US Airways — Merger or Acquisition (April 2013)
19 slides from US Airways's merger presentation, Apr 25, 2013
Slide 1: Additional Information and Where to Find It
Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed merger transaction between AMR Corporation (“AMR”) and US Airways Group, Inc. (“US Airways
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,”
Slide 3: Stakeholders Recognize Value Creation
Stakeholders Recognize Value Creation Indexed Price Performance Since Bankruptcy Filing % Return 700 600 500 400 300 200 100 0 American 6.25% Notes: +474.8% LCC: +281.7% AAMRQ: +140.1% Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 US Airways American American 6.25% Notes Source: Blo
Slide 4: Integration Planning Underway
Integration Planning Underway IMO PROGRESS Launched Integration Management Office (IMO) Agreed to Composition of IMO Functional Teams Held “Kick-Off” event on April 2 and 3 in PHX Formed a combined baseline forecast of five-year synergy estimates and one-time costs Launched “Mergerball” playbook to
Slide 5: Mergers impact operations, but recovery is swift
Mergers impact operations, but recovery is swift U•S AIRWAYS AMERICA WEST 6 MONTH PERIOD WITH A14 <75% DOT A14 95% 90% 85% 80% 75% 70% 65% 60% 55% Res Migration Mar. 2007 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul
Slide 6: Mergers impact operations, but recovery is swift
Mergers impact operations, but recovery is swift DELTA nwa 4 month period with A14 < 75% DOT A14 95% 90% 85% 80% 75% 70% 65% 60% 55% Res Migration Jan. 2010 Jan-08 Mar-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr
Slide 7: Mergers impact operations, but recovery is swift
Mergers impact operations, but recovery is swift UNITED Continental Airlines 3 month period with A14 < 75% DOT A14 95% 90% 85% 80% 75% 70% 65% 60% 55% Res Migration Mar. 2012 Jan-09 Mar-09 May-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11
Slide 8: Airline mergers are uniquely difficult
Airline mergers are uniquely difficult Can’t shut down for a day and put up a “Coming Soon” sign Customers won’t treat us as one airline until we act, look, and feel like one airline You’ll never let us live it down if we screw up
Slide 9: Tremendous complexity ahead
Tremendous complexity ahead 110,000 people working to serve our customers That’s enough to fill Michigan Stadium to capacity 6,700 daily flights to 336 destinations in 56 countries Serving 41% of the world’s population 1,511 aircraft in combined fleet More than Boeing and Airbus delivered in 2012 70
Slide 10: Structure of the integration planning effort
Structure of the integration planning effort Transition Committee (TC) Doug Parker Tom Horton Bev Goulet Scott Kirby TC oversight Labor integration process Organizational design and execution Communications Integration Management Office (IMO) Bev Goulet Robert Isom Jim Butler Kerry Hester Candice Ir
Slide 11: Roles of IMO
Roles of IMO Capture the value Sequence the integration Coordinate the integration teams Manage risks Over-communicate More than $1 billion in estimated annual net synergies in 2015 No detail too small: walk before you run A lot of interdependencies A few days interruption costs millions of dollars
Slide 12: Guiding Principles
Guiding Principles Focus on the Customer Recognize Employees as the Key to Success Make Fast, Effective Decisions Realize the Value Run Two Great Airlines throughout the Integration Process
Slide 13: Identify what needs to change and what doesn’t
Identify what needs to change and what doesn’t Concept of 20-20-50-10 No change or integration Integration needed ~20% ~20% ~50% ~10% Remain separate Already common Choose, integrate, go Harmonize to Best of Breed American Airlines U•S AIRWAYS
Slide 14: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Get the basics required to be one company; plan rigorously for post-Close execution Show custom
Slide 15: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Get signage in place to tell customers where to go if they show up at the other airline’s check
Slide 16: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Give customers the ability to combine flights on a single itinerary Start combining departments
Slide 17: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Start swapping some aircraft onto routes where they’re a better fit Let customers earn and rede
Slide 18: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Combine our reservations systems Get to a single website Combine our operations control centers
Slide 19: Phasing the integration
Phasing the integration Planning Two Airlines One Airline Announcement Close Legal Close priorities and planning Post-close early results First 6 months Functional integration Post Single AOC optimization Become a single workforce Become a single brand Deliver a single customer experience American A
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