Report: US Air, America West Talk Merger

A combined company would take aim at Southwest's low-cost leadership.
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US Airways (UAIRQ) and America West Airlines (AWA) are reportedly in advanced merger talks that would create a national low-cost airline rivaling discount king Southwest Airlines (LUV) - Get Report, according to a published report.

The

Wall Street Journal

reported late Tuesday that people familiar with the matter say no deal has been completed and several obstacles stand in the way: namely, US Airways' presence in Chapter 11 bankruptcy protection.

A transaction would thus need approval from the bankruptcy judge and U.S. Airways creditors.

A merger of the two airlines would overtake Southwest as the sixth largest airline, based on 2004 traffic statistics, the

Journal

reported. With America West's hubs in Phoenix and Las Vegas and US Airways' in Philadelphia and Charlotte, N.C., the combined company could offer low fares on an integrated hub-and-spoke network that would offer many more route choices, according to the

Journal

.