US Airways isn’t done with mergers yet

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Wallach criticized US Airways' customer service record and said its seniority integration problems have created a "toxic stew" within its pilot ranks.

"We do not view a marriage with US Airways as anything remotely resembling a solution," Wallach said.

Sara Nelson, spokeswoman for United's unit of the Association of Flight Attendants, said Tuesday the group will oppose any consolidation scenario that would impede or disrupt its efforts to gain improvements for flight attendants. However, she said it hasn't taken a position on a US Airways deal.

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"We know that even after an announcement, many things can change with these deals," Nelson said. "We've said consistently that we would not be making a statement supporting or opposing any deal without first fully reviewing the facts with our professionals."

If they joined forces, the carriers would compete with newly proposed Delta-Northwest for the title of world's largest airline. Together, US Airways and United accounted for 201.6 billion revenue passenger miles in 2007.

Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Penn., says he understands that the airline industry needs to find ways to offset fuel costs. But it's unfortunate that US Airways would reshuffle its operation just as it's finishing its 2005 merger.

"Right now, US Airways, they're at least trying to make some progress. You throw this on top of it, you're going to have management distraction, and time and attention away from apparent customer service problems," Mitchell said.

But analysts say there may be no better solution. United, US Airways, Delta Air Lines and Northwest Airlines Corp. are struggling with fuel expenses and lost more than $1.2 billion combined in the first quarter, excluding special items.

US Airways shares rose 34 cents, or 4 percent, to close Tuesday at $8.96 and UAL Corp. gained 12 cents, or 0.8 percent, to $14.93.

Oil prices and the slumping economy are forcing airlines to make "dramatic changes," Parker told employees earlier this month in a newsletter.

"If done properly, (consolidation) could result in a much healthier industry which would be good for our employees, our customers and the communities we serve," Parker said.

While mergers can be tough on employees, US Airways has shown it can eventually run a smooth operation. After a horrible customer service record in 2007, the carrier now sits near the top of the industry in on-time arrivals.

It's also merged a number of employee groups from the two airlines onto a single contract, built a joint reservations system and started a flight operations center in Pittsburgh.

While he wants to merge his pilots contracts, Parker said he has no problem keeping them separate. The benefits of a combined pilot group would mean maybe $10 million in savings for the airline, Parker said, not much for an airline with $11.7 billion in annual revenue.

"There is no large financial benefit that we are not receiving because we don't have one integrated pilot contract right now or one seniority list," Parker said.

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