Wednesday, April 7, 2010

United and U.S. Airways... uniting?

According to the New York Times, United and U.S. Airways -- both members of the Star Alliance -- are "deep in their merger discussions, though a transaction is not expected to be announced for at least several weeks."

As the Times article mentions, these are two airlines that have tried to merge before, announcing a deal in 2000 that collapsed under fierce union opposition.

A merger between United and U.S. Airways would create one of the world's largest airlines, but it's hard to say what it would mean for the third domestic member of the Star Alliance; Continental left Skyteam precisely because the merger between Delta and Northwest risked leaving it as the junior partner, and it's hard to see how a UA-US tie-up would be good for CAL.

Actually, I'm surprised to hear that United is in talks once again with U.S. Airways. It's true that America has too many airlines, so mergers do make sense. It's just that all of the United people I've asked, including on planes and in the Red Carpet Clubs, expressed a lot of enthusiasm for a possible future merger between their airline and Continental, while most of them had nothing but contempt for U.S. Airways.

Any UA-US merger would kill prospects for a subsequent UA-CAL deal simply on account of antitrust regulation.

But United CEO Glenn Tilton has made no secret of his interest in finding a merger partner, and Doug Parker gives the impression he'd merge U.S. Airways with any airline dumb enough...umm...visionary enough to take him up on it.

We'll see how it goes.

No comments: