Employee perspective on US/HP Merger

Old May 10, 05, 10:56 pm
  #1  
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Employee perspective on US/HP Merger

As a HP employee I will throw my 2 cents by stating I really cannot figure out why HP would ever get into bed with US especially considering their huge debt load (US alone owes the gov. over 700 million in loans, while HP owes over 300 million, the 2 combined would be over 1 billion). US for some time now has been on life support while bleeding red financially. My fear is that if a merger goes through, USAIR employees will merge their "baggage" into the new merged company. The moral with US employees must be at all time low considering that most of their employees have taken pay cuts, having their pensions stripped away, and paying more for health care coverage; not to mention their image took a beating during the Christmas/New Year holiday rush with luggage issues. In order for a merged US to be successful, US need to get their operational and labor cost at HP level. I think Doug Parker will not allow the merger proceed until US can get this under control. I just can't imagine US try to ask their employees more wage concessions so they can match labor and operational cost with HP. The bottom line is if a new lowcost USAIR is to be competive especially with WN along with Jetblue and Airtran, getting their operational cost down to HP level will be the cornerstone to making US successful.

I certainly hope Doug Parker meant his word when he said would not take a risk on merger if did not benefit HP as a whole including shareholders and employees. Doug has said their is too much capacity and low yields and there needs to be a shakeup by either consolidation or a couple of airlines going out of business all together. I hope he knows what he is saying. 5 years ago, HP was running a ****ty airline, but HP and its employees have really put 110% effort into turning the company around. No, we are not perfect and there is always room for improvement. But HP is doing something right if we were the only few carriers to turn a profit during 1st qtr. The rumor mill is that Doug Parker would most likely stay on as CEO. Doug has a favorable relationship with most employees. I heard (through rumor mill) that a new merged US would retain headquarters in PHX (Tempe) due to lower cost than Arlington. I am sure the state of Arizona or City of PHX or Tempe may give incentive for staying in AZ. I think the big issue with employees is the intergration with seniority especially with crewmembers. For ground employees (gate and ticket agents, ramp workers, reservations) I do not think that should be much of an issue. USair is mostly on the east while HP on west. Some of HP field stations opertations on the east coast are contracted with CO. While US field stations on the west is few so intergrating those employees should not be much trouble.

I thought perhaps US/HP should start out as codeshare partners rather than merger. CO/NW/DL codeshare arrangements seems to be working for them without the headaches of a merger. However in reality it would not benefit US since they already have UA with a larger network.

By the way, senior management at HP is keeping a tight lid on any merger deal. They do want to have something announced by next week May 16 or 17th at the HP meeting so we'll see.
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Old May 10, 05, 11:12 pm
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Originally Posted by skyfly
As a HP employee I will throw my 2 cents by stating I really cannot figure out why HP would ever get into bed with US especially considering their huge debt load (US alone owes the gov. over 700 million in loans, while HP owes over 300 million, the 2 combined would be over 1 billion). US for some time now has been on life support while bleeding red financially. My fear is that if a merger goes through, USAIR employees will merge their "baggage" into the new merged company. The moral with US employees must be at all time low considering that most of their employees have taken pay cuts, having their pensions stripped away, and paying more for health care coverage; not to mention their image took a beating during the Christmas/New Year holiday rush with luggage issues. In order for a merged US to be successful, US need to get their operational and labor cost at HP level. I think Doug Parker will not allow the merger proceed until US can get this under control. I just can't imagine US try to ask their employees more wage concessions so they can match labor and operational cost with HP. The bottom line is if a new lowcost USAIR is to be competive especially with WN along with Jetblue and Airtran, getting their operational cost down to HP level will be the cornerstone to making US successful.

I certainly hope Doug Parker meant his word when he said would not take a risk on merger if did not benefit HP as a whole including shareholders and employees. Doug has said their is too much capacity and low yields and there needs to be a shakeup by either consolidation or a couple of airlines going out of business all together. I hope he knows what he is saying. 5 years ago, HP was running a ****ty airline, but HP and its employees have really put 110% effort into turning the company around. No, we are not perfect and there is always room for improvement. But HP is doing something right if we were the only few carriers to turn a profit during 1st qtr. The rumor mill is that Doug Parker would most likely stay on as CEO. Doug has a favorable relationship with most employees. I heard (through rumor mill) that a new merged US would retain headquarters in PHX (Tempe) due to lower cost than Arlington. I am sure the state of Arizona or City of PHX or Tempe may give incentive for staying in AZ. I think the big issue with employees is the intergration with seniority especially with crewmembers. For ground employees (gate and ticket agents, ramp workers, reservations) I do not think that should be much of an issue. USair is mostly on the east while HP on west. Some of HP field stations opertations on the east coast are contracted with CO. While US field stations on the west is few so intergrating those employees should not be much trouble.

