Another United Merger Crashes

Talks with US Airways on permanent hold
By Peter Fearon,  Newser Staff
Posted May 28, 2008 3:20 AM CDT
Another United Merger Crashes
A passenger checks his luggage at the US Airways counter at Ronald Reagan National Airport. Talks between United Airlines and US Airways about a merger have collapsed.    (AP Photo/Jose Luis Magana)

A proposed merger between United Airlines and rival US Airways has collapsed, just a month after a deal between United and Continental fell apart. Some analysts predicted the rising cost of jet fuel would power merger deals, but the failed negotiations have raised serious questions about the success of future consolidation in the airline industry, reports the New York Times.

“There is capital out there, but not for old-fashioned mergers," said a veteran airline industry consultant. ”Mergers in and of themselves are not the answer. Look around the world—airlines are making money in Europe, Asia and Latin America. We need to cut capacity, meaning both aging aircraft and flights." (More United Airlines stories.)

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