Thoughts on USAirways/America West Merger Rumors

Rumors of an America West-USAirways linkup have been all over the news. The two carriers are certainly in talks. There’s a certain logic to it: USAirways has a strong East Coast route network, America West has a strong West Coast route network, together they’d be a true national carrier (the nation’s 6th largest).

But America West is close to profitability and is winning analyst plaudits. USAirways remains in bankruptcy for the second time since 9/11, is short on cash and on life support. USAirways has a much more senior workforce than America West. Integrating union labor pools is always a difficult task and one which can lead to significant acrimony.

It’s really unclear to me how America West would make USAirways’ assets profitable.

Rumors of the two carriers combining go back to 1997 (or at least that’s how far back my memory goes, perhaps rumors go back farther).

United almost bought America West purely for the planes, in order to throw most of ’em at USAirways which was building a significant presence at Dulles in 1998.
Then United tried to buy USAirways but the unions scuttled the deal (so United didn’t put up a fight with regulators, allowing the Justice Department to kill it which got United out of heavy breakup payments to US).

What a long time ago that was in the airline business. Airplanes are parked in the desert and on the market cheaply now.

I wonder why America West doesn’t just grow organically, rather than taking on expenses and combining workforce cultures. There really aren’t too many barriers to airline expansion, except at a couple of airport such as LaGuardia, Reagan National, and O’Hare.

I also wonder what would happen to USAirways’ Star Alliance membership and partnership with United if an America West deal goes through. Perhaps America West gets swallowed up into the larger picture. Perhaps the USAirways linkages fall apart, as United and America West are significant West Coast competitors.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Leave a Reply

Your email address will not be published. Required fields are marked *