Inquirer Staff Writer
Doug Parker is in a desperate situation, and he's not afraid to admit it: Oil at $130 a barrel and higher will turn his US Airways, and all airlines, into a dramatically different industry.
But the CEO is not giving up, and he has a message for anybody predicting his airline's downfall:
"If there are other airlines whose strategies are based on US Airways going away, they'd better find a different strategy. We are going to be fine, and we are going to get through this. We can compete as well as anyone."
If that's not clear enough: "There is no imminent risk. We have thankfully done a good job of generating cash and saving it," Parker said.
Parker, 46, was in Philadelphia Friday and met with the Inquirer's Editorial Board before flying to headquarters in Tempe, Ariz.
It's interesting he didn't address anything about what will happen if fuel prices come back down. I can't say I'm surprised but it seems that even if oil comes back down to $60-$70/barrel all of the new fees will stay.
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I think it is funny he said their customers will be business travelers if fuel continues to rise yet US has done everything possible to piss off business travelers.
There aren't going to be many people shelling out $650 for a ride on US when they get hit with another $100 in fees for drinks, bags and food on a round-trip. Throw in the worst FF program in the industry for elites and people spending that kind of money will go to great lengths to avoid them.
Moreover, all it will take for US to go under is WN deciding that CLT would be a fine market for them to enter.
Of course, as CEO, I don't expect him to say anything different, but I think all he's doing is blowing smoke out of his posterior.
I think it is funny he said their customers will be business travelers if fuel continues to rise yet US has done everything possible to piss off business travelers.
It's sad if Dougwiser really believes that.
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Strictly my guess, but possibly lack of gates - I don't think that there's a gate at CLT that isn't used at least part-time by another airline.
Jim
Even if it is, with all the capacity cuts amongst carriers, I'd not expect this to be an issue for long. I also suspect that a carrier like DL would be accommodating to a request to shuffle things around, especially if the NW merger comes to fruition.
We all know pretty much whatever Parker said to the press about bankrupcy/liquidation is meaningless because no CEO is going to come out and announce his/her business is going under until the day it actually happens. They might (and Parker did) say something like we are in trouble and it justifies all the BS surcharges and fees they are charging.
Is US in danger of failing? I don't know. However, what I know is Parker and company have done a very good job driving away business and loyal (or shall I say former) travelers with their recent changes and that probably translate into significant decrease in revenue and any potential profits.
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Not so fast
Knowing his track record, I have confidence in that statement but this being the airline industry you can never be sure, which is why I detect some cockiness in that statement As I have said there is no agreement even by the experts. The financal anyalst and consultants who actually work in the industry disagree about US's chance's of survival. So no matter how much you hate them, they might be around(Perish the thought for some of you right?).
I think it is interesting that the newspaper did not ask him any questions (or at least publish his answers to them) about the ongoing dispute with the pilots regarding the fuel issue.
I also think his answer about US not going anywhere and that there will be six major airlines, albeit smaller, is very interesting because this is basically a reverse course on mergers and that doesn't make sense to me from a business standpoint. The benefit to smaller airlines merging is that they spread their fixed costs across a larger organization and thereby are better diversified. This industry would still seem ripe for consolidation, because two airlines could get rid of all unprofitable flying but still operate major hub operations in twice as many places.
I think his tone in this article is somewhat telling of trouble ahead.
Location: Arizona, the home of the airline everyone love to hate(lol)
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Need to see the bigger picture
Quote:
Originally Posted by lucyinthesky
This guy is really becoming hillarious. He fed the exact same lines to the "editorial board" of the Arizona Republic last week, published last Sunday.
US is "going under", and they are so far into it that the outcome is guaranteed.
His problem is that he made flying miserable, destroyed the US brand, and disconnected from his employees/customers/competitors beginning two years ago...LONG before the price of oil went above $70/barrel.
He just cannot seem to ever acknowledge facts including the one of just how dead US is...and he, versus oil, is the killer. That will be clear to all observers, even the apologists, within 120 days of the death.
As so many people on here and elsewhere have said, they will be gone by December probably and March at the latest. I feel really bad for the employees.
Emphasis on business customers, you're assuming that all segments care as much. Again, they have made strides in important areas which you haters don't seem to acknowledge Eff . I can do without the IFE because first they never show anything I like and second reading or music is my perferred method of entertainment. Time willl tell if your rant is true or just a product vitrolic hatred Prices need to rise and certain people won't fly. It is not absolute must for everyone. With technologies such as GoToMeeting, I doubt there will be as much business travel at least domestically unless meeting in person is essential Bus travel is already declining across the board Everyone is forgetting that US is not the only one with these fees, so why attack US if you hate those. American the largest is in a heap of trouble, because they spend so much on fuel depsite having a large international persence and despite their conservation efforts ( I wonder if they have looked at other factors such as their aging fleet). Therefore, size is not the only determining factor and international footprint are not the only for financial healths. If you read the whole article, even the analyst quoted said Southwest will have difficulty too. However, they have four years to prepare( And even they jumped on the oil speculation bandwagon , despite having made money off of hedges) The US brand was destroyed long before Parker came on the scene. the problem is that some customer from the fromer US, don't like it being AWA in disguise . I flew on them a couple of time and I never had a problem but that was because I flew AWA pre merger a couple of times in 2005 and was used it. It was so good that I was surprised to hear about it troubled past. Then again I'm not picky. I
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Is this what Kenneth Lay said to the employees of Enron, while their investment plans were frozen, so they couldn't sell off their Enron stock?
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