- The Washington Times - Tuesday, September 27, 2005

TEMPE, Ariz. (AP) — America West and US Airways finalized their union yesterday, combining to form the nation’s fifth-largest domestic carrier.

“Today we start a new chapter in aviation history,” said Doug Parker, chief executive officer of the newly combined company.

Although the airlines can operate as one carrier, they said passengers should continue to book directly with each airline as they did before the deal became final.

The airlines are still operating separate Web sites and still have two reservation systems. Flight crews, maintenance and safety procedures for each airline also will remain separate for some time.

The goal of the deal was to form a stronger airline that would compete better with lower-cost rivals such as Southwest Airlines Inc. and JetBlue Airways Corp.

US Airways is leaving court protection at a time when jet fuel has risen 43 percent in 12 months and low-fare rivals are expanding. At the same time, Delta Air Lines Inc. and Northwest Airlines Corp., the third- and fourth-largest U.S. carriers, are in their second week of bankruptcy, which means they don’t have the burden of paying creditors.

US Airways is “facing the same problem everybody else is,” Ray Neidl, a Calyon Securities USA Inc. analyst in New York, told Bloomberg News.

US Airways managers “have done a commendable job in cutting non-fuel costs, but they still have a major challenge ahead of them in reducing other costs and making a profit.”

Arlington’s US Airways has a strong presence on the East Coast and in the Caribbean. America West, based in Tempe, Ariz., operates across the West from hubs in Phoenix and Las Vegas.

Even though America West is considered the financially stronger company, the US Airways name will survive.

Beginning early next year, America West planes will begin sporting US Airways paint schemes. The company will operate 411 aircraft at first, but that number will drop by 51 as the company returns planes to leaseholders.

US Airways received final approval Sept. 16 to exit bankruptcy protection.


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