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Monday, May 05, 2008

Report: United Seeks Merger With US Airways

FOXBusiness

United Airlines’ parent company, UAL Group, is seeking a merger with US Airways, according to a report in the Wall Street Journal.

This follows the failed advances United made to Continental Airlines (CAL) for a similar union, advances that were rejected on April 27.

Talks between United (UAUA) and US Airways (LCC) have been in progress for the last six weeks, according to the report, and a final verdict could happen within the next ten days.

US Airways, the seventh largest airline in the country, is slightly smaller than sixth-ranked United. The pair has reported that a merger would amount to a joint savings of $1.5 billion, according to the report.

As with many of the proposed and finalized airline mergers seen so far in 2008, labor and regulatory concerns pose the biggest stumbling blocks to completing the deal.

Although the recent Delta-Northwest merger formed the world’s largest airline, if United and US Airways combined, that company would be the biggest.

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