US Airways Exits United Airlines Merger Talks

According to a statement from US Airways, they have backed out of merger talks with United Airlines. This news comes after the two airlines have been talking for 4 weeks, but is the first time the carrier has acknowledge that they were discussing a possible consolidation. However, the talks were a second round for discussions that started in 2008.

US Airways says that they have made this decision with the interests of their customers, employees and shareholders in mind. Chairman Dough Parker confirmed the talks, but said that their board of directors decided to drop out of the discussions after careful consideration and an extensive review. It’s their belief, he added, that consolidation makes sense, whether they are participants or not.

Some think that the exit of US Airways will mean a stronger possibility that United Airlines will tie up with Continental Airlines. However, Continental won’t be pressured into striking a deal now that US Airways is out of the picture. Plus, they are speculated to be in merger talks with American Airlines, but analysts think that United and Continental will make a better group.

It’s been a turbulent year-and-a-half for the airline industry – not just for US airlines, but for carriers around the world – due to the global recession. Businesses have been consolidating their operations in order to save themselves from going bankrupt or falling into administration. Although much of the economy will go back to the way it was after they start to really feel the affects of recovery, the airline industry may never be what it was.