Landing a mega-merger: The last days of US Airways

Over the past 15 years in the United States, a burst of airline mergers has created a group of mega-airlines, including American, that rank as four of the world’s five largest by passengers carried. But combining airlines has proved difficult and at times created fresh complications for harried travelers. While some of the mergers have worked well, others — particularly between United and Continental — have required constant triage, resulting in tech malfunctions and recurring, headache-inducing delays and flight cancellations.

That’s why, for US Airways, its last phase as a company might also be its most important.

Mergers in the airline industry are particularly tricky, experts say, because they require a stitch-up of complex computer systems and policies — all of which must be done while serving customers without interruption. A problem at just one airport can ripple across the nation.

“Putting everything together can be a nightmare,” said Michael Boyd, president of Boyd Group International, an aviation consulting firm.

U.S. airline mergers since 2000

On paper, US Airways and American

merged two years ago — in an $11 billion deal that would create a stronger rival to United and Delta. But Oct. 17 is the date for what they call the true “integration” — the point at which reservations systems are fused and US Airways ceases to operate its own subsidiary airline. If all goes well, customers will only notice the new airport signage, with all US Airways logos peeled away. But the last time US Airways tried this — in 2007, with America West — there was full-on bedlam: Kiosks of the merged airlines couldn’t communicate, and lines snaked across terminals. In Charlotte, frantic employees handed out sheets of paper reading, “Please go home and try to get a seat on a later flight,” according to news accounts from the time.

Officials at American say they’ve prepared nearly two years for this day. For the sake of consistency, they’ve tweaked nearly 500 US Airways policies. (US Airways didn’t allow checked pets; soon it will. It didn’t allow unaccompanied minors to make connections; now it does.) They’ve combined frequent flier programs. US Airways switched into the ­Oneworld alliance, a group of cooperating global airlines that already included American. Particularly over the past year, US Airways has handed off bits and parts of its operation to American’s headquarters while shuttering its Twitter account, which now reads, “Please follow @AmericanAir for updates and customer support.”

“I tell people, we’re engaged but not married,” said Amy Mason, a US Airways customer service supervisor in Charlotte. “On October 17, we’ll be married.”

While in wind-down mode, US Airways remains something of a weird half-airline. It’s possible to buy a flight on AA.com, check in at a US Airways kiosk and board a plane painted in US Airways colors. In your seat pocket, you’ll get an American Airlines safety card, an American Airlines magazine and a US Airways “Marketplace” menu. The flight attendant might wear an American Airlines lanyard but pass out coffee with US Airways sugar packets.

But the airlines are still distinctly separate. For now, if you buy an American flight but want to travel standby on a US Airways flight, US Airways customer service agents can’t make it happen.

“I’m trying to help you,” says one agent in Charlotte on a recent afternoon. She wears a US Airways shirt and stands in front of a “Customer Service” sign in the American font. She says she works for US Airways.

She gets on the phone with a central American reservations desk and pleads for help.

“Enter flow segment?” she says with uncertainty into the phone, the start of a 10-minute conversation.

She punches some figures into the computer.

Clack clack clack clack clack.

“Oh god, that doesn’t look right.”

Clack clack clack clack clack.

“Sorry, I can’t do anything,” she says after hanging up. “You’d have to call American. We can’t touch it. It’s their flight record.”

She tries to offer a smile.

“We’re still separate airlines,” she says. “A few more weeks and we’ll be golden.”

‘So many moving parts’

The change, come Oct. 17, will be most profound at the US Airways hubs — Phoenix Sky Harbor International, Philadelphia International, Reagan National and Charlotte Douglas International. In Charlotte, the nation’s eighth-busiest airport, 90 percent of passengers fly US Airways. Roughly 4 in 5 passengers who travel through Charlotte connect to another flight, meaning the operations at this airport, more so than most hubs, can determine whether Americans on any given day travel smoothly.

The US Airways manager in charge of the transition in Charlotte, Erin Frey, 44, describes an elaborate affair in which nearly every part of the airport has to change. She needs new stock paper for tickets. New automated scanners. New technology for routing baggage on its long journey through the bowels of the terminal.

“So many moving parts that people will never notice,” said Frey, who has worked for the airline since 1997. “It’s like when you’re going to see a play. So much is going on behind the curtains. But when you pull up the curtains, customers just get to see the product.”

