Make us your home page

US Airways left out of merger dance

It's been a long while since US Airways played a dominant role in the skies over Florida.

But lots of local travelers, particularly business travelers, still patronize the carrier and are well familiar with its troubles through the past decade. Oceans of red ink. Twin bankruptcies. Waves of layoffs and a fitful merger with America West.

Now, US Airways faces a problem that analysts say could finish off the airline: getting left behind as competitors merge into international behemoths.

United Airlines had engaged in merger talks with US Airways. But United switched gears and made a deal this month to combine with Continental Airlines. Continental chief executive Jeff Smisek ground salt in the wound by saying he didn't want United to marry "the ugly girl." In case anyone missed the point, he said Continental was "the pretty girl."

US Airways chief executive Doug Parker, in a message to employees, called the remark "both chauvinistic and offensive to the hard-working people of US Airways." Smisek publicly apologized.

But the fact remains that United decided Continental was a better partner largely because Continental is a much bigger international player in Latin America and Europe and domestically in New York and Houston.

If federal antitrust officials don't block the deal, the combined airline will unseat Delta Air Lines — which completed a merger with Northwest in 2008 — as the world's largest.

Like mergers in other industries, airline combinations are driven in part by cost savings from cutting jobs and duplicate facilities. And there's potential for new revenue from corporate travel contracts by offering a route system with more destinations.

Mergers help the entire industry, though not necessarily consumers, by reducing the number of seats for sale. Combined carriers typically end up smaller than the two separate airlines. That should let airlines boost fares under normal circumstances.

A longtime advocate for consolidation, Parker told the Washington Aero Club last week that he supported the United-Continental merger, adding that US Airways doesn't need a merger to survive.

Some analysts disagree. There's room for only three large network carriers, airlines with route systems stretching across the United States and flights overseas, said a report by the investment research firm Airline ForeCasts.

The final mega-merger, the report said, should bring together the two U.S. network airlines without partners: US Airways and American Airlines, the world's largest carrier before the Delta-Northwest hookup.

But there are problems. The US Airways route system isn't a good fit with American's. Philadelphia is US Airways' most profitable hub. But New York is American's focus in the Northeast. US Airways already is battling tough low-fare competitor Southwest Airlines at its Phoenix hub.

And publicly, at least, American executives aren't showing interest in a merger.

US Airways has survived some tough scrapes. Can it manage to dance among the elephants?

Steve Huettel can be reached at or (813) 226-3384.

US Airways left out of merger dance 05/25/10 [Last modified: Tuesday, May 25, 2010 9:07pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  2. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  3. 'What Happened'? Clinton memoir sold 300,000 copies in first week


    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.
  4. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  5. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]