US Airways To Stick with Star - For Now

US Airways has decided to keep its code-sharing deal with United Airlines - for the time being, anyway. A code-sharing deal is where each airline is allowed to sell seats on the other airline. This arrangement brings in over $200 million annually to United.

The two airlines began code-sharing in 2002, after the government anti-trust unit said no to a merger between the two. In 2003 US Airways joined Star Alliance, which was co-founded by United in 1997. The relationship until now has been a pretty happy one. US Airways had a predominantly East Coast network from hubs in Pittsburgh, Philadelphia, and Charlotte, and United had a strong West Coast network from its hubs in Denver, San Francisco and Los Angeles.

But all good things (might) come to an end. Last year US Airways merged with America West - and subsequently gained a large route network in the West with hubs at Phoenix and Las Vegas. Because of the increased competition, there was need for dialogue. US Airways said in an SEC filing that it was talking things over with United about a few points. If the talks fail, said the airline, its "codeshare relationship with United and membership in Star Alliance could be terminated".

Which makes for good guessing. In the history of Star, there have only been two airlines to leave: Ansett Australia, which liquidated in 2001, and Mexicana, which quit code-sharing with United and subsequently pulled out of Star a few years back. If US Airways were to jump ship too, would it stay out of alliances? Or would it join another? oneworld already has American, and SkyTeam already has Delta. Then again, Star already had United.


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