US Airways CEO sees airline industry heading down

By Kyle Peterson

PHOENIX (Reuters) - The chief executive of US Airways Group Inc (LCC.N: Quote, Profile, Research, Stock Buzz) warned on Thursday that the U.S. airline industry is heading into a downturn as it grapples with record high oil prices and a weakening economy.

"Our industry is in a mess, if you haven't noticed," said Doug Parker, speaking at the U.S. No. 5 airline's headquarters near Phoenix.

"We're about to head into what looks like another downturn," he said at the company's annual media day.

The grim assessment summed up Wall Street sentiment. The Amex airline index .XAL was down 3.6 percent, and US Airways shares dropped 4 percent.

Oil jumped more than 2 percent to match a record high of more than $102 a barrel on Thursday. While costs are increasing, demand has thus far held up, said Parker.

In an interview with Reuters, Parker criticized Delta Air Lines Inc (DAL.N: Quote, Profile, Research, Stock Buzz) and Northwest Airlines Corp (NWA.N: Quote, Profile, Research, Stock Buzz) for their tactics in pursuing a potential merger. He argued that too much pressure was put on their pilots.

"I don't think it's fair to put the pilots in that position," Parker told Reuters. "In some sense, I feel for the pilots at Delta and Northwest."

The prospect that a wave of mergers would help stabilize the volatile industry, which emerged from a five-year slump in 2006, dimmed earlier this week.