US Airways, United said to end talks on merging

Updated: May 29, 2008 - 9:29 PM

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United Airlines told US Airways on Thursday that it had decided not to continue talks on a possible merger, people with direct knowledge of the situation said.

The chief executive at US Airways, W. Douglas Parker, was told of United's decision during a meeting with its chief executive, Glenn F. Tilton.

The airlines are expected to announce today that the discussions have ended, people who spoke on condition of anonymity said late Thursday. They said the airlines plan to cite difficulty and expense of combining labor contracts, particularly those of pilots.

Officials at United and US Airways declined to comment.

United's decision not to pursue the merger marks the second time in a month that it has failed to reach a deal with another major airline, only this time it was the company that spurned the idea. The board of Continental Airlines decided on April 27 not to continue discussions with United, saying a deal was not in the airline's best interest. United has held talks since then with Continental about a marketing agreement, similar to an arrangement that involves Continental, Delta and Northwest.

Tilton and Parker have been the leaders among airline industry executives in calling for consolidation, saying that it is inevitable given the stiff competitive challenges.

Several carriers plan to increase fares, eliminate routes and retire aircraft to cut costs.

NEW YORK TIMES