Maybe next year: the UAL-US Airways deal is off

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Maybe next year: two houses divided against themselves cannot merge, and it’s a good question if they can stand. That‘s the parable of the two airlines that have been trying to mere since the year 2000, when United parent UAL and US Airways made their first moves toward each other. They’ve been dancing since then but and have come close to touching cheeks, but, no, it’s no tango. The latest is that it’s officially off, with Doug Parker, the US Airways chief, telling his troops, “It is simply unlikely that anything will happen in 2008 as our industry continues to struggle with how to function in a world with $130 a barrel oil prices.” Glenn Tilton, the boss at United, said United would “size the business appropriately, leverage our capacity discipline to pass on commodity costs to customers, and accelerate development of new revenue sources.”

 

 

Some think that the deal failed over testosterone, as Jon Ash of Intervistas/GA2 puts it, blaming the competing egos of the two CEOs, each of whom wanted to run the show for a while. But we wonder if this wasn’t a realisation that two airlines with angry, hostile and unhappy unions and in United’s case huge loses – more than a half a billion in the first quarter alone- had something to with it. 

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