In a deep, windowless section of the airport accessible only to employees, US Airways holds daily classes, from 6 a.m. until midnight, for ticket agents who must re­learn much of how they operate. On this day, 17 employees sit at a bank of computers, leafing through the instructions in a 493-page manual. Some have diet sodas or Red Bulls next to their keyboards. During lulls, the instructor passes out Swedish Fish. Several American Airlines posters on the classroom walls show smiling employees and read, “Are you ready? I am.”

“Okay, turn to Page 409,” the teacher, Rosalyn Braxton, says.

The agents have to practice a few ticketing scenarios using the American system.

Scenario No. 6: Dawn Gober would like a window seat.

Scenario No. 10: Kathy Hains would like an aisle seat and is traveling with a lithium battery operated wheelchair.

Scenario No. 23: Robert Isom is an armed FBI agent. His badge number is 75864.

“They haven’t even given us the hard stuff yet,” says Alexandra Case, one agent in the classroom. “In the real world it’s like, ‘Hey, I’m 6-foot-2, and I need an exit row.’ And your exit rows are all gone. So how are you going to manipulate that?”

Airlines are sometimes called tech companies with wings, and for years, US Airways has used a reservations system called Shares that is the heart of its operations. American has used a system called Sabre. They are alike in the manner of a PC and a Mac: They accomplish similar objectives but come with their own jargon and shortcuts.

To reduce the odds of a frantic Oct. 17, US Airways since July has gradually moved its reservations into the American system, rather than doing a complete transfer overnight. This “drain-down,” as officials call it, follows the model used by Delta in a smooth merger with Northwest.

The most challenging mergers — including United-Continental and America West-US Airways — have come when the surviving airline adopted the reservations system of the smaller airline. Meaning the majority of employees, rather than the minority, had to learn something new. Since the merger with Continental in 2010, United has had at least five major computer malfunctions. In 2013, the airline was fined for taking too long to respond to refund requests, something it blamed on merger-related tech issues.

“We knew we needed to take the larger carrier’s system,” said Kerry Philipovitch, the American Airlines senior vice president of customer experience. “It wasn’t even a consideration.”

Ill-fated strategies

Employees at US Airways say it’s only fitting that the airline’s send-off caps a tumultuous era of aviation mergers.

US Airways, starting from the 1980s, was an emblem for mismanagement of the industry. The airline, then known as ­USAir, was notorious for high fares, and its main goal was to expand market share rather than establish financially viable routes. It grew, foremost, through mergers. With Pacific Southwest in 1987 and with Piedmont several months later. In the early 1990s, it assumed a series of Eastern Seaboard shuttle routes by buying the remains of an airline operated by Donald Trump. Eventually, the airline amassed an impressive list of cross-country and international routes. But all of its hubs were concentrated in the mid-Atlantic.

“I think at that time the issues were survival and dealing with the short-term issues of controlling the cost level,” Edwin ­Colodny, the airline’s chief executive from 1975 until 1991, said in a telephone interview from his home in Burlington, Vt. “That, and keeping the head above water.”

The airline, sapped by some of the industry’s highest labor costs, zigzagged in the 1990s between ill-fated strategies to raise profits. In a single day, it ordered 400 new Airbus jets. It started a low-cost operation, MetroJet, that was designed to compete with Southwest but ended up cannibalizing its own business. It failed in a merger with United. After 9/11, US Airways was hit particularly hard, because it depended on National, which was closed for several weeks. It was losing $3 million a day, precipitating a slide into bankruptcy. The restructuring was quick and incomplete. In 2004, it filed for Chapter 11 bankruptcy protection again.

Then, along came America West.

Despite the technical problems that ensued, the merger made sense, industry experts say, and helped finally turn around the airline. US Airways trimmed some of its East Coast hubs and gained a foothold in Phoenix. And although the new airline kept the US Airways name, America West’s executives, including chief executive Doug Parker, filled all the top positions.

And it was those same executives who, starting in 2011, reached out to American Airlines’ creditors as it, too, was emerging from bankruptcy protection. Today, Parker runs American Airlines.

“Really, US Airways took over American,” Boyd, the consultant, said. “It’s just that they kept the American name.”

The disappearance of US Airways will be marked with only a little symbolism. The final red-eye will be given the flight number US 1939, in tribute to year the company began operations as All American Aviation. Before hitting San Francisco, the plane will have headed through Philadelphia, Charlotte and Phoenix — the majority of the airline’s hubs. But some employees say they’ve learned to have little nostalgia.

Asked about the merger on a recent US Airways flight, one flight attendant chuckled.

“I’m from Piedmont. Started in 1978,” she said. “Five mergers later, here I am.”

An earlier version of this article used the incorrect flight number for the airline’s final red-eye. This version has been corrected.

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