US Airways and American Airlines may merge: The business moves in a circle

A POSSIBLE merger between US Airways and American Airlines is afoot. American filed for bankruptcy protection in November last year, and US Airways is said to be working on a bid and, according to The Associated Press, buying up internet domain names that include usairways-american.com and american-usairways.com.

This would reduce the number of major big airlines in the United States to just three, following the earlier merger between Delta Airlines and Northwest Airlines in 2008 and that between United Airlines and Continental Airlines in 2010.

Consolidation is the name of the game, but it is not new. The aviation history is dotted with as many amalgamations as there are break-ups. Nor is it unique to the United States. In Europe, there are the Air France/KLM and British Airways/Iberia tie-ups. Together, US Airways courting American argued, the partners should be stronger than they would be separate. There are pluses, particularly in network expansion.

Yet not all marriages are made on cloud nine. British Airways beat Singapore Airlines (SIA) for a stake in Qantas only to head towards a breakup. SIA itself became disenchanted in its stake in Air New Zealand and made a costly exit while still looking for a party interested in its stake in Virgin Atlantic.

But for US Airways, there may be a more cogent argument: Can it buck the trend and not go where others have gone?

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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