several other low-cost carriers either serve Hopkins or the nearby Akron-Canton airport. La Costa said the Cleveland market has already experienced the price declines that come from low-cost carriers, so a merged United/Continental is unlikely to see a rapid shift in airfares here.
MIT’s Swelbar said Cleveland could be valuable to United/Continental for other reasons. While congestion at O’Hare has eased since 2001, it still exists. More importantly, because of the gate costs at O’Hare, it’s very difficult for airlines to make money there on smaller planes from mid-sized to small cities.
“Cleveland allows Continental and United to stay in those critical secondary and tertiary markets that are better served from Cleveland than using more valuable space in Newark and Chicago,” Swelbar said.
Swelbar said the Continental/United will make future hub decisions based on the economy and traffic patterns. Today, the odds of maintaining a hub here look good, but another geo-political disaster or a big increase in fuel costs could change that, he said.

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