United Airlines Sees Hope For U.S. Airways Merger

May 5, 2008 3:21 p.m. EST

Chicago, IL (AHN) - United Airlines is hoping to luck out on this new round of merger talks - this time with US Airways, the 7th largest American airline, The Wall Street Journal reported Monday.

According to The Journal's insider source, United Airlines' parent company, UAL have brokered merger talks with Tempe, Arizona-based US Airways in mid-March and an optimistic outcome could be expected within the next few days.

A joined United Airlines - U.S. Airways company could save both carriers some $1.5 billion. This would also create the world's largest airline company - a post currently held by the recently merged Delta and Northwest airlines.

The Journal report however noted that the two carriers have yet decide on major deal concerns, including who would have control of the combined entity, and the full details involving share-swap transactions.

In 2005, US Airways merged with America West Airlines. It's CEO Doug Parker is a firm believer of industry consolidation, much like UAL's top man Glenn Tilton.

Airline executives believe that larger carriers are better equipped to withstand the whiplash of rising fuel costs, international competition, and diminishing air traffic.

US Airways has a market capitalization of $802 million, while UAL is valued at $1.92 billion.