us_airways_plane

Both the NY Times and now the WSJ are reporting that serious talks are underway.

The combined operations—including those of America West, which Phoenix-based US Airways merged with four years ago but still, like a snake trying to swallow a recalcitrant mongoose, can’t seem to digest it—would create the nation’s second-largest carrier, after Delta.

The Times:

The negotiations represent the latest efforts to consolidate the struggling airline industry, which lost $60 billion over the last decade as fuel costs soared and the number of travelers fell. Both companies have been vocal in calling for greater partnerships.

Of the major airlines, only the low-cost carrier Southwest Airlines turned a profit last year. And analysts have said that despite the steep cuts in capacity by all the airlines in the last couple of years, there are still too many airlines chasing too few travelers. A combination of United and US Airways could help both return to profit faster than they could going it alone.

Both stories note the talks are tentative and could fall through. The WSJ notes this fly in the ointment:

US Airways, itself the result of a 2005 merger of the old US Airways and America West Airlines, still hasn’t been able to combine its pilot and flight-attendant ranks because the unions won’t agree on seniority. And US Airways pilots have a stipulation in their contract that would raise their wages back to pre-bankruptcy levels if a merger occurs that would trigger a change of control—another aspect United and US Airways would have to confront.

The Arizona Republic … has a web post about the NYT story.