US Airways shares fall as merger doubts grow

`It looks as if this thing is facing insurmountable odds'

March 10, 2001|By BLOOMBERG NEWS

ARLINGTON, Va. - US Airways Group Inc. shares have fallen 17 percent in four days amid increasing investor doubts that the U.S. Department of Justice will approve UAL Corp.'s planned purchase of the No. 6 carrier.

Shares of Arlington-based US Airways fell $3.03, or 8.1 percent, to $34.35 yesterday, the fourth straight decline since Monday's close of $41.56. The shares are at their lowest point since October and are trading more than 40 percent below UAL's $60-a-share offer.

"The market is finally getting the message that the regulatory wave is beginning to turn against" the merger, said Tom Burnett, president of Merger Insight. "You look at what the unions are doing and the pressure from Congress, it looks as if this thing is facing insurmountable odds."

UAL's United Airlines said Wednesday that it has delayed the proposed acquisition for a second time to provide more data to U.S. antitrust regulators on two transactions with AMR Corp.'s American Airlines that are contingent upon the US Airways sale.

The International Association of Machinists and Aerospace Workers told United, the world's largest carrier, that members at both airlines oppose the plan because UAL won't provide requested job protection at the combined carrier.

Flight attendants have threatened to strike United if the sides can't agree on raises and protections linked to the purchase of US Airways.

U.S. Sens. Mike DeWine, an Ohio Republican, and Herb Kohl, a Wisconsin Democrat, said yesterday that next week they will introduce a bill that would make it unlawful for carriers with more than 15 percent of the national market to also operate more than 20 percent of the slots at New York's LaGuardia Airport and Washington's Reagan National Airport.

Should the deal go through, United and American would likely exceed the bill's slot limits at LaGuardia, and American would likely exceed them at Reagan, the senators said in a summary.

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