US Airways' bid for Delta brings uncertainty

Student employee wary of merger but says he'd stick with combined airline

 by Grayson Steinberg
 published on Tuesday, November 28, 2006

Ashley Lowery / THE STATE PRESS
ASU history sophomore Kevin DiFiore works as a US Airways fleet employee at Phoenix Sky Harbor International Airport. He worked for America West Airlines when they merged with US Airways about a year ago. He says the proposed US Airways-Delta Air Lines merger would just be too much.

Kevin DiFiore said he worries mixing Delta Air Lines employees with US Airways workers is a recipe for disaster.
DiFiore, a history sophomore who helps direct planes and load bags for US Airways, opposes a proposed acquisition of bankrupt Delta.
He's already gone through one merger, the 2005 acquisition of US Airways by the former America West Airlines.
Integrating the different workplace cultures of the two airlines has been especially difficult, said DiFiore, who started out two years ago at America West.
"We're still really bitter toward each other," he said.
US Airways, based in Tempe, made an $8 billion cash and stock bid for Delta earlier this month.
The goal is to create a combined airline under the Delta name that would serve more than 350 destinations on five continents and become the dominant airline at more than 100 airports, said US Airways spokeswoman Michelle Mohr.
"You need to strike while the iron is hot, and the time was right for this," Mohr said.
Mohr said she didn't yet know if the combined airline would be based in Tempe or Atlanta, where Delta is headquartered.
"Regardless of headquarters location, the combined airline would have a strong presence in both cities," she said.
Delta has rejected the offer because it hopes to remain an independent company when it emerges from bankruptcy next year, CEO Jerry Grinstein said in a memo to employees.
"I've said before and continue to believe that the history of mergers in the airline industry is almost always one of failure, with overpromise of synergies and underdelivery of results," Grinstein wrote.
But US Airways will continue to push for the merger because of the potential benefits, which also include more than $1 billion in cost savings, Mohr said.
If the merger with Delta goes through, passengers won't see much of a change in service, said Bill McCurry, chairman of the Aeronautical Management Technology Department at ASU's Polytechnic campus.
"Both operations are certainly safe," McCurry said. "Delta has an outstanding name in the industry."
But employees might face layoffs because the two airlines wouldn't need all the people or aircraft both currently have, he said.
Mohr said the company doesn't plan any layoffs under the proposed merger, but they might occur under labor agreements between union-represented employees.
Since DiFiore works out of Sky Harbor International Airport, he said he wasn't worried about losing his job because Phoenix would likely remain a major hub.
Workers like DiFiore might actually get a raise because part of the agreement involves moving employees to the highest of the two pay scales in their respective groups, Mohr said.
But DiFiore said he is concerned about rising fares due to less airline competition if the merger went through.
This would make it harder for the acquisition to get approval, he added.
"I don't think other airlines would let it happen," DiFiore said.
US Airways can't speculate on what would happen to fares under a merger, Mohr said.
But under the combination with America West, some fares have been lowered by up to 37 percent, she added.
Professional flight sophomore Matt Bell said fares under a merger with Delta could actually decrease on certain routes due to lower operating costs.
Consumers could also benefit from an airline with more unified routes, he said.
"It would make it easier for people to get around without having to switch flights," Bell said.
But on other routes, a lack of competition and high fuel costs would drive up ticket prices, he said.
If the merger does happen, DiFiore plans to remain with the company because any negative effects won't immediately be apparent.
"The merger [with US Airways] didn't happen overnight," he said.
Reach the reporter at: grayson.steinberg@asu.edu.




Copyright 2001-06, ASU Web Devil. All rights reserved. No reprints without permission.

Online Editor In Chief: Jolie McCullough | Online Adviser: Jason Manning | Technical Contact: Jason Wulf

Contact Info | Privacy Policy