But Airlines Will Be Smaller, And Charge A Lot More

We've been hearing for months how mergers among the legacy US airlines to create fewer, larger carriers is an important strategy for surviving runaway fuel prices. If bigger is better, what hope is there for the smallest of the major US carriers, US Airways?

After all, US Airways CEO Doug Parker has been rebuffed twice recently in merger attempts, first with Delta, then with United. Does this mean US Airways is on the ropes?

Parker recently agreed to be interviewed by the editorial board of the Philadelphia Inquirer. A US Airways collapse would be a big deal in Philly, which Parker says is the airline's largest market, the one which generates the most revenue, and an important gateway to profitable international routes. 

Despite some industry prognostications that US Airways could soon go the way of the dodo, Parker defiantly told the paper, "If there are other airlines whose strategies are based on US Airways going away, they'd better find a different strategy. There is no imminent risk. We have thankfully done a good job of generating cash and saving it."

He added that the recent e-mailed letter signed by 12 airline CEOs has been successful in motivating Americans to pressure Congress to reform the oil markets and regulate market speculation.

Parker also told the editors what our traveling world will be like if oil prices continue their rampage. He says airlines will start collecting $650 to $700 per passenger for a ticket. Planes will fly primarily to big cities, and not a lot of small communities. Air travel will be a throwback to the era before deregulation, once again becoming a luxury.

Despite what he calls the worst crisis to face the industry in the 22 years he's been involved, Parker predicts, "The industry will work it out, and there will still be six of us, but six smaller airlines."

FMI: www.usairways.com