TPG’s Schifter Joins Board of Post-Merger American Air
TPG Capital’s Richard Schifter is among five investment-oriented directors who will serve on the board of the reconstituted American Airlines after the merger of US Airways Group Inc. (LCC) and AMR Corp. (AAMRQ)
Four of those five, including Schifter and Blackstone Group LP (BX) senior adviser James Albaugh, were picked by the committee representing creditors in Fort Worth, Texas-based AMR’s bankruptcy, while Chartwell Capital Inc. President Richard Kraemer is a carryover from the US Airways board. The combined company’s directors were announced in a statement today.
US Airways Chief Executive Officer Doug Parker also cemented his control over the post-merger airline by keeping his current management team largely in place, according to a separate statement. The merger, slated to close next quarter, will create the world’s largest airline by passenger traffic.
Private-equity and hedge fund experience means directors are “going to focus on the bottom line for shareholders, and the airline business has historically never made much money,” said Dennis McCuistion, executive director of the Institute for Excellence in Corporate Governance at the University of Texas at Dallas. “Nowadays you need a mix” of directors with industry knowledge and outsiders.
US Airways rose 1.4 percent to $17.26 at the close in New York. The shares have gained 28 percent this year, as the Bloomberg U.S. Airlines Index has advanced 42 percent.
The 12-member board also will include Michael J. Embler, 49, former chief investment officer at Franklin Resources Inc.’s Franklin Mutual Advisers, and Jeffrey D. Benjamin, 51, a senior adviser to Cyrus Capital Partners LP and a consultant to Apollo Global Management LLC.
Schifter, 60, a partner at David Bonderman’s TPG Capital, will resign as a director at Republic Airways Holdings Inc. before joining the American board. He previously served on the US Airways board. Albaugh, 63, is a former president of Boeing Commercial Airplanes.
John T. Cahill, 56, executive chairman of Kraft Foods Group Inc., will be the lead independent director. The board also includes Parker, 51, and AMR CEO Tom Horton, 52.
The management shuffle follows the course Parker took in 2005, when he led America West Holdings Corp. in a merger with US Airways’ predecessor and kept most of his top lieutenants. It sweeps out Horton’s top executives, who were in place when AMR filed for bankruptcy in November 2011.
US Airways President Scott Kirby, Chief Financial Officer Derek Kerr and Chief Operating Officer Robert Isom will retain those offices at the new American, the companies said today.
“It is time to move forward, and this announcement is a key step on the path,” Parker said in a message to employees about the executives.
Virasb Vahidi, American’s chief commercial officer, will depart, along with CFO Bella Goren and Jim Ream, senior vice president for operations.
Beverly Goulet, who was named American’s chief restructuring officer for the bankruptcy and later was made chief integration officer for the merger, will stay at the combined carrier in the integration role.
Horton will be chairman of the merged US Airways and American until the combined airline’s first shareholder meeting. Horton became AMR’s CEO in 2011 when Gerard Arpey resigned as that company prepared to file for bankruptcy protection.
Elise Eberwein, US Airways executive vice president for people and culture, and Steve Johnson, executive vice president for corporate affairs, will keep those titles at the merged carrier.
From the current American, Wil Ris will stay as senior vice president for government affairs and Maya Leibman will remain chief information officer.
Dan Garton will give up his spot as CEO of American Eagle, AMR’s regional carrier, later this year, the airlines said.
The two companies agreed in February to combine in an $11 billion all-stock merger. American’s bankruptcy creditors will own 72 percent of the combined airline, and shareholders of Tempe, Arizona-based US Airways will hold 28 percent.
The combined carrier will keep the American name and Fort Worth headquarters, the airlines have said. It will pass United Continental Holdings Inc. (UAL) to become the world’s largest carrier.
The merged airline board will include current AMR directors Alberto Ibarguen, 69, CEO of the John S. and James L. Knight Foundation; and Ray Robinson, 65, chairman of Citizens Trust Bank of Atlanta and a former AT&T Corp. executive.
US Airways directors who will remain on the new board are Kraemer, 69; Matthew J. Hart, 61, former Hilton Hotels Corp. president; and Denise M. O’Leary, 55, a former general partner in Menlo Ventures, a venture capital firm.
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