Click to join an upcoming live event

Turn off Ads (click)

Click on your language to translate this article:

Afrikaans Afrikaans Albanian Albanian Amharic Amharic Arabic Arabic Armenian Armenian Azerbaijani Azerbaijani Basque Basque Belarusian Belarusian Bengali Bengali Bosnian Bosnian Bulgarian Bulgarian Catalan Catalan Cebuano Cebuano Chichewa Chichewa Chinese (Simplified) Chinese (Simplified) Chinese (Traditional) Chinese (Traditional) Corsican Corsican Croatian Croatian Czech Czech Danish Danish Dutch Dutch English English Esperanto Esperanto Estonian Estonian Filipino Filipino Finnish Finnish French French Frisian Frisian Galician Galician Georgian Georgian German German Greek Greek Gujarati Gujarati Haitian Creole Haitian Creole Hausa Hausa Hawaiian Hawaiian Hebrew Hebrew Hindi Hindi Hmong Hmong Hungarian Hungarian Icelandic Icelandic Igbo Igbo Indonesian Indonesian Irish Irish Italian Italian Japanese Japanese Javanese Javanese Kannada Kannada Kazakh Kazakh Khmer Khmer Korean Korean Kurdish (Kurmanji) Kurdish (Kurmanji) Kyrgyz Kyrgyz Lao Lao Latin Latin Latvian Latvian Lithuanian Lithuanian Luxembourgish Luxembourgish Macedonian Macedonian Malagasy Malagasy Malay Malay Malayalam Malayalam Maltese Maltese Maori Maori Marathi Marathi Mongolian Mongolian Myanmar (Burmese) Myanmar (Burmese) Nepali Nepali Norwegian Norwegian Pashto Pashto Persian Persian Polish Polish Portuguese Portuguese Punjabi Punjabi Romanian Romanian Russian Russian Samoan Samoan Scottish Gaelic Scottish Gaelic Serbian Serbian Sesotho Sesotho Shona Shona Sindhi Sindhi Sinhala Sinhala Slovak Slovak Slovenian Slovenian Somali Somali Spanish Spanish Sudanese Sudanese Swahili Swahili Swedish Swedish Tajik Tajik Tamil Tamil Telugu Telugu Thai Thai Turkish Turkish Ukrainian Ukrainian Urdu Urdu Uzbek Uzbek Vietnamese Vietnamese Welsh Welsh Xhosa Xhosa Yiddish Yiddish Yoruba Yoruba Zulu Zulu
Travel News

US Airways abandons merger talks with United Airlines

Written by editor

US Airways Group Inc said on Thursday it discontinues merger discussions with United Airlines UAL Corp, a move that leaves UAL to pursue ongoing talks with Continental Airlines Inc.

US Airways Group Inc said on Thursday it discontinues merger discussions with United Airlines UAL Corp, a move that leaves UAL to pursue ongoing talks with Continental Airlines Inc.

The statement from US Airways was the first acknowledgment by the company that it had been in talks with UAL, which is in separate merger discussions with Continental, according to sources.

“After an extensive review and careful consideration, our board of directors has decided to discontinue those discussions,” US Airways said.

A merger between UAL and Continental would form the world’s largest airline. Neither of those carriers has confirmed their talks.

UAL said in a statement it believes the airline industry would benefit from consolidation.

“We thoughtfully consider opportunities, based on what’s in the best interest of our company, our employees, our customers, our shareholders and the communities we serve,” the No. 2 U.S. airline said.

Continental, which reported a larger-than-expected quarterly loss on Thursday, declined to comment on the statement from US Airways.

An airline merger could spur industry-wide consolidation as the U.S. airline industry claws its way out of a painful downturn triggered by stiff low-fare competition, volatile fuel prices and, most recently, an economic recession that drained travel demand.

“It remains our belief that consolidation makes sense in an industry as fragmented as ours,” US Airways said.

Some industry watchers have said UAL had entered talks with US Airways only to draw Continental into separate talks.

“There really wasn’t much savings in a United-US Air merger as there will be in a Continental merger,” said John Pincavage, president of a consulting and financial advisory firm for the airline industry in Westport, Conn.

“Continental has the ability to give them more revenue and maybe save them some costs,” Pincavage said, adding that a UAL-Continental combination “was not as messy domestically in terms of eliminating hubs and firing people and getting into all sorts of union problems.”

UAL has been in merger discussions with US Airways twice before — most recently in 2008. UAL also held talks with Continental in 2008. Continental walked away from those discussions and the two airlines later entered into a strategic partnership that fell short of a merger.

A source told Reuters a merger is more likely this year than it was two years ago because UAL is a different company than it was in 2008. Furthermore, the industry is healthier and access to credit is easier.

US Airways, itself, was formed from a merger with America West Airlines in 2005. That airline later attempted and failed in a hostile takeover bid for Delta Air Lines Inc.

US Airways shares were down 4.59 percent at $6.45 on the New York Stock Exchange. UAL shares were down 1.7 percent at $21.07 on Nasdaq. Continental shares were up 0.84 percent at $21.27 on the NYSE.