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US Airways largely rules out further industry consolidation

Just as fervor increases on calls for American Airlines and US Airways to merge, US Airways CEO Doug Parker announced at the carrier's quarterly results that consolidation opportunities had passed. His comments suggest he sees American Airlines and US Airways, the last two US legacy carriers not to engage in industry consolidation, remaining independent and on their own to battle their larger competitors.

All the changes that created the step change in the airline business in the last several years have created profitability even at high fuel prices and have all been accomplished, Mr Park said, adding that even consolidation is done.

“I’ve long been a proponent of consolidation but it has now largely happened,” he said. “We are down to four major, hub-and-spoke airlines and a few national low-cost carriers and Alaska which doesn’t fit either category. We have a much different industry today. When we started talking about it, one of the most important reasons for doing it it was to get the industry well. Now, the big strategic reason for consolidation doesn’t exist any more. It’s already happened.”

It was ironic Mr Parker made that statement just as a US Airways-American merger is being bandied about, albeit after American goes through bankruptcy. He did not address that and perhaps his comments reflected that he is not interested in such a union. But, having prompted the United-Continental and the Delta-Northwest mergers, that is highly doubtful, since he has previously said US Airways would likely participate in the next round of consolidation.

See related article: US Airways in 68% negative swing on profits as it achieves revenue records