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Media reports that CO and UA Merger is Imminent - Announcement Likely by 5/3/10

 

Old Sep 11, 08, 2:53 pm
  #1  
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Media reports that CO and UA Merger is Imminent - Announcement Likely by 5/3/10

It is nothing less than surprising how a little orange bracelet will get people to talk... Here's what I heard from a 17-year veteran of the "Friendly Skies" on a flight yesterday from the City-that-never-sleeps to the City-that-never-rests. Please bear in mind that this is reported opinion and construction from someone who is closer to the firing line than I am. I makes good copy, though, and I find it if not believable than at least interesting:

The FA said that a major reason the Continental deal fell through was that a certain CEO had made it a condition that he'd stay on in that capacity with the merged company at least for awhile. That was not the only obstacle but presumeably a big one. However, so the grapevine has it, what he came away with from the table was the suggestion that if things came to pass in the near future that would make UA more, well, mergeable then a successful merger could result in a lovely parting gift upward of 99 million smackeroos.

So far, so good. Now any and all of the following "instances" can probably be argued to have merit on their own and be good and useful just as that. It is just that they all move business operations of UA closer to the CO model. To wit: Ted is dead and the AC will be configured to F/Y seating. Now, there are other reasons why that is happening. Let's just say that is could be "convenient" as well. Continental is coming over to teach UA about BF services. "Convenient" as well. There are increasingly fewer middle manager around at a noticeable pace. Certainly a leaner company might benefit itself but as middle management is a prime area for bloodletting in a merger, it is convenient to have fewer of them to begin with. After years of not having it, suddenly UA sees the light and institutes the "enrolled friend" benefit. Lastly, and this is my favorite one, the cabin safety demonstration is being altered. Since seemingly the beginning of flight, UA's demonstration has started with the seatbelt and buckle. It will now begin with the exit doors. As does another airline mentioned often together with UA.

So, what does this mean? Maybe nothing. However, if the question of a UA/CO merger should ever come up again, it will be conveniently just that much easier to achieve.

Remember: Just because you are paranoid does not mean no one is out to get you!
MadBiff is offline  
Old Sep 11, 08, 3:07 pm
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You forgot the elimination of 125% bonus for CO Platinum and 50% bonus for Silver.

Also, CO Platinum will most likely go up to 100,000 EQM in 2009, if not, then 2010.

And, I predict, UA will up it's int'l business award to 120,000, matching that of CO.
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Old Sep 11, 08, 3:35 pm
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Welcome to FT. From some things you commented on you have obviously been reading some here already. Over time you will see all kinds of things posted that are rumors from flight attendants or pilots and you really shouldn't believe any of them because what you heard is much more likely conjecture and speculation passed off as fact from one Tilton hating FA to another until it made its way down to you. The FA's on your flight have absolutely no access to information such as a potential big payoff to the CEO in the event of a merger. If an FA tells you that there will be some specific change to onboard meals in the near future, I would be more likely to believe them. But anything having to do with high level corporate information might be fun conversation but likely has no basis in reality.
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Old Sep 11, 08, 3:36 pm
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Originally Posted by BlissWorld View Post
And, I predict, UA will up it's int'l business award to 120,000, matching that of CO.
I agree with this prediction. International C saver awards tend to be so rarely available compared to other classes that it's easy to imagine UA thinking it could get away with increasing the mileage required.
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Old Sep 11, 08, 3:55 pm
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Originally Posted by MadBiff View Post
The FA said that a major reason the Continental deal fell through was that a certain CEO had made it a condition that he'd stay on in that capacity with the merged company at least for awhile. That was not the only obstacle but presumeably a big one.

However, so the grapevine has it, what he came away with from the table was the suggestion that if things came to pass in the near future that would make UA more, well, mergeable then a successful merger could result in a lovely parting gift upward of 99 million smackeroos.
Merger with CO.... Very unlikely, ***UNLESS**** post DL/NW merger, another Major USA based carrier goes under.

Furthermore, regarding the 2nd half of your statement... a certain CEO would get a major "walk-away" payday if a merger is consumated (between 30-70 "smackaroos"). Basically, he would be quite happy to walk away.
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Old Sep 11, 08, 4:06 pm
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Originally Posted by jhayes_1780 View Post
Merger with CO.... Very unlikely, ***UNLESS**** post DL/NW merger, another Major USA based carrier goes under.
Um, I don't think so, if that happened I'd seriously doubt any UA/CO merger would pass regulatory approval.
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Old Sep 11, 08, 4:32 pm
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I think the 99 million figure indicates how much credibility this rumor has.
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Old Sep 11, 08, 6:08 pm
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The "alignment" of the safety demonstration is making the merger easier?
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Old Sep 11, 08, 6:10 pm
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Originally Posted by ryan182 View Post
if that happened I'd seriously doubt any UA/CO merger would pass regulatory approval.
I think just the opposite. Of course, with a new Congress and a new administration, we won't know anything for a while...
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Old Sep 11, 08, 6:42 pm
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As far as I recall, there is no merger between UA and CO. A merger is a big, big deal. Lots of paperwork, lawyers, etc. Two companies become one. Delta and Northwest are trying to merge, and when complete, NW will no longer exist. All will be Delta.

UA and CO, when the formal merger talks fell through a few months ago, are working on a lesser goal, a closer alliance or partnership between the two companies. What this means in practice, I am not sure anyone knows. But UA and CO will remain two separate companies, i.e. no merger.
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Old Sep 11, 08, 6:59 pm
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I don't see how any of this makes any sense. There are certainly opportunistic alignments that are taking place since CO is joining *A. Needless to say these alignments will all be typical "enhancements" in a race to the bottom.

But frankly it sounds a bit naive to deduct from these alignments that a merger is being considered. I think there's a couple of hmmmm, let's say more important things to consider in a merger than the wording of the safety demo... I'm sure rewards programs are discussed in a merger, but the fundamentals are probably more at stake than tiny details such as the ones described here.
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Old Sep 11, 08, 9:53 pm
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Interesting, sure. But IMHO, this information is worth what you paid for it.
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Old Sep 11, 08, 10:17 pm
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Originally Posted by wilp888 View Post
I think the 99 million figure indicates how much credibility this rumor has.
When you read that, did anyone else have a vision of Tilton doing the Dr. Evil pinky move saying "Ninety-nine million dollars!".


But seriously, I think it's safe to say the merger is dead. There's a lot of headaches involved with a merger and not one single airline merger has gone well in far as I can remember.

Just imagining the attempted merging of the two cultures gives me the chills. The corporate culture of the two are drastically different and would require a lot of growing pains, which no one can really afford in today's environment. The NW/DL merger is going to be bad for a while and anyone who says it won't hasn't paid attention to US/HP and AA/TW as two recent examples.
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Old Sep 11, 08, 10:39 pm
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Did you all fail to notice the OP has only 1 post and hasn't returned since starting this 'discussion'?
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Old Sep 11, 08, 10:42 pm
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Originally Posted by dsquared37 View Post
Did you all fail to notice the OP has only 1 post and hasn't returned since starting this 'discussion'?
Seems to be a lot of that going around here lately...
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