United Airlines and US Airways are reportedly
discussing a merger, part of a longer consolidation trend in a troubled
industry. Delta and Northwest effected their own merger back in
fall of 2008. United and US Airways have been in talks before, but the
deal has never quite come through. Could it work out this time, and if
so, would it do some good?
- A Big Party of Awful At Business Insider, Vince Veneziani commends commentator and analyst Dennis Gartman on his points, which he reports as follows: "These are the two worst airlines in the world, Their services are uniquely bad, Their employees are uniquely surly, Their on-time and baggage services grades appalling, Their customer services reps uncommonly unhelpful." Veneziani adds his voice to Gartman's: "Two wrongs do not make a right."
- American and Continental 'Left Out in the Cold,' says Douglas McIntyre, who examines what a merger between these two big companies left out of the United-US Airways deal could do to enhance their competitiveness. He's building off of a point he made earlier:
US Air and United merger, it is likely that American, Delta, and
Continental will look for partners. The economy is still bad and the
temptation to drive down costs too great, even if it is at the expense
of customer service.
- US Airways 'Needs United,' explains The Wall Street Journal's Michael Corkery.
While the merger would also help United "to tap U.S. Airway's east
coast markets where United lacks a strong domestic presence," it's
United that's the more successful company right now.
Possible Sticking Point Corkery describes the negotiations as "the
on-again, off-again merger dance" between the two companies. In his analysis for Daily Finance, Sam Gustin
picks out one factor that could turn the deal off again: US Airways has
"two separate sets of pilot's contracts" left over from their old
merger with America West. He talks with independent airline analyst
Robert Mann about why that's a problem, and reports Mann's response:
this case, a merger would trigger provisions that would mean United
would have to have all of its pilots fly at the 2003 US Airways rates
that put that airline into bankruptcy twice." The issue, he says, is
insurmountable under the current leadership.
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