The latest news in the airline industry is a possible merger between United Airlines and US Air. This is not the first time the two have considered a merger. United attempted to buy US Air in 2001 but was unable to get approval form federal regulators. Talks between the two collapsed in 2008 shortly after the Delta-Northwest merger. Although US Air is the smaller of the two airlines, it appears that it would try to purchase United in an all-stock deal. No word yet from the unions.

In the meantime, other sources say Continental may try to outbid US Air for United. And while all this is going on in the US, British Airways and Iberia have announced that they will merge and become the International Consolidated Airlines Group SA holding company. Each airline will continue to fly under its current brand name.

As all this goes on, the one airline that does not come up in merger rumors is American Airlines. American’s CEO, Gerard Arpey said “Inevitably, there will be consolidation around the world in terms of the airline industry, I think generally fewer carriers will be better for the industry, but it’s not a panacea.” He added that American would concentrate on building its hubs in New York, Los Angeles, Miami, and Dallas/Fort Worth, adding that he felt American was “well positioned” in the industry.

While American may not be merging, its list of partner airlines grows as the oneworld® alliance adds new partners. In the last few months financially troubled Japan Airlines (JAL) agreed to remain a member of the group, turning down a strong offer from Delta to join the SkyTeam alliance, a move that would have greatly weakened American’s presence in Asia. JAL and American have filed for anti-trust immunity to increase their co-operation across the Pacific.

The US Department of Transportation gave tentative approval in February to the application by oneworld’s transatlantic partners American Airlines, British Airways, Iberia, Finnair and Royal Jordanian for anti-trust immunity across the Atlantic – and the European Commission began market testing of proposed remedies in a key step towards approval of the proposed transatlantic joint business agreement between American, BA and Iberia.

Mexicana joined the alliance last year, adding its many routes to Latin America. Russia’s S7 airlines will join later this year, opening up many locations throughout Russia and the former Soviet Republics to alliance members.

Kingfisher, the leading domestic carrier in India, announced that it would join the alliance in 2011. This will give oneworld passengers access to 58 cities in India, home of one of the world’s fastest growing economies.

So this remains a busy and rapidly changing time in the airline industry. Airlines merge, alliances grow, legal waivers are requested. The only thing we cannot talk about is the industry being profitable. Hopefully all these changes will bring that about.