US Airways may not have been able to merge with United Airlines, but the two have inked a marketing and codesharing alliance that may set off an equally widespread industry reaction.
The move also marks the continued restructuring of US Airways without the aid of the bankruptcy court even as United struggles. Buoyed by word of a tentative loan guarantee of almost $1 billion from the Air Transport Stabilization Board, US Airways moved to make the United deal, which would be the largest domestic codesharing ever considered by the Department of Transportation.
Independent consultant Robert Mann predicts that senior executives at the most vulnerable competitors, such as Leo Mullin at Delta Air Lines "are going to ask for domestic codeshare exceptions". Mullin had already warned that Delta would not sit still if US Airways signed a major codeshare.
US Airways also entered an eight-year agreement with Midway Airlines under which the Raleigh-Durham-based carrier will operate as a US Airways Express carrier from October.
Midway, under bankruptcy court protection since before the 11 September attacks, will shut down until then. It will initially operate five 50-seat Bombardier regional jets, increasing to 18 jets by April 2003.
No proposed codeshare agreements between major domestic airlines have been submitted since Congress passed a law mandating regulatory review in 1998. Congress acted after Northwest and Continental Airlines created such an alliance as part of Northwest's plan to buy an equity stake in Continental.
United, meanwhile, was waiting to hear whether it would earn loan guarantees. While US Airways offered collateral and labour peace as preconditions, United has neither on the table.
Source: Airline Business
