Brand new US Airways grapples with challenges

Brand new US Airways grapples with challenges
WASHINGTON - US Airways and America West Airlines formally completed their merger late on Tuesday. The merged entity will be called US Airways Group Inc.

US Airways plans to offer low-cost efficiency combined with better reachablity as it targets the bigger carriers. US Airways would be in direct competition with leading low-cost airlines Southwest Airlines Inc and JetBlue Airways Corp.

The merged group is the fifth largest carrier in the country. Doug Parker, chief executive of the combined company said in a statement, "Today we start a new chapter in aviation history." However, even though the group is a single entity, passengers are required to book separately with the respective airlines as they did before the merger was announced. Even basic services like flight crews, maintenance and safety procedures would remain separate for some time before a concrete plan towards merging these services is worked out.

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The merger of US Airways and America West Airlines is the most high profile one since American Airlines merged with TWA in 2001. It also happens to be the biggest merger since the post-9/11 depression that swamped the aviation industry. High fuel costs compounded by the spiraling prices since Hurricane Katrina wrecked havoc on the US Gulf Coast have forced major carriers to put on their thinking caps and US Airways has a better chance of being competitive because of the merger. Commenting on the pros and cons of the deal, Joseph Schwieterman, a former United Airlines official and transportation expert at Chicago's DePaul University said, "The real excitement starts now as they gradually merge two operations. They've got the two-year window but it will be a delicate act. US Airways employees especially have been promised better times are ahead before only to be disappointed." It is reported that the new US Airways would be employing 40,000 people and cater to 225 destinations including Canada, Europe and Mexico.

However, the airline got off to a weak start on the New York Stock Exchange and dipped by more than 8 percent to $19.30 as the investors debated whether the merger was a good business move.