US Air, UAL shares up on reports of merger talks

Shares of UAL Corp (UAUA.O) and US Airways Group (LCC.N) rose on Thursday in the wake of news that the two airlines were in merger talks.

Neither airline confirmed the talks on Wednesday. [ID:nN07137095]

"Clearly these potential talks are a massive positive for US Airways and United, but I think it speaks volumes to the changing landscape in the airline industry," said Morningstar Equity analyst Basili Alukos.

He said a potential major airline merger, combined with the capacity cuts of 2008 and 2009 hint that the industry "could be en route to earning its cost of capital."

"History is not on the side of the airlines, but maybe the horrible losses encountered recently have scared newcomers enough to reconsider starting an airline," Alukos said.

Read Full Article from Reuters

- Posted: 2010-04-08 10:26:39

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