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Airline Pilot Central - NEWS
May 30 (Bloomberg) -- UAL Corp.'s United Airlines suspended merger talks with US Airways Group Inc. because of potential labor costs and is instead seeking an alliance with Continental Airlines Inc., two people familiar with the talks said.
United Chief Executive Officer Glenn Tilton told US Airways CEO Doug Parker of the decision in a meeting yesterday in Chicago, said the people, who asked not to be identified because the session was private. Discussions with Continental are progressing, the people said.
An alliance may allow United, the world's second-largest carrier, to sell tickets on Continental's international routes without having to combine workforces or win regulatory approval. Jet fuel, the airlines' biggest cost, has surged 84 percent in the past year, spurring consolidation in the industry.
``United is so thin over the Atlantic that an alliance with Continental makes sense,'' said Robert Mann of consulting firm R.W. Mann & Co. in Port Washington, New York. Cooperation would boost revenue even if the carriers didn't cut seat capacity, he added.