US Airways looks for merger
14 / 08 / 2012
DEREK Kerr, US Airways’ chief financial officer has announced that the carrier is looking to merge with another US airline. It has yet to approach any other carrier as Kerr says, “it takes two to tango”.
According to Kerr, there are too many competing airlines for the US domestic market and consolidation is necessary to reduce capacity. This would therefore, he added, rule out merging with a foreign carrier, as that would not cut capacity.
“I don’t think that will make a difference,” he said. “Domestic is where there is too much fragmentation and there are too many airlines. It’s five major carriers; it’s too fragmented. We believe that it needs to be consolidated. Consolidation is one of the major ways this industry can become profitable.”
US Airways is the US’ fifth-largest airline, so when Kerr was asked why it was not approaching any other carrier, Kerr said: “It’s difficult for the number five player to make a move on numbers one through four.” The four being American Airlines, Continental Airlines, Delta and United Airlines.
Earlier in the week, United Airlines’ chief financial officer, Kathryn Mikells, also said that it was considering a merger.
US Airways tried to negotiate a merger with United in 2008, but this stalled when United went after an alliance with Continental instead.
United Airlines and US Airways are both part of Star Alliance, a global network of carriers that allows them to streamline costs while sharing revenue.