US Airways open to merger: CFO

Derek Kerr, Executive Vice President and Chief Financial Officer of US Airways, poses for a portrait during the 2010 Reuters Travel and Leisure Summit in New York February 23, 2010.

NEW YORK (Reuters) - US Airways (LCC.N) is open to merging with another U.S. carrier, its chief financial officer said on Tuesday, adding that the domestic airline industry has too many major players.

Speaking at the Reuters Travel and Leisure Summit in New York, Derek Kerr said US Airways is not in merger talks with another carrier because "it takes two to tango."

US Airways, the fifth largest U.S. airline, is not interested in merging with a foreign airline, Kerr said, because that would not cut capacity in the domestic market.

"I don't think that will make a difference," he said. "Domestic is where there is too much fragmentation and there are too many airlines."

US Airways is no stranger to mergers: it was acquired by America West in 2005 and it tried, and failed, to buy Delta Air Lines (DAL.N) in 2007 through a hostile bid.

"It's five major carriers. It's too fragmented," Kerr said of the U.S. airline industry. "You have too many hubs, all chasing the same passengers trying to connect through the country. We believe that it needs to be consolidated."

The airline industry has lost $50 billion in the past 10 years, including $11 billion in 2009 alone, according to the International Air Transport Association. The trade group expects the industry to take at least three years to recover from the slump in demand caused by the recession.

"Consolidation is one of the major ways this industry can become profitable," Kerr said.

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Earlier on Tuesday, United Airlines UAUA.O Chief Financial Officer Kathryn Mikells also said the airline was open to a merger, adding that the industry is poised for consolidation.

Asked why US Airways was not approaching another carrier, Kerr said: "It's difficult for the No. 5 player to make a move on No. 1 through 4." The four largest U.S. carriers are Delta, American Airlines AMR.N, United and Continental Airlines

CAL.N.

Sources had told Reuters US Airways had spoken with United Airlines about a possible merger in 2008, when Delta was merging with Northwest. The talks ended as United sought an alliance with Continental instead.

United Airlines and US Airways are both part of Star Alliance, a global network of carriers that allows them to streamline costs while sharing revenue.

Star Alliance, which competes with Oneworld and SkyTeam, is seeking more partners, Kerr said. United's Mikells had also said the carrier was looking to add partners to its alliance, especially in regions such as South America and Africa.

Kerr said alliances are not complete substitutes for mergers but do help in getting some synergies. "One thing that is very hard to do across alliances is cost-cutting," he said.

(Reporting by Jui Chakravorty; Additional reporting by Deena Beasley; Editing by Richard Chang)