I cannot wait to see the responses to these heretical statements. ;)

So would the big winners be we CO elites based out of DEN, who would suddenly gain an enormous number of additional choices?

You could argue that our status would be diluted by the hordes of UA elites, but it's not like we don't compete with the masses of IAH- and EWR-based CO elites on most of our flights already.

chicagotribune.com

United stands ready to merge

Continental deal hinges on Delta, Northwest union

By Julie Johnsson

TRIBUNE REPORTER

February 15, 2008


United Airlines is in advanced negotiations to combine with Houston-based Continental Airlines and is poised to quickly seal a deal if Delta Air Lines and Northwest Airlines merge, a person close to the airlines said Thursday.

However, Chicago-based United hasn't ruled out pursuing Delta if the Atlanta-based carrier is unable to overcome labor differences with Northwest, sources said.

If a United-Continental deal is achieved, Continental Chief Executive Larry Kellner likely would run the company, while United CEO Glenn Tilton would be chairman of the board, sources said. The management team, as well as the board of directors, would be drawn from both carriers.

Not settled is where the merged airline would be located. That would be determined later, and the choice of a headquarters is not expected to be a deal breaker, sources said.

In the meantime, the situation remains fluid, with United keeping its options open. Doing so gives United greater leverage in its negotiations with both airlines, as well as a fallback in case talks with Continental falter, said people familiar with the situation.

The jockeying for power and position is playing out across the airline industry as carriers contemplate massive consolidation that would remake aviation in the U.S.

While talks involving United, Delta, Northwest and Continental have drawn headlines, every major carrier is exploring potential mergers, sources said.

This isn't the first time that United has pursued a merger with Delta or Continental. Either arrangement would create the world's largest carrier, with relatively little overlap in operations.

Both Continental and Delta have large bases in New York, where United is weak, and a large array of flights to Europe and Latin America that would fit well with United's robust trans-Pacific routes.

A decade ago, United, the nation's second-largest carrier to American Airlines, came within hours of announcing a deal with Delta, the No. 3 carrier. However, talks failed when the two sides were unable to resolve a labor issue that emerged late in the process, sources said.

And United and Continental seriously considered a tie-up last year, as US Airways made a hostile bid for Delta. But those talks foundered when the carriers could not resolve who would lead the combined company.

Continental likely would join the Star Alliance, a global marketing venture whose founders included United and Lufthansa AG, a source said. Continental's hub at Newark would provide the New York gateway craved by Lufthansa and other Star members, as well a sizable network of flights across the Southern United States.

Like Delta and Northwest, Continental is a member of SkyTeam, the global marketing alliance dominated by Air France-KLM Group. But Continental's ties aren't as deep as those of its peers.

Delta and Northwest last year sought antitrust immunity on trans-Atlantic flights, which would enable them to coordinate schedules and other services with SkyTeam partners Air France, KLM, Alitalia and CSA Czech Airlines. Continental opted not to participate in the venture.

Continental, the nation's fourth-largest airline, would prefer to remain independent but determined it wouldn't remain on the sidelines if larger players merged.

"If we see something, we won't hesitate to act aggressively," Kellner told analysts last month.

Tentative merger overtures began last fall as airline stocks plummeted amid skyrocketing oil prices and turned into serious negotiations as Delta's board in January authorized CEO Richard Anderson to explore a deal with either United or Northwest.

"They were in a really good position to play United off against Northwest," said Roger King, airline analyst with CreditSights Inc.

However, United refused to be drawn into a bidding war, and Anderson turned to Northwest, his former employer and SkyTeam ally.

Delta and Northwest are close to a deal but are waiting while their pilot groups hammer out a framework for resolving seniority and other issues, sources said.

United, too, is in limbo as talks drag on. By merging with Delta, Northwest would forfeit a contractual term that gives it virtual veto power over a Continental tie-up.

Whenever I have flown to Guam in BF, I have always found it genrally full of US government employees (auditors, etc.) going there at taxpayer expense. For that long a trip, they get to fly BC.

Continental talking merger with American
 

Source: Continental talking merger with American
Delta-Northwest announcement expected next week; Continental-United talks continue


By BILL HENSEL JR. and BRETT CLANTON
Copyright 2008 Houston Chronicle

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Continental Airlines is in talks not only with United Airlines but also with American Airlines, a person familiar with the situation told the Houston Chronicle today.

Meanwhile, talks are moving forward between Delta Air Lines and Northwest Airlines, with a merger announcement expected as soon as next week, another source with knowledge of that situation said. The timing of the announcement was expected to occur when Congress was not in session to minimize legislative backlash.

Such an announcement has been expected to trigger movement on a tie-up between United and Continental, but those carriers are not in the final stages of negotiations as reported, the person familiar with the situations said. Houston-based Continental and Chicago-based United have not even entered a confidentiality agreement, which would signal the carriers were in the late stages of a deal.

A spokeswoman for Continental declined comment today. Representatives for the other three carriers were not immediately available for comment.

Mark Adams, a Continental pilot who is communications chair for the local affiliate of the Air Line Pilots Association, said he thinks it would make sense for American to be interested in a deal.

"I don't think you can discount them," he said.

American's Chief Financial Officer Tom Horton recently said consolidation has the potential to create efficiencies, expand product offerings and benefit the industry and consumers.

"So we continue to assess the situation carefully and in the meantime we'll just keep on managing our business a prudently as we can," he said during a conference call to discuss the company's fourth quarter earnings.

But it is widely thought that American is already too large to win Justice Department approval for a merger.

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Chronicle reporter Brad Hem contributed to this report.

CO + AA?? I think I just threw up a little bit in my mouth...

IAH + EWR to spoke status, DFW becomes a monstrosity, customer service goes straight to..., and a mostly incompatable domestic mainline. Whats not to love about this grand idea???

Methinks this a rumor used to leverage a better deal with UA.

Yea, I thought that we got rid of the MD-80s (although I do like that two-seat side...).

Co + AA.....I just stuck my head in my oven. Anyone want to join me? ;)

AA? Oh please no.:td: Well at least their 737 NG's will fit in.

Plus their 757, 767, 777 aircraft. Other than the M80, AA is more compatible than UA - fleet wise.

Make room for me.

Something seems suspect with this; methinks there is more going on behind the scenes here and that a COAA merger still remains unrealistic.

You really think a merge with UA is any better then with AA? Seems like CO flyer's would loose in both cases.

I just read the AA story in the WSJ and was stunned...I am guessing our friends on Smith Street are covering all bases and implementing a little gamesmanship amongst the potential players. Let's face it - none of the mergers will be easy but I just don't think the legacies have any choice but to merge or acquire.

Exactly. I'm not sure what all the hand-wringing is about. Nobody wants UA. Nobody wants AA. But is the alternative better? The alternative is that CO just ends up as a minnow in a sea of sharks. This isn't about competing with each other, this is about achieving enough scale to fight off the bigger and better-financed foreign carriers in the international markets. Without those international markets, then CO might as well fold up shop, because the domestic market is a losing battle for any legacy carrier. And, frankly, without a merger, CO just doesn't have the fleet, and a handful of 787s arriving in 2010 or later isn't enough.

Incorrect. Us govt. officials are only allowed business class on flights of over 8hours, (might be 9). These people are either not govt. officials or are upgraders.