The CEO of Continental called US Airways an Ugly Girl! As he was describing why his company jumped up to negotiate a merger with United Airlines, he said that they did so to ensure that United did not get married to the ‘Ugly Girl’ – US Airways, who United was in merger talks with. You can read more details of his statements and apology to US Airways in this article on The Wall Street Journal. (Note: I have no affiliation to WSJ).
So what happened to the Ugly Girl, left jilted as she was being courted by United? Well, she is still out there, looking for a favorable suitor. US Airways has explicitly expressed a desire to merge with a larger carrier. With the creation of the huge mega-airlines Delta, from the merger of Delta and Northwest and the upcoming United, from the merger of United and Continental, US Airways is feeling threatened. If US Airways does not grow and grow fast, it will be relegated to a second-tier regional carrier status. Some might argue that it is already there.
US Airways, in its current form, was created by the merger of America West, a smaller domestic airline based out of Phoenix and the nearly bankrupt and severely hurting US Air. US Air had been negatively impacted by several bad crashes and very bad financial troubles. As an airline today, it is primarily a domestic airline, with hubs across the US – in Philadelphia, Charlotte, Phoenix and Las Vegas. It has a few international routes. They are all to Europe or the Caribbean and operate out of their Philadelphia and Charlotte gateways. To become a large International carrier, they have to merge with a larger airline with an existing international network. Organic growth by acquiring routes and aircraft to provision those routes, in these economic times is unrealistic.
The only real suitor for US Airways out there is American Airlines. There has been speculation of these two airlines merging, but nothing serious seems to be going on. Other than American, there is no large US based airline with a global network that has not gone through a merger in the recent past. And the government will not allow them to merge with a foreign owned airline. This merger would require US Airways to leave Star Alliance and join OneWorld. That itself is a long and arduous journey for US Airways. I am personally hoping that this won’t happen. I fly a lot of routes where US Airways dominates and I like earning miles on United when I fly them.
The only other option would be for US Airways to merge with another regional or domestic carrier (Republic?). Such a merger would still leave them as a domestic carrier but will potentially provide them with spare aircraft inventory from overlapping routes that they could use to fly new international routes.
Personally, I am no big fan of US Airways. I fly them a lot and actually believe that their reputation is worse than reality. I even wrote an article on them a few months ago titled – US Airways Sucks, or does it? I do still want them to succeed and hope they will find a good suitor. Ugly or pretty, remains to be seen.