Sky-high difference in airline mergers

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Sky-high difference in airline mergers

Latest deal shows how industry has changed

By Trebor Banstetter
KNIGHT RIDDER NEWSPAPERS

May 31, 2005

FORT WORTH, Texas – The proposed merger of America West Airlines and US Airways comes just four years after another immense airline combination: American Airlines' buyout of TWA.

Only a few years apart, the two deals starkly demonstrate how much the airline world has changed, analysts say.

When buying TWA, executives with Fort Worth-based American were driven by a desire to expand and defend themselves against a proposed megamerger between United Airlines and US Airways – a deal that later fell apart.

The motivation behind the America West deal, meanwhile, is that "this is the least unpleasant of all the alternatives," said Richard Aboulafia of the Teal Group consulting firm. "It beats death and destruction for everybody."

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