If More U.S. Airlines Merge, Who would Benefit?

"US Airways is the product of several successful mergers, most recently the combination of America West and US Airways," he said last week. "Working together, we have blended employees and cultures to create a new standard in the industry, which combines the best attributes of a low-fare carrier and a full-service airline. We fully expect the 'New Delta' to exceed these already high standards in the marketplace."

US Airways still needs the backing of the Delta creditors' committee to proceed with its takeover plans. Delta's management and most employees are still opposed to a takeover and are determined that the company will emerge from bankruptcy as a stand-alone entity.

United is reportedly watching the US Airways proposal to determine whether the market, Congress, and regulators would also warm to the idea of a United-Continental merger. If the US Airways-Delta merger fails, United is expected to be less likely to move ahead.

Aviation analysts like Kevin Mitchell of the Business Travel Coalition in Radnor, Pa., believe that would be the best scenario. He argues that a flurry of mergers right now would raise prices, overcrowd already-packed planes, and create chaos for customer service for years to come precisely because it is so difficult to merge aviation corporate cultures.

"Of course, Wall Street is going to push it," he says. "What's good for investors, shareholders, and management may not be good for others: Lots of employees will be laid off, and customers can look forward to 20 to 30 percent price hikes and several years of customer-service [misery]."

(c) Copyright 2006. The Christian Science Monitor

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.