U.S. Official Expects Rejection of Merger

Transportation Secretary Norman Y. Mineta said he expected the federal government to reject UAL Corp.’s proposed acquisition of US Airways Group Inc. Asked if he thought the merger was dead, he replied: “If I were to read the tea leaves as they are right now, yes.”

Mineta did not offer any reasons for his beliefs. He said that even if the United Airlines-US Airways proposal is rejected, other airline mergers could receive federal approval.

The Transportation Department does not approve airline mergers; that role falls to the Justice Department, which has yet to make a decision. Justice officials initially set an April 2 target for completing its antitrust review of the $4.3-billion deal, but have missed the deadline as they review the additional information they asked for.

Several lawmakers have criticized the proposed deal, saying the combined airline would dominate several key airports. Legislation pending in both houses of Congress would halt all airline mergers while the effects of such combinations are studied.

Shares of US Airways rose $1.20 to $24.25 while UAL rose 54 cents to $35.64, both on the NYSE.