MIKE ARMSTRONG: Coming up: Talk of a merger between USAirways and United is heating up. We’ll why the two airlines may become one and what it means for Philadelphia travelers. Another setback for Merck. The FDA says no go for its new cholesterol pill. Philadelphia Business Today starts now.


MIKE ARMSTONG: It’s been widely reported that United Airlines and USAirways are talking about a merger. Why now and what does it mean for Philadelphia International Airport? First, the why. Fuel prices are soaring, business trips are down and most airlines are losing money, even after labor concessions and lots of ticket increases. A merger would mean several things: there’d be fewer planes, fewer flights and no overlapping competition. And instead of two accounting and marketing departments, they could downsize to one. Also, with fewer competitors, it would be easy to raise ticket prices. What would this mean for Philadelphia? Probably not much. Philadelphia is a critical hub for USAirways and it has a large and growing international service. There’s no reason to change that. But remember, at this point, it’s all still talk.

Merck had high hopes for Cordaptive, its new cholesterol-lowering pill, but late Monday, the FDA said the drug was not approvable. The FDA didn’t even like the name Cordaptive. Analysts had projected the pill could generate $600 million in sales for Merck by 2011. The news isn’t all bad for Merck. European Union regulators last week approved Cordaptive for sale in Europe.

Metrologic Instruments is being acquired by Honeywell International for about $720 million. The deal comes 18 months after a California private equity firm bought Blackwood, NJ’s Metrologic for at least $380 million. Metrologic makes bar code scanners and image processing software. It had revenue of $246 million last year. Honeywell, another NJ company, says it will merge Metrologic into its Honeywell Security Business unit.

That’s it for today. At the Inquirer, I’m Mike Armstrong for Philadelphia Business Today.


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