So it was the reservation systems that were responsible for the late flights, lost bags, and so on?
For the most part. We took two reservation systems and put them together into one that, at the time, wasn't as good as either of the two. If we had it to do over again, we probably would have said, bear with us a little longer. But we've overcome all that, and in December we were No. 1 in on-time performance. The merger happened in 2005, and nearly three years later, you're still not done, right?
Everything is done except for some of the labor contracts. We got a single operating certificate from the FAA in 2007; that was a tremendous amount of work. In September 2007 the last of the major systems cut over. Given the original merger, then your bid for Delta, you're obviously an advocate of consolidation. So if there is a fresh wave of mergers, where will USAirways fit in?
You can't just be sitting on the sidelines. I have indeed been a proponent of consolidation, and it looks like some things are going to happen. But I'm not sure that if there's one merger, that all these other dominoes are going to fall, like you're reading in the paper. We're a hub-and-spoke airline, with hubs in Charlotte, Philadelphia, and Phoenix. We want to expand that network. But if there is consolidation, we don't necessarily have to do anything. If we choose not to participate, that might be the right choice. We're one of the Big 6 now, and if we end up as one of the Big 4, then consolidation itself will help us.
I realize you can't say, "We'd like to merge with this or that airline," but there must be priorities you look at as you think about how to grow USAirways. What kinds of things do you look at? More service out west? More international routes?
Uh, yes. Probably of most value to us would be more international service. USAirways and America West are mostly domestic carriers. If a couple of big carriers merge, will that create more opportunity for discounters like Southwest or others to come in and undercut them on fares? Will USAirways be in a position to do that?
There might be some of that, but I think the distinction between network carriers and low-cost carriers will go away over time. All of us need to get costs down. But there certainly will be intense competition. What you won't see is, I don't think the system needs more hubs. Conventional wisdom seems to be there will be these two big mergers, Delta-Northwest, and maybe United-Continental, and then the dust will settle. Do you foresee any surprises?
It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen. Are airline executives calling you and asking, "Doug, how do you merge two airlines"?
That, I can't say.