Airline merger talks fail
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United Airlines Chief Executive Officer Glenn Tilton informed US Airways Chief Executive Officer Doug Parker yesterday that United is not interested in a merger "for now," according to a source familiar with the meeting.
Mr. Tilton told Mr. Parker the decision was made by United's senior management and its board, the source added.
It was not clear when or if United officials might be willing to revive talks.
US Airways officials were expected to tell employees about the decision today.
Mr. Parker arrived in Chicago yesterday willing to discuss a merger, even though US Airways had become "frustrated" by the lack of progress over the last month, the same source said earlier this week.
The New York Times reported Tuesday that discussions between the two airlines "appear to have fallen apart." Mr. Parker asked Mr. Tilton on Wednesday if the report was true and the United CEO reassured Mr. Parker that "was not the case," this source said Wednesday.
Before yesterday's meeting, it had been at least a month since active discussions took place between the two carriers, according to the source. It also had become increasingly clear that United was not ready to discuss final terms, including issues of leadership and potential terms of a stock conversion.
Still, Mr. Parker flew to Chicago yesterday with the "hope but not the expectation" of progress, the source said. US Airways hoped a deal could come before the US Airways board on June 11.
The two airlines began discussing a potential deal more than two months ago.
Mr. Parker and Mr. Tilton have been among the loudest cheerleaders for industry consolidation this decade, as a way of solving some industry ills.
Mr. Parker in 2005 engineered the merger of US Airways and America West Airlines, based in Tempe, Ariz. The combined company still employs about 1,800 in the Pittsburgh area, down from more than 12,000 prior to 9/11.
In early 2007, though, Mr. Parker lost a hostile takeover bid for Delta Air Lines, which now intends to combine with Northwest Airlines.
United was spurned in April after Houston-based Continental Airlines decided against a merger of those two carriers.
First Published May 30, 2008 12:00 am
