Cover Story: US Airways - United merger? - | WBTV Charlotte

Cover Story: US Airways - United merger?

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - Charlotte is abuzz with talk of a possible merger between United Airlines and the Queen City's hometown airline US Airways.

It's a relatively easy headline to write, but combining the two giant air carriers would be a very complicated proposition impacting a wide variety of interests.

The companies, their unions and shareholders, the government--all have a stake in the outcome.  And most of all, it could affect you--the flying consumer.

It would create the world's second largest airline.  This will be the third time the two big carriers have talked of getting hitched. 

You want to see evidence of where the airline industry is headed.  Walk down the ticket counter at Charlotte Douglas International Airport.

Once filled with airlines of every stripe and color.. they've been gobbled up by others.

It's now down to five big hub and spoke legacy carriers.  All competing for basically the same customers.  And they're losing money.

Altogether, the airline industry has lost $60 billion in the last decade.  And airline executives like US Airways CEO Doug Parker say they can't keep that up.

"We have to be able to do things to fix ourselves," he said.  Parker speaking informally to a roundtable discussion of airline reporters five months ago believes mergers are the answer to the industry's money-losing ways.

Fewer carriers means fewer planes flying and as a result airlines can drive up prices.

What's happened over the last 30 years average airfares when adjusted for inflation have decreased 55-percent.

Airlines say if they can't make money, they can't keep flying.. which would impact you.

"It's hard to have reliable service for customers," says Parker.  "It's hard to give job security to employees. It's hard to give returns to shareholders.. all these companies are supposed to do."

In seeking a merger with United (which a bigger airline with more flights and more employees)  US Airways could increase the number of hubs it flies from now.  Currently, it's Charlotte, Philadelphia and Phoenix.

United Airline's hubs include some of the countries biggest cities:  Los Angeles, San Francisco, Denver, Chicago and Washington, DC.

"US Airways knows it can't survive forever without access to one of the major aviation hubs. Charlotte is good.. but the hub is not big enough," says airline reporter Ted Reed with www.theStreet.com

This would be the third time the two have tried to get together.

In 2008, high oil prices sunk the effort.  In 2000, both sides dropped the idea when it looked like they wouldn't get federal government approval.

"There's so much less to talk about than there was 10 years ago," says aviation analyst Bill Swelbar of MIT.  "But there's going to be Department of Justice scrutiny but I'm confident that there's a way to get a deal done."

Because of the economy.. both airlines have scaled back operations.. the two are about half the size they were a decade ago when they tried to pull it off and the government found it was going to be a monopoly in too many cities.

Neither airline is confirming talks are going on.. if it were to come together on paper still needs to cross a lot of hurdles.

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