United's CEO says US Airways deal still 'doable'
Thursday May 10, 2:19 PM EDT
By Jeremy Pelofsky
WHITE SULPHUR SPRINGS, W.Va., May 10 (Reuters) - The head of United Airlines, James Goodwin, said on Thursday he was optimistic the carrier's proposed $4.3 billion acquisition of US Airways Group Inc. (U) would ultimately win approval from U.S. antitrust authorities.
"I believe we still have a very doable transaction but because of its complexity, it's going to take time," Goodwin, chairman and chief executive of United and parent company UAL Corp. (UAL), told Reuters in an interview at meetings of the Business Council.
One concern the antitrust enforcers at the U.S. Justice Department have focused on is whether United, the world's biggest airline, would dominate some East Coast airports like Washington Dulles.
To appease the antitrust division, the airlines have said they will divest some Washington-based assets, sell some of US Airways to AMR Corp.'s (AMR) American Airlines, partner the East Coast shuttle with American and sell other US Airways units.
However, vacancies in the top slots at the antitrust division because of a change in administrations has stymied talks between the airlines and the Justice Department.
"The staff level is still there, but the decision-makers that ultimately will have to deal with us and working through resolutions just aren't in place yet," Goodwin said.
In Washington, the U.S. Senate Judiciary Committee on Thursday approved President George W. Bush's pick to head the antitrust division, Charles James, but the nomination must still receive approval from the full Senate and it is unclear if that will happen soon.
"At this point, we're not in a position really to speculate" on when the deal might close, Goodwin said. "We're going to have to continue to respond to the issues and try to provide them the information they need to be able to see the value we see in this transaction."
The company already has said its previous goal of closing the transaction in the second quarter would not be met.
Some antitrust lawyers have said United could be hoping that soon-to-be appointed Bush administration officials might be more receptive to the merger and some experts went so far as to question whether approval was possible at all.
Separately, Goodwin said the business community is continuing to cut back on corporate travel although the leisure travel industry has not tapered off.
"We saw early in January the signs that business travel would decline and that's continuing," he said. "Consumers are continuing to travel, more leisure travel and less business travel."
Shares of UAL were down 9 cents to $37.42 in early afternoon trade on the New York Stock Exchange, while US Airways shares were up 10 cents to $29.40.
©2001 Reuters Limited.
Under Bush's Administration, I am confident that the merger will go through. By merging these two airlines, it will create another giant to have severe competition with AA-TWA. Plus, other airlines like Delta, Continental etc will join alliance to compete with AA and UA. That will increase competition.
Just my 2 cents.
What do you guys think?