US Airways Group Inc. could learn as early as Friday if its planned merger with America West Airlines will go through without further obstacles.
Tomorrow, shareholders of America West Holdings Co., the airline's parent, are expected to vote on the planned merger at a meeting at the company's Tempe, Ariz. headquarters.
On Thursday, a bankruptcy court judge in Alexandria is expected to hear final comments on US Airways' reorganization plan. The airline has operated under Chapter 11 bankruptcy protection since September 2004, and its plan to emerge now centers on the merger with America West. The hearing could last through Friday, and it will provide a forum for US Airways unions or creditors to voice any remaining objections to the merger.
A 10-day grace period after the hearings would allow any of US Airways' creditors to file formal objections to the plan.
If the merger receives approval from America West shareholders and the bankruptcy court, as industry insiders expect, all that would remain is for the two airlines to finish the paperwork on the deal. The merged airline's first day of operation could come as early as Sept. 27, said J. Scott Kirby, America West's executive vice president of sales and marketing. Kirby is the lead organizer of the merger team.
The new airline will retain the name US Airways and be led mostly by America West executives, including president and chief executive W. Douglas Parker. The merger, announced in May, would create the nation's largest budget airline, with service through much of the U.S. mainland, Hawaii and the Caribbean.
Both airlines cleared their biggest hurdles earlier this summer when the Justice Department and the Air Transportation Stabilization Board, the federal board that holds about $1 billion in loans for both airlines, approved the deal.
In the meantime, the new airline is preparing for the operational equivalent of slight turbulence as it begins merging the functions of two well-established carriers. "On day one, we won't have a completely seamless process across the board. It may take a few weeks," Kirby said. "But we ask our passengers to bear with us."
The airline plans to have extra employees on hand to answer customer queries, including whether they should go to an America West or US Airways gate when they arrive at the airport. Initially, separate schedules and gates will be maintained.
Interim signs that include both the US Airways and America West names will begin going up at airports around the country, including Washington's Reagan National Airport.
Synchronizing the booking capabilities of both airlines' Web sites also will take some time. Kirby said, for example, that for at least several weeks America West frequent fliers hoping to redeem a free trip on a US Airways route would have to call a reservation agent, rather than booking the trip on the Web.
Both airlines said they expect to retain most of the workers based at the three Washington area airports.
Yet it has become increasingly clear that the Washington area will lose all but a handful of the approximately 600 jobs now at the US Airways corporate headquarters in Crystal City.
Kirby said the airline plans to retain only a "small" lobbying office. The number of corporate employees who will remain with the airline, Kirby said, "depends on how many are willing to move to Tempe."
Kirby said the airline plans to heavily market to frequent fliers of both airlines through e-mails as early as Sept. 15. Last week, in an e-mail to frequent fliers, the airlines reminded members that they soon will be able to earn and redeem miles on both airlines and that current US Airways airport club members will have access to the America West clubs in Phoenix and Las Vegas as well as a new club that is being completed at Los Angeles International Airport.
To ease into the merger, the new US Airways will continue to operate in many ways as if it were two separate airlines for about two years. It will take that long, for example, to repaint all planes in their revamped US Airways colors.
Current US Airways mechanics will continue to work on the planes they have serviced in the past, as will current America West mechanics. That will minimize the conflicts and confusion involved in merging separate employee seniority lists, one of the biggest hurdles in an airline merger.
The rationale behind the merger is that the combined airline will have a formidable network. America West is stronger in travel from East Coast to Western destinations such as Las Vegas and Phoenix, while US Airways is focused heavily along the East Coast with hubs in Philadelphia and Charlotte, N.C., as well as its New York and Boston shuttles.
But industry analysts said the new US Airways is debuting at a difficult time. Fuel prices are reaching record highs, and the industry is entering its weaker fall and winter travel periods.
Michael Boyd, who leads the Boyd Group, an Evergreen, Colo.-based aviation consulting firm, said executives of the airline may have to trim its routes along the East Coast to keep costs down. Boyd said the East Coast has become dominated by low-fare, low-cost carrier such as Southwest, Air Tran and JetBlue.
"They have to recast what they're doing on the East Coast because it doesn't work any more," Boyd said. "They have to shove more of their flights to feed their East to West traffic and less flights between North to South traffic."
Kirby said the airline does not plan on eliminating any destinations beyond the 12 to 13 percent flight reduction that it announced earlier this summer.
But he said the airline is considering eliminating some of its less popular flights, such as those early in the morning or late at night, particularly between September and December.
"There are no drastic changes in the business plans that we have already filed," Kirby said.