US Airways halts merger talks with United

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- US Airways announced Thursday that it has discontinued merger talks with United Airlines.

The Phoenix-based US Airways (LCC, Fortune 500) halted talks after months of speculation about a potential merger with UAL Corporation (UAUA, Fortune 500), the fourth largest U.S. carrier and the parent of United Airlines.

"US Airways has long been a proponent for consolidation in our industry," US Airways chief executive Doug Parker said in a statement.

"We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions," he later added.

Reports about combining the two companies have been around for years. But merger talks heated up again after 2008's Delta Air Lines (DAL, Fortune 500)-Northwest Airlines combination.

Airline analysts have said that the recession-battered industry is crowded with carriers, and needs to consolidate.

In 2009 alone, the number of domestic and international passengers on U.S. airlines fell 5.3%, according to the U.S. Bureau of Statistics. And the recent volcano eruption in Iceland added insult to injury, grounding commercial flights and costing airlines tens of millions of dollars a day.

Though the company had earlier declined to comment on rumors of a potential merger, it said in a statement that Thursday's announcement was "appropriate to clarify the status of those negotiations."

Still, the company hinted to the possibility of a merger in the future. "It remains our belief that consolidation makes sense in an industry as fragmented as ours," said Parker.

"Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition, and the cyclical nature of our industry is a positive one," he said.

The merger would have created the second largest airline in the U.S., behind Delta.

CNNMoney.com staff writer Aaron Smith contributed to this report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,037.97 -42.17 -0.23%
Nasdaq 5,060.25 -31.84 -0.63%
S&P 500 2,108.92 -8.77 -0.41%
Treasuries 1.92 0.01 0.37%
Data as of 12:24am ET
Company Price Change % Change
Applied Materials In... 19.97 -2.20 -9.92%
Apple Inc 132.65 2.98 2.30%
Bank of America Corp... 15.56 -0.08 -0.51%
Microsoft Corp 48.03 0.16 0.33%
Pfizer Inc 34.59 -0.68 -1.93%
Data as of Apr 27
Sponsors

Sections

No customers or employees were in the store when looters broke into it, the company said. It was closed earlier in the afternoon out of caution before the situation turned violent. More

A major earthquake was the last thing Nepal needed. Even before one of the country's major fault lines rumbled to life, the country was beset by challenges. More

Tech devices -- from drones to Raspberry Pis -- got a lot of love onstage at the 2015 Matrix Awards honoring powerful women. Here's why. More

An Oregon bakery that refused to bake a cake for a lesbian couple's wedding had its crowdfunding page shut down after just one day. More

Imagine having a three-day weekend every week and being paid the same full-time salary. It can be done if your employer offers you the option of a compressed workweek. More