says it is very happy as a member of the Star Alliance. But that doesn't mean it will stay a member forever.
In a commercial aviation world that is split into three alliances, each one anchored by one of the big three U.S. airlines, it is reasonable to think that the fourth largest U.S. network carrier would be a welcome partner anywhere.
US Airways has been a Star member since 2004. Its entrance took five years, sidetracked by a failed merger effort and then by the Sept. 11 terrorist attacks and the airline industry upheaval that followed.
In the fall of 1999, US Airways CEO Stephen Wolf met with
( UAUA) CEO Jim Goodwin to discuss US Airways' entry into Star. At that meeting, Goodwin suggested that United buy US Airways, Wolf disclosed in a 2000 interview. The merger effort collapsed during the summer of 2001.
Today, while US Airways is a six-year member of Star, it's considered a junior partner. The ranking U.S. partners include United and
. They share anti-trust immunity across the Atlantic. They are seeking anti-trust immunity across the Pacific. They are also seeking to merge. None of the three ventures includes US Airways.
US Airways has a major presence on the east coast. It operates vibrant hubs in both Philadelphia and Charlotte and it has the biggest presence at Washington Reagan National Airport. But on the east coast, "Star is about Newark," said Avondale Partners Bob McAdoo. When Star passengers connect to Europe, Newark is the first choice hub.
Continental to join Star in 2008 was perhaps United CEO Glenn Tilton's single greatest phone call. It set in motion the merger and it was the first step in solving United's biggest problem, a minimal presence in New York. In the history of United, it may be said that ex-CEO Richard Ferris expanded in Asia, Steven Wolf
brought in Europe and Glenn Tilton brought in New York.
As far as that phone call, Continental CEO Jeff Smisek was obviously willing to listen. Once
combined in a 2008 merger, "it relegated us, in effect, to junior-partner status," Smisek said in 2009, at a lavish welcome to Star ceremony that took place, not surprisingly, at Newark Airport.
Despite the history, US Airways appears to feel it can avoid being treated as a small child within Star. Asked on US Airways' July earnings call whether the carrier might join Star's Trans-Atlantic joint venture, President Scott Kirby responded: "It's no secret that we would ultimately like to be in the JV and alliance, and our preference is for that to be in Star,
which is pretty clearly the best alliance in the world."
Aviation consultant Robert Mann said US Airways will likely end up left out, just as Continental was. Mann contends the best place for US Airways could be Skyteam. He said the
Department of Transportation's rejection of a proposed slot swap between Delta and US Airways creates the impetus for Delta to seek to acquire US Airways. In the slot swap, Delta would have acquired slots at New York La Guardia in exchange for slots at Washington Reagan National.
In an acquisition Delta "could get most of the deal accomplished" and "really put the screws to
in New York and Washington," Mann said. Skyteam would get "a chance to steal some feed from Star while taking US Airways off the table as a potential Oneworld/American interest."
Reminded that regulators probably would not look kindly on an end-run around the DOT and that a Delta acquisition of US Airways would create a major anti-trust impediment, giving one carrier control of Atlanta and Charlotte, the only two Southeast hubs, Mann acknowledged: "It won't be easy
but just because they don't like it as a slot swap doesn't mean they wouldn't like it as a transaction."
McAdoo views US Airways as having immense appeal for Oneworld, which "doesn't have any carriers that serve all of the cities up and down the east coast, to feed their flights to Europe. With Philadelphia and Charlotte, US Airways covers virtually every city east of the Mississippi. But how does Oneworld get you from Greensboro or Savannah or Charleston to Europe? "
While American has made clear it is
not interested in a merger with US Airways, that doesn't mean that Oneworld member
would not like closer cooperation. In fact, British Airways owned about 20% of US Airways between 1993 and 1996. "British Airways needs US Airways," McAdoo said. "Think of all the cities in Ohio where they don't have any feed."
-- Written by Ted Reed in Charlotte, N.C.