Airline merger has minimal impact on Tempe

U.S. Airways and American Airlines made notice of their multi-billion dollar merger last week. (Photo by Ashley Kesweder)

U.S. Airways and American Airlines made notice of their multi-billion dollar merger last week. (Photo by Ashley Kesweder)

US Airways decided to maintain its corporate presence in downtown Tempe after finalizing an $11 billion merger Feb. 14 with American Airlines, relieving some concerns that Tempe restaurants and shops would lose business.

Concern for the economic future of surrounding downtown businesses arose when the two airlines announced they would be joining forces and relocating the US Airways headquarters to Fort Worth, Texas.

Tempe Mayor Mark Mitchell said the announcement raised concern in the city council about maintaining a business in Phoenix and downtown Tempe.

“Since we heard this was to be taken place, we met with (US Airways CEO) Doug Parker,” he said. “One of our main concerns was the jobs and maintaining the hub in the Valley at Phoenix Sky Harbor (International) Airport.”

He said US Airways, which will adopt the American Airlines name under the new partnership, will maintain a corporate presence in downtown Tempe.

“(Parker) came through. … (He) kept a commitment to Tempe,” Mitchell said. “We have the opportunity to work with (US Airways) to potentially grow its presence in the valley.”

Robert Mittelstaedt, dean of the W. P. Carey School of Business, said the merger will not affect downtown Tempe or Phoenix as much as originally believed.

He said the headquarter relocation to Fort Worth will result in some job loss, but the impact on the greater Phoenix area will be minimal.

“The job loss is important, but it’s not huge compared to the size of the Valley,” Mittelstaedt said. “The economic impact in Tempe is modest. … Most of the concern seems to be around merchants around Mill Avenue.”

Mitchell said the greatest concern right now is maintaining the corporate presence and hopefully increasing employment opportunities in the Valley. He said it is unclear how big of an impact the merger will have on surrounding Tempe businesses.

“At this point, we don’t know exactly how it will roll out,” he said.

Mittelstaedt said individual businesses surrounding Mill Avenue might hurt economically for a while from the loss of many US Airways employees. However, downtown Tempe is continuing to grow and new companies are constantly relocating and trying to find new spaces to operate, he said.

“There are always other companies looking around for space and looking at places to locate,” Mittelstaedt said.

Some downtown Tempe businesses agree that the merger will affect their business in the future.

Sandy Stokes, supervisor at restaurant Mission Grille, said restaurants surrounding Mill Avenue and near the US Airways building will lose customers from the merger.

“We do get quite a lot of employees from (US Airways) for lunch and sometimes for breakfast,” Stokes said. “There’s no impact at this point because the merge is so new … but do I think it’s going to impact our business? Yes.”

Other businesses surrounding Mill Avenue, like Monti’s La Casa Vieja, do not expect the upcoming loss of US Airways employees to affect their customer count.

Angelo Muro, manager of Monti’s, said the restaurant survived the recession and has established itself in downtown Tempe by creating a clientele that will not be affected by the merge.

“I wouldn’t say it would affect us too much,” Muro said. “We’ve been here since the ’50s, and the clientele base is pretty steady.”

 

Reach the reporter at wpogden@asu.edu or follow her on Twitter @whitneyparis10