I thought perhaps US/HP should start out as codeshare partners rather than merger. CO/NW/DL codeshare arrangements seems to be working for them without the headaches of a merger. However in reality it would not benefit US since they already have UA with a larger network.

By the way, senior management at HP is keeping a tight lid on any merger deal. They do want to have something announced by next week May 16 or 17th at the HP meeting so we'll see.
Skyfly, Thank you. Your comments are great and should be sent to USA Today or the Wall Street Journal.
As a business flyer who spends over $30,000/year flying HP I do it because of dedicated people like you(and not for the food in first class).I could see Franke making a stupid decission like this, however I have a lot of respect for Doug Parker and I cannot see him completing these merger talks.This would be a course to destruction for HP. If the merger happens, I will shift my business to other carriers.
To you and the other dedicated employees of HP, please keep your spirits high.
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Old May 11, 05, 7:28 am
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Originally Posted by 360guy
(and not for the food in first class).
Oh you know you like it!!!

Lance
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Old May 11, 05, 9:02 am
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Originally Posted by 360guy
Skyfly, Thank you. Your comments are great and should be sent to USA Today or the Wall Street Journal.
As a business flyer who spends over $30,000/year flying HP I do it because of dedicated people like you(and not for the food in first class).I could see Franke making a stupid decission like this, however I have a lot of respect for Doug Parker and I cannot see him completing these merger talks.This would be a course to destruction for HP. If the merger happens, I will shift my business to other carriers.
To you and the other dedicated employees of HP, please keep your spirits high.
Ditto. We need more employees like yourself offering feedback on this board. And, I couldn't agree more with your commentary re: merging the problems with US into HP.
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Old May 11, 05, 9:11 am
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Originally Posted by AgtMulder
Ditto. We need more employees like yourself offering feedback on this board. And, I couldn't agree more with your commentary re: merging the problems with US into HP.
From a Reservations standpoint, agents have come to me concerned that this merger would not be good. US has outsourced most of their reservations call centers to outside the US. They have centers in Mexico City, El Sanvador and the Phillipines to go along with their center in the US (Winston-Salem I believe!).
I just tell them that we are in good hands with Hp management and they will not do anything that has not been thought through to the fullest degree. As a five year employee in Reservations, I can say that I am proud of the company I work for. No, we are not perfect but we are MUCH improved over where we were five years ago.
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Old May 11, 05, 9:19 am
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[QUOTE=skyfly]As a HP employee I will throw my 2 cents by stating I really cannot figure out why HP would ever get into bed with US especially considering their huge debt load (US alone owes the gov. over 700 million in loans, while HP owes over 300 million, the 2 combined would be over 1 billion). US for some time now has been on life support while bleeding red financially. My fear is that if a merger goes through, USAIR employees will merge their "baggage" into the new merged company. The moral with US employees must be at all time low considering that most of their employees have taken pay cuts, having their pensions stripped away, and paying more for health care coverage; not to mention their image took a beating during the Christmas/New Year holiday rush with luggage issues. In order for a merged US to be successful, US need to get their operational and labor cost at HP level. I think Doug Parker will not allow the merger proceed until US can get this under control. I just can't imagine US try to ask their employees more wage concessions so they can match labor and operational cost with HP. The bottom line is if a new lowcost USAIR is to be competive especially with WN along with Jetblue and Airtran, getting their operational cost down to HP level will be the cornerstone to making US successful.
QUOTE]

I'm not an airline employee, just a guy who lives two miles from US's corporate headquarters, whose family lives in Scottsdale, and who went to school at ASU... long before HP had a corporate headquarters building of its own. I do fly US and HP a lot, the former for east coast travel and the latter for my trips to see the family in the Phoenix area and to Vegas to, uh, well, the same reason everyone goes there.

The only reason I can see for HP to do this deal is to take advantage of US's east coast presence; for instance, right now I wouldn't take HP to Cancun because it would require flying DC to PHX to CUN... US has DC to Charlotte (or Philly) to CUN. But like you say, someone's going to have to show US how to be a successful carrier... and if you check the fares right now, you'll see that US is nothing near a low-cost carrier... I was looking today for a booking from DC to Vegas and found UA at $235, NW at $275, HP at $414 and US at $500... maybe HP should merge with UA instead.
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Old May 11, 05, 1:53 pm
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I am not sure that I would even agree to a codeshare until US gets its house in order. US has a storied history with primarily negative stories (with the exception of Piedmont and PSA Airlines). Certainly, Allegheny Airlines (predecessor to USAir) was called "Agony" for a reason. USAir dropped a lot of the routes of Piedmont and PSA, after seriously building up on the West Coast. Except for a few good years in the 90's, I was never enthralled by US Air (poor operations with a lot of excuses).

