- The Washington Times - Thursday, June 16, 2005

TEMPE, Ariz. — Eleven days after taking over as chief executive of America West Airlines in September 2001, Doug Parker had to abruptly shift his focus from improving the carrier’s poor reputation among customers to fighting for its survival.

The night before the September 11 terrorist attacks, Mr. Parker and his new management team celebrated their plans for the carrier over drinks, only to wake up the next day to find that the ailing airline industry had sunk into deeper turmoil.

After securing a $429 million government bailout loan that probably saved America West from bankruptcy, Mr. Parker succeeded in improving worker morale and changing the Tempe-based airline’s reputation as a carrier that delays flights, loses luggage and leaves customers waiting.

Mr. Parker, 43, now will be tested by America West’s plan to take over Arlington, Va.-based US Airways and stitch together two geographically distinct airlines into one designed to better compete with lower-cost rivals. Analysts say Mr. Parker will face difficulties combining the two carriers’ work forces and capturing an estimated $600 million in savings from the merger.

Even though America West is the acquirer, the US Airways name will survive and be used when the nation’s seventh- and eighth-largest carriers are combined to create the No. 6 airline. Two trips through bankruptcy court reorganizations apparently were not enough to tarnish the more recognizable US Airways name.

“We will leapfrog ourselves from one of these airlines that’s doing OK but still struggling to one that is well-positioned for the future and has the critical mass, I think, to be around forever,” said the gravelly voiced Mr. Parker, who will serve as chief of the combined company.

Under Mr. Parker’s leadership, America West cut costs and overhauled prices, but perhaps his biggest accomplishment was repairing employee morale, which suffered under his predecessor, William Franke.

Many attribute his success to his low-key, genuine manner. Mr. Parker has a reputation for candor, chatting up crews while on flights and eating lunch with pilots between training sessions at the company’s headquarters.

“He is in private what he is in public,” said Bill McGlashen, president of the America West Association of Flight Attendants. “There isn’t a persona change.”

Mr. McGlashen noted that before America West got the first airline bailout loan after the terrorist attacks, Mr. Parker told federal officials he could not ask his employees for concessions and got them instead from vendors.

Some of Mr. Parker’s favorable reputation with employees may be a result of his previous work at unionized airlines, Mr. McGlashen said.

After receiving his master’s degree in business administration from Vanderbilt University in 1986, Mr. Parker worked in a series of management positions at American Airlines before moving to Northwest Airlines in 1991. He spent four years at Northwest as vice president and assistant treasurer and as vice president of financial planning and analysis before he joined America West in 1995 as chief financial officer.

Mr. Parker’s people skills will be needed when confronting the challenge of combining 24,000 US Airways employees with America West’s 14,000. Executives from both airlines said they hope to remove an unspecified number of jobs from the combined company through attrition.

Some America West workers worry that they might end up with less flexible work schedules because employees of the older US Airways would water down the seniority pool. “That will challenge every one of his skills,” said Ray Neidl, an airline analyst for Calyon Securities.

Mr. Parker said critics of the merger haven’t seen all details, which were enough to raise $500 million in equity and another $650 million from partners. Savings will come from stable labor costs and from taking 59 planes out of the combined airline’s fleet, he said.

If the deal happens, America West shareholders will own 45 percent of the combined carrier. The new investors will have a 41 percent stake, and U.S. Airways creditors will own 14 percent. Existing US Airways shareholders are the big losers: Their shares will be worthless.

Michael Roach, a co-founder of America West who now works as an airline consultant, said Mr. Parker is setting out to create a new future for the company, rather than having to react later to changes in the industry.

“I think he and his team are by far the best team that America West has had,” he said.


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