Standard & Poor's Betsy Snyder says the US Airways long-term future remains uncertain in the light of the recent United Airlines and Continental Airlines merger.
Snyder says US Airways is the US number four carrier but Standard & Poor's does not review the carrier as a merger candidate.
The Southwest Airlines-AirTran Airways' proposed merger also offers an increased competition for US Airways at New York's La Guardia airport and Washington Reagan airport, says Snyder.
As at 1st October, Standard & Poor's rated US Airways as B- with a negative outlook, while the new merger entity, United continental Holdings, received a B rating with a stable outlook from the rating agency.
Snyder also says that the US low-cost carriers could benefit from United Airlines and Continental Airlines capacity rationalization and higher labour costs.
Potential effect on other airlines includes American facing more 'formidable competition', while Delta could give back some of its merger revenue gains, according to Snyder.
The United Airlines and Continental Airlines merger will see a revenue upside from expanded route network but Snyder adds that there is a risk in labour costs and integration.
An expanded route network under the Southwest Airlines-AirTran Airways' proposed merger will lead to more competition for low-cost carriers, according to Snyder, and will offer more competition to Delta at its own hub in Atlanta.
Source: Commercial Aviation Online
