AMR CEO Horton's fate in balance as US Airways merger nears

Wed Jan 30, 2013 5:29pm EST
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By Soyoung Kim and Nick Brown and Karen Jacobs

NEW YORK (Reuters) - As US Airways Group Inc LCC.N and American Airlines parent AMR Corp AAMRQ.PK hammer out the final details of a merger, one of the most thorny issues has been whether AMR Chief Executive Tom Horton stays or goes.

After rebuffing an aggressive takeover push from smaller rival US Airways early in its bankruptcy, AMR of late has embraced a deal, but is now eyeing a high-level position for Horton in the merged airline, according to several people familiar with the matter.

With US Airways CEO Doug Parker angling to become both chief executive and chairman of the new company, AMR has proposed splitting the roles and making Horton chairman of the board should Parker become CEO, the people said.

The AMR board has a high regard for Horton, who has spearheaded bankruptcy restructuring, but the airline's unions and creditors are wary of his rocky relationship with labor, as is US Airways, itself no stranger to bankruptcy, according to the people familiar with the matter.

There is also concern that splitting up the chairman and chief executive roles would create a strategic clash at the top at a time when the newly merged airline should embark on a major transformation, they said.

The carriers are still negotiating management structure and no decisions have been made about who will run a merged airline, the people said. But Horton's fate has proved to be one of the major sticking points of the negotiations.

They people asked not to be named because the matter is not public. AMR and US Airways declined to comment for the story.

"I think it's very hard to predict how things will ultimately pan out," said one of the people close to the situation. "Tom is making the strongest push he can for some role coming out of this, but people are very concerned for creating a dynamic that might create chaos or disharmony."   Continued...

American Airlines CEO Tom Horton attends a ceremony marking German carrier Airberlin's accession to the Oneworld network of airlines, at the BBI airport outside Berlin March 20, 2012. REUTERS/Thomas Peter