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US carriers rekindle merger talks

Another key airline merger could be in the offing following reports that United Airlines and US Airways are once again in talks.

The two carriers have made several attempts at greater cooperation in the past. The last, in 2008, is thought to have failed because neither carrier was in good enough financial shape to cope with the costs involved in integrating the two businesses. Both airlines' situations have improved since.

If it goes ahead this time, United/US Airways will become the world's second largest airline behind Delta, which merged with Northwest Airlines two years ago. United/US would also push American Airlines into third place.

If plans proceed, some closure of bases is likely in the US. United has hubs at Chicago, Washington DC, Denver, Los Angeles and San Francisco, while US Airways operates them at Philadelphia, Phoenix and Charlotte.

United offers many international routes and is strong in Asia, while US Airways has a good domestic network, particularly on the east coast, but is comparatively weak internationally.

Continental Airlines, which is in Star Alliance with United and US, could also be stirred into making overtures to one of the brands, observers believe. However, it did reject a similar proposal from United two years ago.

A United Airlines' spokesman said it would not comment on speculation, but added: "We have always said that consolidation is something that we are in favour of."

News of the talks followed the announcement this morning that British Airways and Iberia had confirmed their merger.




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