America West, US Air Confirm Merger Talks

The parties will otherwise stay mum unitl a deal is reached.
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America West

(AWA)

and

US Airways

(UAIRQ)

acknowledged late Friday that they've been getting cozy by holding merger talks.

In nearly identical press releases confirming the discussions, both companies cautioned, "There is no assurance that the discussions will lead to a definitive agreement." They added that they "do not intend to make any further announcements until a definitive agreement is reached or discussions are terminated."

On Wednesday,

The Wall Street Journal

reported that the companies were in advanced merger talks, citing sources familiar with the discussions. US Air's nonexecutive chairman, David Bronner, later confirmed the negotiations, according to the

Associated Press

, but US Airways itself continued to remain mum until Friday's press release.

The potential merger would create an airline with a significant national hub-and-spoke network fusing US Airways' web of East Coast routes with America West's Phoenix and Las Vegas hubs.

But

analysts are skeptical, saying the risks likely outweigh the rewards.