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United/Continental deep in talks

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United/Continental deep in talks

Old 02-14-2008, 02:00 PM
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Default United/Continental deep in talks

http://biz.yahoo.com/ap/080214/united_continental.html

AP
United, Continental Deep in Deal Talks
Thursday February 14, 5:23 pm ET
By David Koenig, AP Business Writer
United, Continental Said to Be Deep Into Deal Talks

DALLAS (AP) -- United Airlines and Continental are in advanced negotiations and could complete a combination quickly if Delta and Northwest strike a deal, according to a person familiar with the negotiations.

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However, there are still significant issues yet to resolve, according to the person, who was not authorized by the companies to talk about the deal.

United spokeswoman Jean Medina and Continental Airlines Inc. spokesman Dave Messing declined to comment.

Delta Air Lines Inc. and Northwest Airlines Corp. have been intently discussing a deal for several weeks, according to people familiar with the situation. But issues such as combining work forces remain obstacles.

The prospects for a deal seemed to improve Thursday, when Air France-KLM, the world's largest airline by revenue, said it was considering investing in a Delta-Northwest combination.

Such a deal is expected to trigger more consolidation in the highly competitive airline industry, as rivals try to match or eclipse Delta-Northwest, which would become the world's largest airline.

United, owned by UAL Corp., and Continental must wait for the Delta-Northwest talks to run their course because Northwest can block any deal involving Continental. That veto power is the vestige of Northwest's one-time stake in Continental.

The Chicago Tribune reported that United hasn't ruled out bidding for Delta if Delta can't close the deal with Northwest. That would give Chicago-based United the ability to play Northwest and Houston-based Continental off each other in a search for the best possible deal.

The Tribune reported that Continental Chief Executive Lawrence Kellner would run the combined company and that its headquarters location would be settled later.

Analysts say United's strength across the Pacific would complement Northwest's routes to Europe and Latin American and its hub in the New York area, where United is weak.

United, the second-largest U.S. airline behind American, and No. 4 Continental have previously talked about combining but failed to strike an agreement.

Airlines want to offer large global route networks to attractive lucrative corporate travel business. Kellner said last month that Continental was comfortable staying independent but wouldn't hesitate to act if others bulked up through combinations.

Many analysts see consolidation as inevitable, as U.S. carriers struggle with high fuel costs and too little ability to raise fares. But airline combinations are often messy affairs plagued by bad labor relations.

Mike Boyd, a consultant who has advised carriers and airline labor unions, said United was more interested in being part of a bigger company rather than running its own airline. He said there was no imperative for others to match a Delta-Northwest deal.

"This is the airline industry, not the junior prom," he said. "Everybody doesn't need a date."

Business Writer Dave Carpenter in Chicago contributed to this report.
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Old 02-14-2008, 02:04 PM
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Any idea which name the combined UA+CO would take?

I'd assume United, it seems they have greater brand recognition, especially over in Asia.
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Old 02-14-2008, 03:02 PM
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Originally Posted by chitownpilot View Post
Any idea which name the combined UA+CO would take?

I'd assume United, it seems they have greater brand recognition, especially over in Asia.
I think brand is just where you're located. I'm from Houston and all I see is CAL. CAL seems to be in financial better shape so I'd see them running the show.
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Old 02-14-2008, 03:10 PM
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Originally Posted by chitownpilot View Post
Any idea which name the combined UA+CO would take?

I'd assume United, it seems they have greater brand recognition, especially over in Asia.
I paxed from Guam to Saipan to Manilla which is pretty close to Asia on my map-all on a CAL 737 operated by CAL. My guess is recognition is about the same over there.

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Old 02-14-2008, 05:02 PM
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They will take the name "Continental" from Continental Airlines and the name "Airlines" from United Airlines and combine them.
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Old 02-14-2008, 05:04 PM
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NWA can block any purchase of Continental, but Continental can buy anyone.
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Old 02-14-2008, 06:15 PM
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Northwest gives up their golden share when they change ownership. Will Continental bleed United's assets the way they did Eastern??
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Old 02-14-2008, 06:56 PM
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Default My understanding is that management has agreed

to take elements of the names from each company and put that together as a sort of "gift" to the employee groups if you will. Sources tell me that they have selected "Con" from Continental and "U" from United to form the new mega carrier "ConU"
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Old 02-14-2008, 07:01 PM
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Default Ua+co

Tedinental
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Old 02-14-2008, 07:12 PM
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Continented or Contunited

Last edited by HercAC; 02-14-2008 at 08:03 PM.
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