Dallas-Fort Worth stands to gain from the merger of US Airways and
American Airlines, Phoenix may be feeling the pain.
The loss of a corporate
headquarters leaves behind a host of questions about how that will
affect the Phoenix area, ranging from arena naming rights to corporate
giving to status as a hub city.
Officials have said they
plan to keep a significant corporate presence in neighboring Tempe,
though the company will be based in Fort Worth. Still, the loss of a
headquarters could potentially cost the Phoenix area hundreds of quality
jobs.
Economists and business
leaders have said those job losses are just a blip in the overall
economy. What really hurts, they said, is the loss of prestige, and of a
prominent corporate partner with deep roots in the community and a
history of charitable giving. Some have wondered if the move portends
cuts in air service at Phoenix Sky Harbor International Airport.
“I see nothing positive
coming out of it,” said John Graham, president and CEO of the
development firm Sunbelt Holdings.“I think we get a little bit of
another bad publicity story nationally, which is we have lost a
corporate headquarters, and we don’t have many to start with.”
Others have expressed
optimism that the combined airline will keep the hub and ultimately
improve service, possibly adding international flights.
“All reports are that there are going to be more flights in the region,” said Tempe Mayor Mark Mitchell.
Mitchell said he spoke
with US Airways officials after the merger announcement and was told
that they plan to maintain a corporate presence in downtown Tempe.
“We needed to keep our
hub … and a corporate presence in Tempe, and he [US Airways CEO Doug
Parker] came through,” Mitchell said.
Then there were five
US Airways leaves, five
Fortune 500 companies will still have headquarters in Arizona: Avnet, an
electronics components distributor; Freeport-McMoran Copper & Gold;
Republic Services, which manages waste; PetSmart; and Insight
Enterprises, which sells electronics components.
The merged airline also has the naming rights for US Airways Center, where the Phoenix Suns and Phoenix Mercury play basketball.
The US Airways name is
likely to stay on the arena in the short term, but there is language in
the contract to change it, said Jason Rowley, Phoenix Suns president.
It’s unclear what the new name will be, as American Airlines already has
naming rights for NBA arenas in Dallas and Miami.
“My guess is there is not
an immediate name change,” Rowley said. “They are looking to join two
multibillion-dollar companies. We are just one contract for one building
for one town.”
US Airways employs 9,147
in the Phoenix metro area, including about 750 in its headquarters
building. In her response to the merger, Gov. Jan Brewer focused on the
roughly 9,000 jobs that will stay in Phoenix.
But John C. Lucking, an
economist and president of Econ-Linc in Phoenix, said the front-office
jobs that are lost carry inherent community value.
“Those are really
high-paying jobs, and more importantly they are prestigious jobs for
people to get involved,” he said. “Guys like Doug Parker get involved in
the community.”
US Airways provides
corporate philanthropy in all of its hub cities for causes including
animal shelters, festivals, performing arts and school clubs, according
to its website. A number of Arizona officials are banking on a continued
corporate presence that is active in the community.
For example, Phoenix Mayor Greg Stanton said Parker has “verbally committed” to continue local corporate giving.
US Airways has a history
of supporting human services, education and arts and culture in the
Phoenix area, said Jacky Alling, chief philanthropic services officer at
the Arizona Community Foundation, which facilitates philanthropy to
nonprofits.
She wasn’t sure how the loss of the headquarters would affect that giving, but Alling thought any change would be gradual.
Western hub?
One key question is
whether the loss of the headquarters will cost Phoenix its status as a
hub city — and there is no firm answer.
Barry Broome, president
and CEO of the Greater Phoenix Economic Council, said he has been
assured by Parker that Phoenix will be the merged airline’s western hub.
“And that’s a big deal for Phoenix to be their primary western hub over Los Angeles, Denver and San Francisco,” he said.
That would ultimately
strengthen air service at Sky Harbor and possibly lead to direct
international flights, said Broome, who sees the potential for job
growth at Sky Harbor.
Outside observers of the
airline industry could see that scenario playing out but also said that,
based on past mergers, Phoenix could lose its hub status.
But Robert Mittelstaedt,
dean of Arizona State University’s W.P. Carey School of Business, said
he believes Phoenix’s status as a hub city is secure. He was skeptical
that the merged airline would cede business to competitors like
Southwest Airlines.
“I just can’t believe that a new American-US Air combination would walk away from all of those passengers,” he said.
Given the way the airline industry is consolidating, he said, a US Airways merger was inevitable eventually.
“We could lose a corporate headquarters, or down the road we could lose an entire company.”
http://www.dallasnews.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment