Economist predicts US Airways merger will hurt Phoenix

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By Jennifer Thomas By Jennifer Thomas

PHOENIX -- A new economic impact survey predicts that if the potential merger between US Airways and American Airlines goes through, there could be job losses in the thousands in Arizona.

"Whether it’s 1,300 or 10,000 remains to be seen," said Elliot Pollack, an economist who prepared the study for the North Scottsdale Chamber of Commerce.

Pollack said US Airways has stated it will move some of its corporate operations from Tempe to American’s corporate headquarters in Texas.

The survey claims there are approximately 2,000 headquarter jobs in Tempe and if all those jobs are moved, and outside workers like contractors and service providers are factored in, the total jobs impact is 5,305.

The survey also examines what would happen if US Airways were to move its hub from Sky Harbor International Airport. It cites 9,239 workers for the airline and a total employment impact of 24,515 jobs.

"American has a hub in Dallas and another in Los Angeles," Pollack said. "Certainly three hubs that close together would be unusual for an airline."

A loss of that many employees would mean a loss in more than $52 million in tax revenue to the state each year.

Robert Mittelstaedt, dean of ASU's W.P. Carey School of Business, disagrees with some of the conclusions reached in the survey.

"You have to question the assumption that all the jobs would go away because US Airways has a huge presence here," he said. "I doubt they're going to walk out of Phoenix and just give this market to Southwest."

Mittelstaedt predicts job losses to be in the few hundreds, mainly from the corporate headquarters.

US Airways is bound by a non-disclosure agreement related to the merger, but spokesman Andrew Christie, in an email to 3TV, pointed to public statements made before the agreement.

"We have recently signed a five-year lease on our HQ with a potential five-year extension," said Christie in the email.

Christie continued, "We intend to maintain our hub and significant corporate presence in Phoenix no matter what happens."

Christie also said the North Scottsdale Chamber of Commerce did not contact US Airways for numbers or information. He also said the corporate headquarters employ 750 people, not 2,000.

Pollack stressed that his survey was purely speculative.