May 18, 2010 / 9:16 PM / 9 years ago

US Air CEO supports United/Continental merger

WASHINGTON (Reuters) - US Airways Group Inc LCC.N does not need to merge to survive and supports the proposed deal between Continental Airlines Inc (CAL.N) and United Airlines, US Airways CEO Doug Parker said on Tuesday.

Speaking to reporters after addressing the Washington Aero Club, Parker said he supports consolidation, even though the United/Continental deal only occurred after talks between UAL Corp’s UAUA.O United and US Airways failed to produce a merger.

“We’re doing extremely well right now, better than most of our peers, and don’t foresee any reason that we need to do anything,” Parker said. “We are encouraged by the industry’s improvements and encouraged by consolidation by others.”

He publicly supported the Continental and United plan to form the world’s biggest airline and hoped regulators would approve it.

“It makes the industry more efficient. We end up with less fragmentation. It makes the industry stronger and therefore makes US Airways stand-alone stronger,” Parker said.

Some analysts have questioned US Airways’ long-term prospects with its chances for a big merger slimmer now. The deal between United and Continental is before U.S. antitrust officials and Delta Air Lines Inc (DAL.N) and Northwest Airlines completed their combination in 2008.

Parker has been a leading proponent of consolidation as a remedy for the industry’s financial woes since he took America West Airlines into a deal with bankrupt US Airways in 2005.

US Airways said last month it expects to be profitable in the current quarter on stronger revenues. The company last turned a profit in 2007.

U.S. airlines are posting better results this year as travel demand rebounds and from relatively stable fuel prices, higher fares, and stronger ancillary revenue from bag fees and other service charges.

The industry outlook brightened more after United and Continental announced their $3.1 billion all-stock deal on May 3. Analysts expect the merger to further reduce capacity, enabling carriers to make more money on fares.

U.S. airlines shares closed lower on Tuesday amid broader market concerns. US Airways, United and Continental all fell more than 2 percent.

Reporting by John Crawley; editing by Andre Grenon

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