- The Washington Times - Monday, July 3, 2000

Questions about the proposed $4.3 billion merger between Arlington-based US Airways Group Inc. and UAL Corp.'sUnited are piling up faster than answers.
Congress, though it has no direct control over the proposed merger, is poring over its details amid growing concern that such a big company would have too much power. Consumer groups are skeptical that the merger won't lead to a monopoly and drive up prices, and rumors are now circulating that other airline mergers are in the works.
But Christopher D. Bowers, senior vice president for the North America division at United, insists that the union benefits everyone.
Mr. Bowers has been traveling the country in the last two weeks trying to convince the skeptics that this marriage should go forward.
Here's what he told The Washington Times:
Question: Could you give a snapshot overview of what this merger is about?
Answer: We did this because our customers have been telling us for some time that we needed to broaden our destinations and services in the East. We believe that the complement of US Air to United is pro-consumer because what it does is open up for the the consumers a multiplicity of destinations with one carrier that they haven't enjoyed before. In addition, we are committed to increasing service in a number of communities, once the deal goes through.
Q: In terms of DC Air, this has been called a sweetheart deal. Isn't it unusual to have the buyer already when you announce the bigger deal?
A: I wasn't involved at the table when those talks were taking place, so I am not briefed on that.
Q: Are you meeting a lot of resistance against the merger?
A: I am not meeting a lot of resistance to the contrary. I have been to Pittsburgh, Boston, and have visited some congressmen here, and will see some more.
I don't think it's resistance. I think instead what we are getting are a lot of questions. And those questions are very fair. I don't think anyone expects that you just walk in and do these kinds of deals. There has never been anything done like this in the transportation industry before. And so, we should be able to address all those questions and concerns.
We are happy to go and sit down and we would rather sit down and address these concerns and answer the questions straight away so that there isn't a feeling of 'My Gosh, what's going to happen to the maintenance services, to the employee base? What's going to happen to facilities?' So we can go out and address these very specifically.
Q: Are you surprised by the amount of questions and concerns being expressed about this merger?
A: Who knows? I think instead I would answer by saying we expected to get scrutinized very closely by everyone. And again, I believe we are prepared to do that.
So did we expect this much? Well, we fully expected going into this that it would take a number of months to go through the process, and to address the issues. And I think right now we feel we are doing it.
Q: When do you expect the merger will be finalized?
A: We would like well, we are working very hard to see if we can get some sort of resolution this year. But again, the process has a life of its own, and I don't think you can put deadlines out that doesn't make sense.
But we are trying to make everything available for the folks here in Washington, to the Attorney General, and anyone else to try and see it we can get some decision by the end of the year.
Q: Your suggested merger comes at a strange time considering what's going on with Microsoft. How do you think that will affect your deal?
A: Well, but you know what happens with any deal. The deal is the deal and the deal itself doesn't have any timing per se when you really want to get the thing done or not. When you think about the negotiations between us and US Air, they take a certain amount of time, and you can't really rush them.
But who knew. I mean, in our business, and for our company, opportunities like these don't come up very often. And, we have to seize the opportunity at the time and recognizing there is a whole lot of noise around you, you have to focus on your issues as they relate to the other company that you are acquiring. And try and get people to focus on the merits or the issues that surround ours. Hopefully, everything else going on around us well, certainly, we can't be ignorant about it but again, try and focus the attention on our specifics.
Q: In terms of labor unions, there are concerns your pilots and employees will have problems with the integration. How are you going to handle that?
A: Well, we have always stated that we have no intentions of aggregating any of the internal contracts. And we will work with our unions to address their issues.
And as you would expect, we have as much to do internally to demonstrate to the employees the long-term benefits of this as it relates to their future, and their potential in the company. And we are in the process of doing that.
As you would expect, we are having discussions with the unions on our side of the house, to make sure they fully understand how the deal is done.
Interestingly enough, the unions for the most part have said they understand what the deal is all all about. If you take a look at our industry, the status quo is unacceptable. We are in a very dynamic business, and we simply couldn't stand by and do nothing. We had to move. And this is the most logical move for us, because it addresses a geographical hole in the United States. And as you take a look at that, as to long-term potential for the company, we are financially strong, this adds a huge base for us.
Q: You have said you will freeze the current base fares. But those base fares are pretty high. How can you guarantee prices won't go up when the base fare is so high?
A: Well, everything falls from that structured base fare. If you freeze the fare at the base level, everything is a discount from that level. So as long as you hold that firm …
Q: But will that change?
A: The marketplace decides the fares. And by that I mean your competitor decides to do something, or the traffic doesn't stay with you because it's too expensive and they go some other way. So the marketplace really dictates the fares. What we said is we will not increase the structured base fares.



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