Would Miami benefit from American Airlines merger?

http://www.miamiherald.com/2012/05/21/2821589/would-miami-benefit-from-american.html

Airlines and experts say Miami is likely to remain an important hub for American Airlines, whether it exits bankruptcy solo or merges with another carrier.

BY HANNAH SAMPSON
HSAMPSON@MIAMIHERALD.COM
As the future of American Airlines hangs in the balance, employees, passengers and the communities the airline serves are waiting to see how bankruptcy will change one of Miami-Dade County’s largest private employers.

Amid that uncertainty, aggressive attempts at a merger from the smaller but profitable competitor US Airways have added a new wrinkle to the what-if scenarios.

The parent company of American, AMR Corp., is seeking to cut labor costs by tossing employee contracts where no agreement has been reached. Closing arguments in U.S. bankruptcy court wrapped up Friday; a judge said he expects to rule by June 22.

American Airlines, which filed for bankruptcy in November along with AMR, has repeatedly said it wants to exit bankruptcy protection as a stand-alone company, but US Airways has forged agreements with labor unions representing American’s pilots, flight attendants and mechanics and fleet service workers in an effort to pursue a merger.

While American has agreed to look at potential consolidation scenarios, the airline says that agreement doesn’t mean the company intends to merge. And analysts say other suitors could still potentially come forward.

Experts say that if Fort Worth, Texas-based American Airlines joins forces with any other airline, some outcomes would be certain: Employees would still lose their jobs, airfares would rise, frequent flier programs would continue to exist — and Miami would remain a crucial hub.

Beyond that, it’s still unclear how American, which carries nearly 70 percent of the traffic at Miami International Airport, would change or how any changes would affect the region.

American has proposed laying off about 13,000 employees, but hasn’t said how specific communities would be affected; the airline employs nearly 88,000 full- and part-time workers worldwide and about 9,000 in South Florida.

A lawyer for the Transport Workers Union estimated that of the more than 4,000 fleet service workers expected to lose their jobs, about 1,000 in South Florida could be affected by layoffs and shifts of more senior workers to Miami.

An agreement between American and some TWU groups would save about 1,300 fleet service jobs nationally; US Airways’ proposal calls for saving another 1,000. Mark Richard, the attorney representing TWU, said Miami would benefit from the preservation of those jobs.

Local airports and the Beacon Council, Miami-Dade’s economic development partnership, say it’s too early to guess what could be in store.

“There’s a lot of speculation,” said Frank Nero, the Beacon Council’s president and CEO. “Miami would shrink, Miami would grow, Miami would do this. There’s 100 different scenarios, and so it’s pretty hard to do any studies without knowing what to base the study on.”

US Airways, based in Tempe, Ariz., has a relatively light flight schedule from South Florida. At MIA, the airline carries about 2 percent of the traffic, with seven daily flights to and from Charlotte and three a day between Miami and Philadelphia.

“We don’t expect any substantial changes if the merger occurs because our traffic is driven largely by the Miami market and not by the airlines serving it,” said Greg Chin, an airport spokesman.

In Broward, US Airways has a slightly larger presence, carrying about 8 percent of traffic at Fort Lauderdale-Hollywood International Airport in April, or 17 daily flights, compared to American’s nearly 5 percent.

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