United Airlines parent drops merger talks

By Lisa Kerner

Charlotte, N.C., May 30 - UAL Corp. chief executive and chairman Glenn Tilton told employees United Airlines will not pursue a merger at this time.

It was reported that the company had been in talks with US Airways Group, Inc.

Tilton, who called UAL a proponent of industry consolidation, noted rising fuel costs but did not say the rise had any impact on the board's decision to forego further merger talks, according to a form 8-K filing with the Securities and Exchange Commission.

In his message to employees, Tilton highlighted the company's solid cash position and "$3 billion in unencumbered assets that give us some flexibility in an environment that will continue to be extremely challenging."

With the status quo no longer sustainable, Tilton said more must be done beyond grounding aircraft and reducing capacity.

According to Tilton, the company plans to "size the business appropriately," develop new revenue sources, reduce non-fuel costs and cut planned capital expenditures.

UAL is the parent company of Chicago-based United Airlines, which operates more than 3,200 flights a day and employee 55,000 people worldwide.

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