Will United's Woes Spread?

Its offer for US Airways may not fly. But other carriers must pay for its labor settlement

James E. Goodwin had had enough. In November, 1999, the UAL Corp. chairman and chief executive pulled his counterpart from US Airways Group Inc. aside at a business meeting to sketch out a widebody deal: He wanted to buy the rival airline. To Goodwin, the takeover was a no-brainer. Although already parent of the world's biggest air carrier, United Airlines, UAL could strengthen its lead only through a big-time acquisition. And US Airways, with its East Coast routes, would fill the only sizable gap in United's domestic operations. But despite rounds of talks, the two sides remained miles apart on a price. So in April, sensing no chance of a compromise, Goodwin walked away.

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