Reuters – Hedge funds and private equity firms will play a key role in consolidating the airline industry, US Airways (LCC.N: Quote, Profile, Research) Chief Executive Doug Parker said on Thursday.
US Airways is merging with America West Airlines (AWAIL.PK: Quote, Profile, Research) a move closely watched by industry executives who are aware that joining forces with rival carriers may be the best way to rescue their ailing businesses.
Parker, speaking at the Reuters Aerospace and Defense Summit in Washington, said private capital will be an important component of what is expected to be a future wave of airline mergers.
“There will be the need to have new money to flow in. It’s appealing to that type of investor,” Parker said, referring to hedge funds. “The business is so leveraged, that they are willing to take on a high risk, to get a high rate of return.”
