US Airways, United Discussed Merger
CHARLOTTE, N.C. -- Not surprisingly, US Airways (LCC) talked recently with UAL (UAUA), the parent of United Airlines, about a potential merger, which would revive a deal that was rejected by regulators in 2001.
However, the Delta and Northwest deal has reignited interest in a merger between Continental (CAL) and United, the source said, which could push US Airways out of the picture.
A deal between United and US Airways would provide United with two things it has always lacked: a Southeast hub in Charlotte and a strong presence at key Northeast airports. Additionally, the two carriers already code-share in 270 markets, and are both members of the Star Alliance.That could make a difference. As Delta CEO Richard Anderson said on Tuesday, existing code-shares and membership in the same alliance give Delta and Northwest a leg up as they move toward their more-than-$3-billion merger. One thing is certain -- were United to acquire US Airways, the price would be less than the $11.6 billion that United agreed to pay when the deal was proposed in 2000. In fact, some insiders felt that regulators turned down the deal when United backed away after deciding the price was too high. Shares of UAL rose 2.4% to $22.86, while US Airways fell 1.2% to $8.05. In a letter to employees on Wednesday, CEO Doug Parker did nothing to diminish speculation that the carrier may become involved in a transaction. "While we had hoped to remain on the sidelines of
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