Consolidation = IntegrationBy David F. Carr | Posted 2006-10-02 Print
The struggling airline business sees the merger of US Airways and America West—fueled by enhanced customer-service technology—as a strategy for revenue growth.
Consolidation = Integration
The merger that formed the new US Airways may be a sign of further consolidation among air carriers, which would bring with it the need for information systems integration.
When the US Airways merger was still in its early stages at the beginning of the year, CEO W. Douglas Parker called Delta CEO Gerald Grinstein to discuss adding Delta to the fold. From a technology perspective, US Airways might benefit from absorbing the investments in self-service technology and real-time data integration that Delta made while it was trying to ward off bankruptcy ("Delta's Last Stand," go.baselinemag.com/apro3). But regardless of the value of those technology assets, such a merger, like any other, would also come with its own integration headaches.
The conversation between Parker and Grinstein was initially reported in The Wall Street Journal and later confirmed by US Airways. But it's only one of several possible combinations creating a buzz of speculation in the airline industry.
From a technology perspective, Beery says he has his hands full trying to complete the integration with one other airline and wants to get it finished.
Still, if US Airways should pursue an additional merger, the experience from this one ought to pay off, he says: "First of all, I think it would be a lot of the same—but we would be smarter about it because we did it once."
At A Glance: US Airways Group
Headquarters: 111 W. Rio Salado Pkwy., Tempe, AZ 85281
Phone: (480) 693-0800
Business: Newly merged passenger airline formed by America West, a low-cost carrier, and US Airways, which had gone bankrupt twice since 2001.
Chief Information Officer: Joe Beery
Financials In 2005: The combined revenue of the merger partners was more than $5 billion, but on a consolidated basis the company's net loss was $537 million.
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