United Airlines and US Airways Reportedly Close to Merger Deal

A merger between US Airways and United Airlines would combine the two carriers to become the world's second largest commercial airline.

According to a report from the Associated Press, it has been recently speculated that talks of a merger between major commercial airline companies US Airways and United Airlines could very likely become a reality in the near future.  Should the merger go through, it would lead US Airways and United Airlines in combination to surpass Southwest Airlines to become the world’s second largest airline behind Delta Airlines.

Talks of a possible merger involving US Airways and United Airlines have been active on and off for nearly a decade now.  In 2000 the first near merger deal between United Airlines and US Airways fell through die to hurdles related to antitrust regulations and deteriorating market conditions, according to USA Today.  Shortly following the 2008 merger of Delta Airlines and Northwest Airlines, a second merger deal involving United, US Airways fell through due to complications surrounding integration costs.

Although it has been claimed by multiple sources that the merger negotiations between Delta Airlines and US Airways are nearing a resolution, there remains some doubt that some of the obstacles to the completion of a merger deal in past negotiations will not resurface again.  Sam Gustin of DailyFinance.com notes one such obstacle pointed out by industry analyst Robert Mann of RW Mann & Co: the union contracts of US Airways pilots retain many of their aspects which have led negotiations to stall in the past.

The possible merger between US Airways and United Airlines is only one of several mergers rumored to be in the works.  There are current rumors of a possible merger between British Airways and Iberia Airlines, and additionally of talks between American Airlines and Continental.  The recent wave of merger talks is believed by some analysts to be largely the result of the impact on the industry of the current economic recession; however it is not expected that the possible merger of US Airways and United will be among sources of rising air fare costs.

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