US Airways Open to Merger

US Airways is open to merging with another U.S. carrier, its CFO told Reuters, adding that the domestic airline industry has too many major players. Speaking at the Reuters Travel and Leisure Summit in New York, Derek Kerr said US Airways is not in merger talks with another carrier because "it takes two to tango."

US Airways, the fifth largest U.S. airline, is not interested in merging with a foreign airline, Kerr said, because that would not cut capacity in the domestic market. “I don't think that will make a difference," he told Reuters. "Domestic is where there is too much fragmentation and there are too many airlines."

Reuters notes that US Airways is no stranger to mergers: it was acquired by America West in 2005 and it tried, and failed, to buy Delta Air Lines in 2007 through a hostile bid.

"It's five major carriers. It's too fragmented," Kerr told the Reuters Summit of the U.S. airline industry. "You have too many hubs, all chasing the same passengers trying to connect through the country. We believe that it needs to be consolidated."

In related airline news, Reuters reports that demand for business travel on U.S. airlines is recovering but will not reach pre-recession levels this year, according to the CFO of United Airlines parent UAL Corp.

"We have no data to suggest the current recovery in business travel demand is different from previous recessions," Kathryn Mikells said at the Reuters Travel and Leisure Summit.

The airline industry has been hit in the last year by a recession that eroded travel demand and hampered carriers' ability to raise fares, Reuters reports.

But Mikells told Reuters the airline industry has gotten some pricing power thanks to industrywide capacity cuts in 2008 and 2009 and is poised to raise fares, despite failed attempts earlier this year to increase ticket prices.

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