American Merger: US Airways Ups the Pressure

A nationally recognized reporter, writer, and consumer advocate, Ed Perkins focuses on how travelers can find the best deals and avoid scams.

He is the author of "Online Travel" (2000) and "Business Travel: When It's Your Money" (2004), the first step-by-step guide specifically written for small business and self-employed professional travelers. He was also the co-author of the annual "Best Travel Deals" series from Consumers Union.

Perkins' advice for business travelers is featured on MyBusinessTravel.com, a website devoted to helping small business and self-employed professional travelers find the best value for their travel dollars.

Perkins was founding editor of Consumer Reports Travel Letter, one of the country's most influential travel publications, from which he retired in 1998. He has also written for Business Traveller magazine (London).

Perkins' travel expertise has led to frequent television appearances, including ABC's "Good Morning America" and "This Week with David Brinkley," "The CBS Evening News with Dan Rather," CNN, and numerous local TV and radio stations.

Before editing Consumer Reports Travel Letter, Perkins spent 25 years in travel research and consulting with assignments ranging from national tourism development strategies to the design of computer-based tourism models.

Born in Evanston, Illinois, Perkins lives in Ashland, Oregon with his wife.

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US Airways’ CEO announced this week that his company might just lose interest in its pursuit of American if it has to wait until American comes out of bankruptcy on its own.

This statement just piles a little more pressure on American’s creditors to force the airline into accepting the US Airways merger bid now, not later. US Airways has played this game skillfully, lining up the support of most of American’s unionized labor force and many key creditors.

We’ve previously reported on the various stakeholders’ positions in this corporate chicken game:

US Airways wants an early merger, before American comes out of bankruptcy, because even though it’s the smaller airline, it will clearly emerge as the top dog in a company merged on its terms.

American wants to come out of bankruptcy before it merges because it will have much more leverage in any future merger—with US Airways or some other carrier—and its current executives will get some big-buck bonuses.

Wall Street wants a merger, no matter what.

The US Airways announcement that it might lose interest is almost surely a bluff. You can bet that it will still want a merger, but the terms would be better now than later. Nevertheless, the bluff still raises the odds that its strategy will succeed.

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