United turns to second choice Tuesday

April 29, 2008 at 1:19 PM
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CHICAGO, April 29 (UPI) -- Combining United Airlines with US Airways Group is not as good a fit as a United merger with Continental, industry analysts said Tuesday.

United had been pursuing a deal with Continental, but Continental bowed out Sunday and United has turned its focus back to US Airways.

But, "I don't think it makes the same sort of sense as with Continental," industry consultant Robert Mann Jr. told Crain's Business Journal.

"You don't get the robust international network on the Atlantic or in Latin America as you would with Continental," he said.

With less extensions to its service routes and more overlap, a United-US Airways merger would lead to more job cuts, compared with a deal with Continental, analysts said.

Considering a possible United-US Airways merger, J.P. Morgan Securities Inc. analyst Jamie Baker wrote the idea had "considerable merit," Crain's reported.

The merger would be "materially less complex," than a deal with Continental, Baker wrote.

US Air Chief Executive Officer Doug Parker has said he was willing to consider a merger.

"Our industry is far too fragmented and consolidation, if done properly, could result in a much healthier industry," he wrote in an April 16 letter to employees.

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