How important is the merger between American Airlines and US Airways? Here’s a clue: The official press release announcing the new company may have only one headline — “American Airlines and US Airways to create a premier global carrier—the new American Airlines” — but it has 10 subheads.
That’s impressive. I’ve seen press releases that don’t contain as many words as these subheads do. And, sweet Jesus, read the release itself! How many words is that? [Copies, pastes, runs word count] Wow: 4,658 words. It’s the word-count equivalent of a long, investigative magazine story.
I want to hire whichever PR team members lose their jobs after the merger to write a theoretical press release about a global plague just so I can have something to compare it to. (Ah, so the end of the world gets 12 subheads! I get the math behind this now.)
This was about a much smaller airline kicking the crap out of the larger one and making it his bitch.
Wow, that’s a lot of snark to start off a column. Sorry for that. But I’m just a little perturbed by the grandiose pronouncements about this deal. (The Dallasnews.com coverage is extensive and breathless.) The one headline you really need to know is this: “Business conducts necessary business.”
This was not about creating a $1 billion carrier. This was about a much smaller airline kicking the crap out of the larger one and making it his bitch. This was about American Airlines being vulnerable because it did not adapt. In this world, a place where people become expert travel agents simply by firing up the browser on their smartphones, old-model airlines only work if they’re extremely efficient or massive. AA was neither, and it ultimately had to do whatever US Air said if it wanted to survive.
Now, that doesn’t mean it’s a bad deal. Of course it’s best for American Airlines that this happened. It was necessary to the company’s long-term viability. Everyone except AA CEO Tom Horton admitted this long ago, and he only pushed back long enough to secure himself some cash and a one-year, face-saving temp job as the new company’s chairman.
Already, we’re seeing some people complain about the size of the new company. But the supposed “lack of competition” doesn’t reflect the real world. The example of DFW to Charlotte is given. Right now, I can fly one-way for as low as $279 on US Air or AA. When Southwest takes up that route in April, I’ll be able to fly it for a few bucks cheaper. Low-cost carriers keep the big boys honest now. (As I've noted before, I freelance for American Airlines’ in-flight magazine, and I consult for a Southwest in-flight content company.)
But it didn’t have to be this way for AA. The one subhead to the merger that I would write is this: “AA bends over, says: Thank you sir, may I have another?” The only analysis you need to explain this is Mitchell Schnurman’s video commentary, in which he lays out just how badly AA and Horton screwed up these negotiations and let US Air management win control of the new company.
“There will be lots of celebrating,” Schnurman says, “but don’t be drawn in by revisionist history. This is more a takeover than a marriage.”
What that means for passengers in North Texas is that their region will be home to a stronger corporate behemoth, which is cool and all, but it also means it’s more likely that folks you know will lose jobs before people in Phoenix will. Again, it didn’t have to be that way. AA could have been less stubborn and protected its employees better, but here we are. Actually, that’s my second subhead: “Could have been better, but here we are.”
Elsewhere
The scuttlebutt in Austin has been that Rafael “Ranch” Anchia has “missed his window” for higher office, that he didn’t take advantage of his rising profile when he was the hot new name in Texas politics. That has always been absurd analysis, because Anchia’s “star” is tied to his intelligence and passion, not the flavor-of-the-month cycle of political coverage. The latest example is the bill he co-sponsored and filed yesterday, pushing for immigration reform and a path to citizenship.
The entire subtext for this story on Texas Republicans telling Obama to back off is “please tell this uppity Negro he’s getting uppity.”
Jim Schutze has a great tale from a meeting about the South Dallas golf course that turned ugly. Bonus: I’m in the comments!
Retweets
Aw, but everything was going so well there.
Report questions long-term productivity of gas wells in Barnett Shale star-telegram.com/2013/02/12/461… #fracking
— Kate Galbraith (@KateGalbraith) February 14, 2013To quote Jenna Maroney, “Ya burnt!”
Trying to think of an industry where a player with a third the revenue of its rival engineers a successful takeover. Still thinking. #USAA
— Eric Torbenson (@EricTorbenson) February 14, 2013
In this dogfight, US Airways (the one a third the size of AA) wins.
