America West, US Airways explore possible merger
David Bronner, chairman of US Airways Group confirmed the airline is in discussions with Phoenix-based America West Holdings Corp. about forming a combined airline, according to the Associated Press.
Several news organizations are reporting that the likeliest scenario is for America West to invest $100 million in US Airways, which plans to emerge from bankruptcy protection later this year, rather than an outright merger.
America West reported a first quarter profit of $33.6 million this week, but a merger would be very costly in terms of integrating equipment, workforces and information technology, during a tough economic period for airlines. Analysts say America West is interested in a stake in US Airways so that it can benefit from US Airways strong East Coast network to feed its routes in the western United States.