UAL, US Airways to Extend Merger Review

UAL Corp. and US Airways Group Inc. reached an agreement with the Justice Department to extend review of their planned merger to April 2. The extension comes two days after new congressional opposition surfaced to the plan, based on a government report that found that combining the two airlines could eliminate or reduce competition for some 16 million travelers in 290 markets. Glenn Engel, an analyst with Goldman, Sachs & Co., said extending the review into the new administration of President-elect George W. Bush doesn’t bode well for the transaction. But Lawrence Nagin, general counsel for Arlington, Va.-based US Airways, said “the merits of the merger are positive for any administration.” Nagin declined to discuss specifics of the talks with the Justice Department. UAL couldn’t immediately be reached for comment. A Justice Department spokeswoman declined to comment except to say the investigation is continuing. US Airways shares closed up $1.19 at $40.81, while Chicago-based UAL closed off 25 cents at $35.88. Both companies trade on the NYSE.