What's Next for US Airways?

TEMPE, Ariz. (TheStreet) — Although it is a product of four major mergers, US Airways (LCC) (Stock Quote: LCC) has yet to make the one final deal to become part of one of the world's leading carriers.

But that day will come, says CEO Doug Parker. And in the interim, it is important to ignore two prevalent misconceptions. One is that US Airways' labor situation blocks any deal. The other is that US Airways will struggle until it finds a merger partner.

(LCC) On Monday, following the announcement of a merger between Continental (CAL) (Stock Quote: CAL) and United (UAUA) (Stock Quote: UAUA), shares in US Airways and Alaska (ALK) were the biggest beneficiaries, trading on speculation that they could become acquisition candidates.

Meanwhile, United CEO Glenn Tilton said United did not use US Airways as a stalking horse in order to engage Continental.

(LCC) (CAL) (UAUA) (ALK) "When Jeff (Smisek) called me on the ninth of April, which happened to be my birthday, we were very serious about the work we had underway at that time, very serious indeed," Tilton said in a conference call, referring to the US Airways/United merger talks. But "at the end of the day, industrial logic and the compelling proposition that we have presented to the marketplace today trumps any work you may have had underway."

Meanwhile, the Continental CEO Jeff Smisek, who will head the new United, said he learned of the US Airways/United talks in the newspaper. "I didn't want him to marry the ugly girl, I wanted him to marry the pretty one," Smisek said. "And I am much prettier." Smisek did note, however, that Parker is "a very handsome man."

(LCC) (CAL) (UAUA) (ALK) In the short term, while it may be merger-deprived, US Airways appears poised to benefit as much as any carrier, from the ongoing recovery. Eventually, it may also participate in a merger, quite possibly with the backing of its pilots union.

An April 12 meeting between Parker and leaders of the U.S. Airline Pilots Association apparently represented a turning point, because it led to a distinct thaw in a relationship that has been frosty for years. In the meeting, Parker indicated that a merger with United was possible, after months of talks.


If you liked this article you might like

Here's Why New York Area Airports Score Low With Travelers

American Airlines Is Totally in Love With Its Charlotte Hub - Here's Why

United Airlines Might Be Having an Identity Crisis That Is Worrying Wall Street

American, Spirit and United Get Downgrades as Ticket Pricing War Rages

Woman Sues Delta for Nearly $10,000 After Chomping on a Rock