American/US Airways Hook-Up: Plausible?
Perhaps events would compel American to act. The possibility seems realistic to Avondale Partners analyst Bob McAdoo. "I don't think it's crazy to speculate that if Continental and United got together, American would take a serious look at US Airways," he said.
"Would they find something interesting? I think they would. It would give them a presence in a part of the world where they are not all that strong" and bring more passengers to its international flights. American has failed twice to establish a Southeast hub; US Airways has one. American has sought to operate a Northeast shuttle: US Airways also has one of those.
US Airways' alternative is to stay in Star and possibly to be part of a merger involving United. That would be easier, says consultant Robert Mann. "It could be done quicker and it is kind of preassembled," he said. "US Airways and United already have a code share. The biggest issue would be egos."
Speaking recently to reporters in Charlotte, Parker reiterated his support for consolidation, saying the industry remains fragmented and financially weak. New Delta, the largest U.S. airline, has just 25% of the market. "It's not healthy (for) an industry this important to the economy to be this fragile," he said.Asked whether a merger would be prevented by the inability to combine two pilot groups following the 2005 US Airways/America West merger, Parker responded: "All it means is that if indeed there was to be another merger, it would require yet again another seniority integration, (between) three groups instead of two."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV