What effect did US Airways’s hostile bid have on your efforts?
We had worked darn hard for well over a year to fix the business. Then, it was as if you were on the football field and you got the ball down to the five-yard line and someone runs in from the bench saying, “Here, hand me the ball, I can take it from here!” And you say, “No, no, we’re going to finish this play ourselves.” It was personal because we had put so much of our heart and soul into saving the place, but in hindsight it was a real blessing because it got everybody on the same page.
One of the most interesting aspects of the bid was that you never showed US Airways your financials. How did you get away with that?
The deal was a nonstarter right out of the box. [Had we been] willing to even enter into due diligence it [would have been] an explicit implication that we thought that the deal had some possibility of going forwardÂÂÂ . Of course, we had to convince the creditors not to force us to open the books. We made the case that by staying the course and giving the company the ability to get out of bankruptcy on an expedited basis, [the creditors] were going to get a much better return and get real currency in their hands [as opposed to] the promise of a deal that we believed could never get done.
Once Delta and Northwest emerged from bankruptcy this year, it was the first time in five years that no one big airline was in Chapter 11. How does that change the industry dynamics?
It allows the industry to hopefully settle down and provide a more stable outlook for customers and employees. Chapter 11 is a very onerous, very challenging environment because of all the volatility and the great fear of the unknown. This industry provides enough of that on its own. So when you layer in the volatility on top of it, it really [creates] a pretty dysfunctional environment. I would hope, going forward, that the industry now has the ability to manage its affairs.
Still, so many analysts say that there does need to be consolidation. Do you agree?
You want to make certain that any deals you do are the right deals, meaning that they are deals employees gain from, customers gain from, communities gain from, not just Wall Street. And if we can structure the right deal with the constituents truly winning together — not the U.S. Air deal, which was predicated on take-aways, that employees were going to lose their jobs, that customers were going to lose service, that communities were going to lose a tremendous amount of critical airline serviceÂÂÂ I do think consolidation can play an important role in helping the industry manage the cycle.