American and US Airways map merger integration process

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American Airlines and US Airways executives have mapped a five-step process for their multi-year merger integration that they hope to complete by 2015.

Bev Goulet, senior vice-president and chief integration officer at American, and Robert Isom, chief operating officer at US Airways and joint leader of the merger integration officer with Goulet, say that the airlines are currently in the planning phase of the $11 billion combination that was announced in February, at a media event in Tempe, Arizona, on 24 April.

The planning phase includes numerous gap analyses, joint signage at airports, training of front line employees on each other's policies and crafting a single crisis management plan, says Isom. This will continue until the deal closes, which is expected to occur in the late third quarter.

"Try to simplify," says Isom on the carriers' approach to the integration. "[We'll] do things first to integrate as seamlessly as possible, then really try to run and optimise from there."

He adds that other airlines have "stumbled a bit" during their own mergers when they tried to optimise as they integrated.

Later phases of the integration are split into: post-close (including codesharing, combining headquarters functions and systems decisions), the first six months (swapping aircraft, frequent flier programme alignment and harmonising small items such as beverage services), functional integration about a year after the deal closes (combining operations and systems, moving to a single website and aligning manuals and procedures), and finally the post-single operating certificate phase where they begin operating as one airline, according to Goulet and Isom's presentation.

Asked if the carriers are drawing from the example of past mergers, Isom says that one thing that they are drawing on is US Airways' experience merging America West Airlines and US Airways in 2005.

"Doug [Parker] and Scott [Kirby] suggested that we write lessons learned down on paper, everything that we did right and wrong, and we got it down in a fashion that was usable for future," he says.

American and US Airways' joint merger integration office is supported by 29 planning teams that will actually execute the merger, say Goulet and Isom.

US Airways will stay in the Star Alliance until after the merger closes. Isom says that there is a detailed plan for the airline to exit Star and join Oneworld, however they do not plan to determine a timeline until after the deal closes.

The AMR name and stock ticker will disappear along with the US Airways name as the companies combine operations, says Doug Parker, chairman and chief executive of US Airways and future chief executive of American. He says that it will probably be replaced with "something like AAL" for stock purposes.

American and US Airways still need US Department of Justice (DOJ) antitrust approval as well as ones from the European Union and US Airways shareholders before the deal can close. They have received approval from Canadian and Brazilian regulators, and American from the US bankruptcy court.