When US Airways and America West proposed their merger in May, airline executives predicted the new, leaner carrier could make money despite $50-per-barrel oil.

Now, the question is: Can it still make money with oil hovering near $60?

While America West is not yet guaranteeing profitability with fuel prices that high, it told employees in a newsletter yesterday that the new US Airways can still be "a survivor" and questioned how many other airlines will stick around if oil stays near $60. It predicted several would fail or file for bankruptcy protection, resulting in a decline in the number of seats industry-wide and helping it operate more profitability.

Airline observers agree that the new US Airways, if it is able to save a promised $600 million annually as a result of the merger, can hang on despite the high oil prices.

"It's not going to be a pleasant existence and it will not be one they wish for, but I do not see that knocking them out of the ballgame," said Darryl Jenkins, an airline consultant based in Marshall, Va.

Added local airline analyst Bill Lauer: "I don't think that's impossible. Out of the gate, it is a question of how long $60 oil persists and whether or not the balance of the industry will permit an adjustment in ticket pricing to reflect that over time."

Responding to the spikes in fuel prices -- traditionally the industry's No. 2 expense behind labor -- airlines have been able to squeeze through nine fare increases in the last 12 months, according to Jenkins. But most have been small, not enough to make up for the run-up in oil.

"We are a long ways from the promised land," Jenkins said.

But Jenkins and Lauer both disagreed with America West's prediction that future bankruptcies or liquidations from rivals will result in fewer seats for the industry -- producing a greater likelihood of profit for the new US Airways.

"I don't buy that argument," Jenkins said. "I know they all believe that. I, on the other hand, do not." Just look at past periods of turmoil for the airline industry, Jenkins said.

In the early 1990s, when Eastern Airlines and Pan Am collapsed, the supply of seats actually went up once other carriers competed for routes of the failed carriers. "If we have liquidations, I doubt if we will see any capacity reductions," Jenkins said. "These guys never show much, if any, restraint."

US Airways and America West are still hoping to complete their merger by September or October.

They still need the approvals of a U.S. bankruptcy judge, US Airways creditors, America West shareholders and the federal Air Transportation Stabilization Board, which backed loans to both carriers following 9/11.

The new company would be run by Doug Parker, currently chief executive officer of Tempe, Ariz.-based America West, and a complete integration of operations could take more than two years to complete. The carrier would use the US Airways name.