HP should run away -- VERY FAST -- from this merger. The only way that I would agree to this is if you could negate all the contracts and decide which US employees to hire. Plus, the labor cost would have to be very similar!
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Old May 11, 05, 2:58 pm
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Buy US' Caribbean routes and move away from merger talks, STAT!
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Old May 12, 05, 10:24 pm
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Originally Posted by olympicnut
Buy US' Caribbean routes and move away from merger talks, STAT!
This makes no sense without US's feed in PHL and CLT (especially CLT).
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Old May 12, 05, 11:53 pm
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The only thing I am clinging to during this period is Doug Parker's promise he would do nothing to harm the employees and the stockholders. He has not lied to us in the past, and that is what I am pinning my hopes on.

To be honest, I would be perfectly happy staying little ole America West.
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Old May 13, 05, 7:45 am
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Originally Posted by hp_fa
To be honest, I would be perfectly happy staying little ole America West.
And taking over FlyI and waiting until US ends up in the junk heap! This would give us our East Coast presence that we need. Comments on this?
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Old May 13, 05, 10:56 am
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Originally Posted by snokums925
And taking over FlyI and waiting until US ends up in the junk heap! This would give us our East Coast presence that we need. Comments on this?

FlyI's costs are significantly higher than US' costs. Furthermore, FlyI is mostly RJs -- is that what made up HP's failed Columbus hub?
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Old May 13, 05, 11:24 am
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Red face

Originally Posted by USFlyerUS
This makes no sense without US's feed in PHL and CLT (especially CLT).
I agree. PHL and CLT wouldn't be enough O&D to make the Caribbean routes profitable, especially CLT. You would need some feeder traffic.
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Old May 14, 05, 10:31 am
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Originally Posted by skyfly
Five years ago, HP was running a ****ty airline, but HP and its employees have really put 110% effort into turning the company around. No, we are not perfect and there is always room for improvement. But HP is doing something right if we were the only few carriers to turn a profit during 1st qtr.
Skyfly, I too thank you for your comments and believe you are absolutely right! I have not been on HP in 12 months or so because my current client base isn't where you fly, but I flew HP extensively 2000-2003 and saw the
improvements firsthand.

HP's people management and employee-empowerment culture is obviously working and there lies the biggest "compatibility challenge" associated with this merger. It's not fleet commonality or route overlap. It's that US employees are at war with their management and frequently (cf. Christmas) with their customers, and you guys are the exact opposite. How do you blend those two cultures -- one of them can-do and ascendant and profitable and more or less cordial to management, the other bitter and burned-out and resigned and enraged at their management?

Cashiering the whole US management team (which I think MUST be a precondition) won't solve the whole problem. You will be bringing aboard thousands of cynical, do-the-minimum senior employees who will think you HP folks are naive patsies for even trying to do a good job.

I am extremely fearful about this merger. I am afraid you will take one good, solid medium-size carrier and one charred, screw-up husk of a mainline carrier and blend them into one big, sloppy, mediocre, who-cares carrier.

I cannot believe the plan is to fly under the US brand. No major brand in American aviation has higher negatives. And, yes, that's among the general public as well as people like us... US Airways is mass-media shorthand for labor unrest, holiday catastrophes, angry and tearful customers, wholesale cancellations, etc. It'd be like Wendy's adopting as its new slogan "Food at your fingertips." The associations are literally stomach-turning.

You can count past successful airline mergers on the fingers of one hand. Most of them result in years of adjustments and minor meltdowns, usually at the expense of the customer base, and they are usually undertaken under more favorable circumstances than those facing HP/US.

I really hope Doug Parker can articulate some good reasons for doing this. I still don't see why HP doesn't just wait for US to drop dead, then grab the east coast slots it wants and maybe rebrand east coast operations as America East. Cheaper, easier, more control for HP, bigger win for HP employees.

This had better not be Parker's ego-driven bid for major-carrier greatness. I am so skeptical about this and worried that hard-working HP employees are about to be "rewarded" by forced mixing with angry and vicious maniacs from the dark side of this industry. My best to you Skyfly.
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Old May 14, 05, 12:22 pm
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Everyone seems to have an opinion so here's mine....

Maybe this will turn out to be the best of all creations in the airline industry in this country! Maybe the US employees, who are bitter as BearX220 stated, are looking for a silver lining with having a management team that actually knows how to run an airline and rewards it's employees appropriately.

There's too much negativity about this merger. We are CUSTOMERS, not the employees. If you dont' like the idea of a HP/US merger there are other airlines that will be happy to take your money and fly you. I look at this as a possible winner for the HP & US customer base.

Maybe is a unique word. There's no telling what is going to happen until it actually happens. And if you don't like the outcome, well maybe you weren't meant to continue to do business with HP/US anymore.

Maybe?!
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