Bankrupt US Airways and America West Airlines are in advanced merger talks to create a national low-cost carrier rivaling Southwest Airlines in size, according to Reuters.
Together, US Airways and America West, which is No 8, would form an airline that would overtake Southwest as the sixth-largest, the Wall Street Journal said.
America West has hubs in Phoenix and Las Vegas and US Airways’ in Philadelphia and Charlotte, N.C. The combined hubs and network could result in the envisioned low-cost airliine.
“A lot of things will happen in the U.S. airline industry in the next 12 to 18 months,” Bronner, US Airways’ chairman told AP Tuesday night. “We’ll do whatever we need to survive.”
With US Airways Group Inc. in Chapter 11 bankruptcy for the second time in as many years, there are additional complications. A deal would need approval from the bankruptcy court; US Airways’ creditors — including its largest, General Electric Co; America West shareholders; unions; and the federal government.
The merger scenario would require US Airways to find $350 million to $500 million in total new funding, and possibly to arrange an additional $250 million in loans. According to the Journal report, US Airways is approaching a number of sources, including private equity firms, other regional airlines and its creditors.
