The parent of America West, issued a separate statement late Wednesday saying it has been contacted by a number of airlines expressing interest in a possible deal, ranging from a strategic alliance to a merger or similar business combination.
America West did not identify the airlines and said it would have no further comment on the possible discussions. A spokesman at America West also declined further comment.
America West, based in Phoenix, also has hubs in Las Vegas and Columbus, Ohio. It serves more than 60 North American destinations, including six in Canada and one in Mexico.
United Airlines, based in Chicago, serves more than 150 destinations in the U.S. and another 29 worldwide. Along with Chicago, it has hubs in Denver, London, San Francisco, Tokyo and Washington, DC.
In its statement, America West said “there can be no assurance that America West will engage in discussions or enter into an agreement with any other company regarding a possible transaction.
However, analysts said speculation was now very high that United would acquire America West, since such a move would further strengthen United’s position in the West, where No. 2 carrier American Airlines has been seeking to beef up its presence. In November, American Airlines’ parent company, AMR Corp., bought low-cost carrier Reno Air Inc. for $124 million.
United already has a dominant hold on the Denver market, and America West would give it a strong position in Phoenix.
“At its most basic level, America West is ripe for the picking and could fill an important void in United’s network,” said Joseph Schwieterman, director of the Chaddick Institute of DePaul University in Chicago. Interest in America West from other carriers could be strong, he said. “There could be a battle for America West. We could see a bidding war here,” Schwieterman said.
At Wednesday’s closing price of $19.31 a share and with 39.6 million shares outstanding, America West would have an apparent market capitalization of around $765 million.
Any deal would come at a time when the largest U.S. airlines have been hit by weakness in Asian markets, a slowdown in business travel, labor problems and competition from regional carriers such as America West.
Although profits at some major airlines have slipped, America West on Wednesday bucked an industry trend and surprised Wall Street with a higher-than-expected profit.
America West said its profits rose to $20.15 million, or 51 cents a share, from $20.09 million, or 43 cents a share, a year earlier. The results, a fourth-quarter record for the airline, exceeded Wall Street expectations of 39 cents a share.