Just weeks after Northwest Airways and Delta Airlines announced their merger plans, it appears that United Airlines and USAirways will soon make their own announcement. If pulled off, a United-USAirways merger would create the world’s second largest airline just behind the newly-merged Northwest-Delta entity which will be called Delta Airlines.
Flying as United Airlines, the newly-merged airline is expected to keep its headquarters in Chicago, but be controlled by USAirways management. USAirways was bought out by America West in 2005, but the airline kept the better known USAirways name.
We’ve Been Down This Road Before
If the United-USAirways deals sounds familiar, the Chicago Tribune
recently reminded its readers that these airlines had announced a deal in 2000, that collapsed 14 months later. Opposition from regulatory and union officials ditched those plans and a slowing economy was also being blamed for the earlier collapse.
Gates To Open Up
Certain east coast US gates controlled by USAirways and United could suddenly be freed up if the merger goes through. Likely, regulators would force the newly-merged entity to cede gates at important airports, including Reagan National in Washington, DC, allowing JetBlue, Virgin America, and Air Tran to bid on available gates.
Other Industry News
Most of the merger talk these days has come about as airlines face record jet fuel prices. A rash of smaller airlines have already declared bankruptcy with several closing their doors permanently. However, a few airlines are hoping to make it through the current crisis including:
- Frontier Airlines
is receiving protection in bankruptcy court and has permission to sell off four aircraft in a bid to pay off loans and raise cash.
- Virgin America
plans on adding O’Hare Airport to its itinerary. The airline has petitioned
the FAA to receive two gates and eight arrival slots at the busy airport long dominated by United and American Airlines.
- Silverjet, which is the last of three air carriers flying business class only passengers between New York and London (after MAXjet and EOS’ demise) has been in talks with Lufthansa and other interested parties to purchase the airline. However, Silverjet CEO Lawrence Hunt is reluctant to sell citing market conditions as the chief reasons to keep Silverjet off the market.
Oil Dips Slightly
One glimmer of light for the airlines is the price of oil which actually dropped slightly
by 56 cents to $125.40 for June crude delivery. Not that bright of a light, that is for certain, but one the airlines can use if only for the moment.