US Airways drops United merger talks

22 Apr 2010 by BusinessTraveller

US Airways says it has discontinued recent discussions with United Airlines regarding a potential merger, but adds that it remains its belief that “consolidation makes sense in an industry as fragmented as ours”.

It was reported in the US media earlier this month that the two airlines were in merger discussions, but US Airways’ chairman and CEO Doug Parker said that these talks had now been discontinued.

"We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions.

"While it is our policy not to comment on rumours concerning strategic transactions, because of the persistent rumours about a possible transaction with United Airlines we believe it is appropriate to clarify the status of those negotiations. In the future, we will continue to follow our policy of not commenting on potential strategic transactions until we have entered into a definitive agreement with respect to a specific transaction.

"It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome.”

United is also rumoured to have restarted talks with rival US carrier Continental over a possible merger, after previous discussions halted in 2008.

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Report by Mark Caswell

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