US Airways Execs Won’t Push for Firm’s Breakup
US Airways Group Inc.’s top two executives said Tuesday that they won’t recommend that board members sell the airline in pieces after the breakdown of an acquisition by UAL Corp.’s United Airlines.
Some rivals had made unsolicited inquiries about buying parts of the airline, Chairman Stephen Wolf and Chief Executive Rakesh Gangwal said in a statement.
The two said they want to reassure workers “because the uncertainty regarding a potential breakup weighs heavily on our employees.” US Airways directors are scheduled to meet July 18 to discuss merger alternatives.
US Airways and United last week said they were in talks to abandon UAL’s year-old proposal to buy the smaller Arlington, Va.-based carrier for $12.3 billion. The combination faced opposition from regulators and some members of Congress. UAL’s mounting losses also discouraged the purchase, analysts said.
“The only way [US Airways] can keep it together is if they substantially cut costs, and that means salary cuts,” said George Ireland, a Ring Partners investment manager with long and short positions in airline stocks.
US Airways said it will remain focused on working with employees to “jointly address the challenges and opportunities.”
US Airways shares fell 10 cents to $16.40, and UAL fell 11 cents to $33.98, both on the New York Stock Exchange. The statement was released after trading closed.
