United Airlines/US Airways combo no longer cooking

Reuters is reporting that the CEOs of United Airlines and US Airways have shelved plans for the carriers to merge. Reuters quotes separate messages to United Airlines' and US Airways' employees from their respective corporate chiefs.

Labor, especially many pilots, appears dead-set against a merger. The critical issue in combining any two carriers, historically, has been integrating pilot groups, particularly their union seniority lists. Without buy-in from cockpit crewmembers, mergers can have a very difficult time making it.

In a prepared statement on May 7, Captain Steve Wallach, Chairman of the United Master Executive Council of the Air Line Pilots Association said: “[We] have serious concerns that the highly touted financial benefits to be derived from [a UA/US] merger are likely to be achieved.” Wallach went on to contend that “these benefits have no basis in reality. We therefore believe that a merger with US Airways should be a last resort, and not a first choice, for United”.

Why the merger moves, aside from the fuel problems besetting the airline industry? At a recent meeting of the Association of Corporate Travel Executives in Washington, D.C., John Ash, a noted aviation consultant, contended: “Some of what you see right now is testosterone-driven.” Ash said that hedge funds had also helped drive some of the merger activity.

Notably, both American Airlines and Continental Airlines have backed off in recent weeks from any ideas they might have entertained about merging.

And so it is that the merger tidal wave predicted in the wake of the proposed Delta Air Lines / Northwest Airlines merger announcement may simply have evaporated, at least for the foreseeable future.

© Cheapflights Ltd Jerry Chandler