Fri, May 30, 2008
Unnamed Sources Say Deal Is Either DOA... Or Imminent
And now... dueling headlines. The New York Times reported this
week that the merger between United and US Airways was dead -- a story ANN picked up, as
well.
As it turns out, however, the Old Gray Lady may not have had the
entire story. The Wall Street Journal also reported Wednesday talks
between merger teams from both sides were very much alive, and
another session was scheduled for Thursday. But that's not all --
The Associated Press reported Thursday United CEO Glenn Tilton and
US Airways CEO Doug Parker are meeting in person.
AP reports its sources say the merger faces numerous hurdles,
but is still possible despite published reports that the talks may
have broken down. The Wall Street Journal reports one issue on
which both sides agree is the amount of operational savings which
could be achieved through a merger -- about $1.5 billion dollars a
year. That could be one compelling reason to keep the talks
alive.
Industry sources agree that US
Airways is made a much-less-attractive merger partner by the
ongoing workforce integration hangover from its merger three years
ago with America West. The union representing pilots of the old US
Airways claims settling that mess could take up to seven years;
United pilots have said they'd rather not get involved in that mess
themselves, stating United/US Air merger would be "a toxic stew"
for that very reason.
Both companies have declined official comment on any of the
variations of the reports. Combined, United and US Airways have
about 91,000 employees, more than 800 airplanes and annual revenues
of almost $32 billion.
All three news organizations cited "unnamed sources close to the
talks." The only thing we know for sure now is that the reliability
of "unnamed sources close to the talks" appears to vary widely.
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