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Friday, March 5, 2010

Another merger article

Here is another article regarding potential airline mergers. This article is from the Centre for Asia Pacific Aviation and the author indicates their view that United will merge with US Airways. The big reason stated for the benefits of this combination is that US Airways offers an east coast presence that United doesn't currently enjoy. In addition, the author indicates this merger paves the way for continued domestic capacity reduction that is still needed for airlines to avoid future bankruptcies. Also the author indicates that United will need help from its Unions to achieve profitability through the down cycles. As the author correctly indicates, this will be "hard and risky". I would say "hard and risky" is the biggest understatement of the year given what has already been conceded during the bankruptcy restructuring.