Thursday, May 29, 2008

United and its on-again, off-again merger plans

Earlier, there were reports that United Air Lines and U.S. Airways had advanced their merger talks to an advanced stage and anticipated an announcement within a few weeks. But now we hear quite the opposite: the merger is on hold, and United is nearing agreement on an alliance with its former merger target, Continental Airlines.

Such an arrangement would certainly shake up the industry. At the moment, Continental remains part of SkyTeam, whose other U.S. members are Delta and Northwest. Since those two airlines announced their merger, Continental has asserted its interest in "other arrangements," but few anticipated an arrangement with United (which is, along with U.S. Airways, part of the Star Alliance).

And U.S. Airways? They've found a new way to reduce costs: starting June 1, they'll no longer be serving free snacks to Coach passengers.

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