Oil costs hold key for US Airways

0 Comments | Philadelphia Inquirer, The, May, 2008 | by Linda Loyd Inquirer Staff Writer

Now that talks between United Airlines and US Airways have fallen apart, what lies ahead for US Airways, which shuttles two-thirds of the passengers at Philadelphia International Airport? Another attempt at consolidation? An alliance with a carrier? The short answer: It depends on the price of crude oil.

If oil climbs to $175 a barrel, all airlines will be in deep trouble - and several likely will file for bankruptcy, as early as next year. But if oil drops to $70 a barrel - where it was six months ago - or even to $100, more airlines will be able to go it alone for longer. US Airways chief executive Douglas Parker is a big proponent of industry consolidation through mergers, and US Airways Group Inc. itself is the product of a 2005 merger with America West Holdings Corp....