Thursday, April 22, 2010

US Air: We're No Longer Talking to United About a Merger

US Airways says it no longer is talking to United Airlines about a possible merger.

In a letter to employees this morning, Doug Parker, the US Air CEO, said, "our Board of Directors has decided to discontinue those discussions ... those talks have not progressed to a merger agreement, and for the foreseeable future we intend to remain a standalone carrier."

Not long after the talks between United and US Air began last month, United also began talking with Continental Airlines about a merger. Those talks are continuing.

Parker, like other airline executives, strongly believes that the domestic airline industry needs to contract and consolidate to achieve better control over pricing. "As I have said many times, it is not necessary for us to be direct participants in a merger because the entire industry benefits when consolidation occurs," he said in his letter to employees today.

He added, "I am sure some 'industry experts' will suggest that US Airways will be strategically harmed if United now chooses to merge with Continental. They will be wrong. Thanks to all that we have done together over the past two years – capacity rationalization, a la carte revenue programs, cost control and our commitment to operating efficiently and reliably – we have a strong and viable standalone airline that is producing industry-leading results. Should our competitors choose to merge and help create a more stable airline industry, our independent airline will only become stronger."


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