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United-US Airway Merger Fails to Take Wing
UAL Corp.'s United Airlines has pulled out of its controversial $4.3 billion takeover of the US Airways Group Inc., citing its growing unease with the antitrust hurdles facing the deal, a source familiar with the proposal said on Sunday.
United Airlines, the nation's second-largest carrier, believed that it would no longer be able to get the proposal past federal antitrust enforcers, scuttling a merger first announced in May of last year that would have shaken up the U.S. airline industry.
United had promoted the agreement's competitive and consumer benefits, but it faced a barrage of criticism over industry concentration crimping competition and hiking air fares.
The source said that UAL officials made the decision to pull out of the deal last week and informed US Airways on Friday.
"We still believe the merger was the right course for us," the Washington Post quoted an unidentified United executive as saying. "But we can't satisfy the Department of Justice concerns. So we decided to abandon the transaction."
Spokesman for United and US Airways declined to comment.
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