USAir Plans to Buy PSA, Become 6th Largest Line

USAir today announced an agreement to buy Pacific Southwest Airlines for $400 million in a deal that would create the sixth largest passenger carrier in the nation with 20,000 employees.

Edwin Colodny, chairman and chief executive officer of USAir Group, said the transaction still needs approval by shareholders and the Department of Transportation. Colodny said he anticipates “no significant opposition” and expects the deal to be completed during the first quarter of 1987.

USAir, with headquarters in Washington and a hub in Pittsburgh, is the nation’s No. 8 airline in terms of passengers flown, serving 78 airports in 31 states and Canada. It has a work force of 15,000 and a fleet of 147 aircraft.

No. 10 PSA, with 5,000 employees, is a particularly strong force in the California market and serves 29 airports in six Western states and Mexico with 55 planes.

Colodny said the acquisition would put USAir in sixth place with passengers flown domestically after the Texas Air Corp. group, Delta-Western, American, United and Northwest-Republic airlines.

Colodny said that PSA will be operated initially as a wholly owned subsidiary of USAir but that the two airlines will be merged “after a reasonable transition period.” No layoffs are planned, he said.

“USAir has a reputation for treating its employees fairly,” Paul Barkley, PSA’s chairman and chief executive officer, said in a statement. “USAir Group has assured me there will be no reduction in wage rates because of this transaction, which we believe is in the best interest of our employees.”