United-US Airways deal would have little effect at Logan

United and US Airways are reportedly in merger talks. If a deal goes through, it would create Logan's largest carrier. (Janet Knott/Globe Staff)

A merger between United Airlines and US Airways would change little at Logan International Airport in Boston.

While financial and industry analysts predict a United-US Airways combination would likely lead to seat-capacity cuts on overlapping routes - cost savings that would be the main impetus for merging - they don't expect a reduction in flights or routes serving Boston. That's because there's hardly any head-to-head competition between the two carriers in Boston, according to the Massachusetts Port Authority, which runs Logan.

Analysts don't expect such a merger would offer better service here, either.

"It would not measurably improve convenience for Boston-area travelers," said Henry Harteveldt, principal airline analyst for Forrester Research Inc.

Speculation about a deal started spreading on Wall Street after Continental Airlines Inc. pulled out of talks with United on Sunday. It follows the recently announced mega-deal between Delta Air Lines Inc. and Northwest Airlines Corp.

United and US Airways declined to comment.

The closest the two carriers come to directly competing in Boston is on the route to the nation's capital, with US Airways arriving at Reagan Washington National Airport and United landing 30 miles away at Washington Dulles International Airport. Some analysts speculate the duo would trim US Airways' Philadelphia hub or United's Dulles hub.

A United-US Airways combination would create Logan's largest carrier, with 25.6 percent of the passengers, based on 2007 data. Pairing Delta with Northwest would roll together 21.7 percent of Logan's passenger market share. American Airlines Inc., currently the biggest carrier with 16.7 percent, would be third.

Nationally, removing another major hub-and-spoke carrier is "almost guaranteed" to raise ticket prices, Harteveldt said.

That's traditionally been an antitrust concern, said Evan Stewart, a partner at Zuckerman Spaeder. The Department of Justice already opposed a United-US Airways merger in 2001 because the resulting airline would have a lock on the Washington, D.C., market. "That's a strike against this," Stewart said, "but I don't think it's three strikes."

Such a merger could have a better chance of approval today because the industry has changed. Low-cost airlines now carry 30 percent of travelers, up from 10 percent in 2001. US Airways has retreated from the Baltimore/Washington International Thurgood Marshall Airport. And surging fuel prices threaten to torpedo the recently profitable US Airways with losses for the next three years, according to a Morgan Stanley report.

Ticket prices are likely to rise even if United and US Airways don't merge, said Ray Neidl, a financial analyst at Calyon Securities. "There are going to have to be major airfare hikes regardless with oil above $100 a barrel."

Nicole C. Wong can be reached at nwong@globe.com.