Post by flyjoe180 on Dec 14, 2006 9:13:36 GMT 12
This would be the biggest merger in a long time if it goes ahead. This from the Daily Telegraph.
www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/13/bcnunited13.xml
Mergers in the air
By David Litterick in New York
Last Updated: 6:39pm GMT 13/12/2006
The pace of consolidation in the US airline industry stepped up yesterday after it emerged that United Airlines and Continental Airlines are in merger talks.
News of the discussions came as discount carrier AirTran had launched its own hostile bid for MidWest Air, the Wall Street Journal reported.
Both possible deals follow US Airways's hostile $8.7bn (£4.4bn) offer for Delta Air Lines last month, which has sparked a frenzy of merger speculation in the struggling industry. In Europe too, airlines are considering possible mergers.
A United-Continental merger would unite the second and fourth largest US airlines, creating a carrier that would eclipse American Airlines as the world's largest as measured by passenger traffic.
Glenn Tilton, chief executive of United parent UAL, has been seaking a merger since February 2005, and hired Goldman Sachs this year for advice on possible deals. Continental chief Lawrence Kellner has said he would consider a merger if it kept the airline competitive.
Alan Sbarra of San Francisco-based Roach & Sbarra Consulting said: "We don't need six legacy network carriers in this country. We're going to consolidate possibly down to three or four."
United's hub airports in Chicago, San Francisco and Washington would mesh with Continental's hubs in Houston, Cleveland and Newark, New Jersey. The combination also would combine Continental's strength in Latin America with United's Asia-Pacific routes and access to Heathrow.
One possible complication in the United-Continental talks may be the golden share acquired by Northwest Airlines in 2001. In settling a dispute over an alliance letting the two carriers sell seats on each other's planes, Northwest got the power, in some instances, to block a merger between Continental and another airline.
The United-Continental talks and US Airways' offer for bankrupt Delta may force American and Northwest to consider a tie-up, too, said David Swierenga, president of Aero-Econ and a former chief economist of the Air Transport Association.
He said: "Nobody wants to be left sitting on the sidelines in this." Acquiring Northwest, which like Delta is in bankruptcy, would expand American's reach in Asia, Swierenga said.
The industry, which has lost a collective $40bn since the September 11 terrorist attacks, is only now beginning to return to profitability.
www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/13/bcnunited13.xml
Mergers in the air
By David Litterick in New York
Last Updated: 6:39pm GMT 13/12/2006
The pace of consolidation in the US airline industry stepped up yesterday after it emerged that United Airlines and Continental Airlines are in merger talks.
News of the discussions came as discount carrier AirTran had launched its own hostile bid for MidWest Air, the Wall Street Journal reported.
Both possible deals follow US Airways's hostile $8.7bn (£4.4bn) offer for Delta Air Lines last month, which has sparked a frenzy of merger speculation in the struggling industry. In Europe too, airlines are considering possible mergers.
A United-Continental merger would unite the second and fourth largest US airlines, creating a carrier that would eclipse American Airlines as the world's largest as measured by passenger traffic.
Glenn Tilton, chief executive of United parent UAL, has been seaking a merger since February 2005, and hired Goldman Sachs this year for advice on possible deals. Continental chief Lawrence Kellner has said he would consider a merger if it kept the airline competitive.
Alan Sbarra of San Francisco-based Roach & Sbarra Consulting said: "We don't need six legacy network carriers in this country. We're going to consolidate possibly down to three or four."
United's hub airports in Chicago, San Francisco and Washington would mesh with Continental's hubs in Houston, Cleveland and Newark, New Jersey. The combination also would combine Continental's strength in Latin America with United's Asia-Pacific routes and access to Heathrow.
One possible complication in the United-Continental talks may be the golden share acquired by Northwest Airlines in 2001. In settling a dispute over an alliance letting the two carriers sell seats on each other's planes, Northwest got the power, in some instances, to block a merger between Continental and another airline.
The United-Continental talks and US Airways' offer for bankrupt Delta may force American and Northwest to consider a tie-up, too, said David Swierenga, president of Aero-Econ and a former chief economist of the Air Transport Association.
He said: "Nobody wants to be left sitting on the sidelines in this." Acquiring Northwest, which like Delta is in bankruptcy, would expand American's reach in Asia, Swierenga said.
The industry, which has lost a collective $40bn since the September 11 terrorist attacks, is only now beginning to return to profitability.