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American CEO Wants Airline to Go it Alone

When American emerges from bankruptcy, should it remain an independent airline, or merge with US Airways?

The answer depends on whom you ask.

American’s unions—in particular the pilots union, which will end up with a 13.5 percent stake in the restructured carrier—have come out strongly in favor of merging with US Airways. (US Airways chief Doug Parker will be meeting with American’s pilots next week.)

American’s passengers for the most part dread the prospect of a merger with US Airways, which is widely viewed as a particularly customer-unfriendly operation.

American’s creditors favor a merger as the best route to financial stability.

So, what about American’s management team?

When US Airways made its first merger overtures, American was politely but vehemently opposed.

Although the company’s public pronouncements on the subject would suggest a gradual softening of management’s aversion to a merger, it now appears that at least the company’s top executive, CEO Tom Horton, remains wedded to the idea of a go-it-alone future for American.

According to a story in The Miami Herald, Horton met yesterday with representatives of the pilots union to argue his case for independence and against a merger with US Airways.

His entreaties were in vain. Three hours later, the union reiterated its preference for a merger and, presumably, a change in the airline’s leadership.

The story doesn’t end there, however. No single group will have the final say in American’s future.

The merger scenario remains the most likely outcome, but management’s continued opposition can’t be discounted. Although management’s power to set the direction of a company operating under Chapter 11 bankruptcy is limited, Horton and his cohorts still have a say in determining which road American goes down. The bankruptcy court will have to give their proposal serious consideration.

American’s customers may have few kind words for American’s managers, which after all bear responsibility for the company’s current predicament. But flyers and the airline’s executives are allied in at least one key respect: They both want American to remain independent.

Reader Reality Check

What’s your desired outcome for American: independent airline, or merger partner with US Airways?

This article originally appeared on

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