Continental and United reportedly reach merger agrement

Aviation Airlines
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suntimes.com/business/221805 … 30.article

United Airlines and Continental have an agreement to merge and an announcement is expected Monday, the Wall Street Journal and Crain’s Chicago Business reported Thursday evening citing unnamed sources. But the deal still requires board approval, which is not certain.

United’s board of directors was expected to review the proposed merger deal and vote on it today, and Continental’s board was scheduled to do the same Sunday. United spokeswoman Jean Medina said late Thursday the airline does not comment on rumor.

United Airlines and Continental have an agreement to merge, but the deal still requires board approval, which is not certain.

Two years ago, Continental’s board voted down a similar plan to merge with United. But observers believe the Continental board is more likely to green-light the deal now because its intended merger partner is in much stronger shape – financially and operationally – than it was as recently as two years ago when a sharp economic downtown was starting to wreak havoc on the entire airline industry.

If United and Continental do merge, it could prove a huge boost for Chicago and its status on the world business front. The newly merged carrier would be called United and would become the world’s largest. It would be based in Chicago, where United has in the past several years invested in a significant amount of Loop office space at 77 W. Wacker and in the Willis Tower. United CEO Glenn Tilton, who has for some time been aggressively pushing for more airline consolidation, would become chairman of the new airline and Continental CEO Jeff Smisek would become the new airline’s CEO.

The new airline’s customers in Chicago and around the world would benefit from the creation of an airline route system second to none. Domestically, United’s route strength in the Midwest and West meshes well with Continental’s strong presence in the Northeast and South. Internationally, Continental has strong European and South American routes, while United is a dominant player on trans-Pacific routes and in Asia, which is expected to only grow more important as a business hub in years to come.

It’s unclear just how smoothly labor relations will go as United and Continental start to work out particulars of joining the two carriers’ large and largely unionized work forces. Tilton and his management team have angered many of the carrier’s rank-and-file employees as he has cut pay and implemented new work rules in recent years to turn around United’s fortunes.

But the all-important United pilots union is on board as supporting a United-Continental merger. “I think it’s a step in the right direction,” said one United Boeing 767 captain late Thursday, when he was informed that United and Continental had agreed on the details of a merger deal.

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I’ve posted this in other places, but I’ll post it here as well.

First, company wise.
UAL is on board with this, especially since the surviving company would be United, run by the CEO of COA. That doesn’t mean COA will disappear like NWA or TWA did, but that the new company will be United. How the pilots will handle this (read: seniority) is a good question.

Second, aircraft. in the early 2000s, COA was vehement when they vowed that there will be no Airbus aircraft in their fleet. For all intents and purposes, they will live up to that, if COA does indeed go away. Either way, there will be some MAJOR crosstraining here, as COA pilots would need to get used to flying Airbus aircraft, should they completely integrate. I don’t think they will, because most of their overseas networks won’t overlap. With that in mind, I do not believe UAL’s recent order for A350s will be affected by this, because assuming that COA’s routes remain intact, there wouldn’t be any spare aircraft to replace the B772s UAL has (keep in mind that UAL was the launch customer for the B777, so theirs would be one of the first off the assembly line).

Third, regionals. This will be an absolute mess. SKW. BTA. RAH (with CHQ, and RPA). GLA. ASQ. CJC. ASH. TCF, GJS. LOF. How this will be ironed out is anybody’s guess.

Fourth. Hubs. CLE is now in danger of becoming the new PIT. Obviously, DEN, IAD, JFK, EWR, IAH, ORD, and SFO are all safe here, but unless they ferry all of their regional service through there, CLE will have a hard time staying as a hub/focus city. I would half expect a LCC to eat this up. TRS can take advantage of this by advertising the hell out of CAK, but I don’t see another LCC wanting to start up ops or increase ops there. NKS isn’t that far away at DTW, and SWA is focused on expanding at BOS. USA isn’t going to touch it, especially after their flop at PIT. On the upside, this does gain UAL another hook into Australia, since CMI has a hub at GUM.

Finally, Alliances. Obviously with COA dropping SkyTeam for Star Alliance, this sweetened the deal. CMI obviously follows, being a COA subsidiary. But what of CMP? IIRC, COA still has majority share in the airline, which in turn has a 90% share in RPB (yet another regional). There was talk that CMP was in talks to drop SkyTeam for Star Alliance, and even announced that it would leave SkyTeam the same day COA did. But CMP hasn’t been brought into Star Alliance yet. I can’t see UAL passing up the chance to gain a good footing in South America.

Tomorrow will be a very interesting day, as far as this goes.

BL.

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A few questions that we’re not going to know the answer to anytime soon:

Product
E+?
Ch9?
Intl/PS 2 cabin or 3 cabin?

Fleet
70 seat RJs?
Take A350s?
Retire 747s on same schedule?

Lounge
Free booze?

FFP
Elite tiers?
SWU: # and min fare basis?
CR1?
Lifetime mileage: BIS on metal or EQM?
MM tiers? Companions?
*net blocking?

Network
9 US cities to NRT?
IAH-SBA? :smiley:

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This might take a little time to get used to seeing…

Aircraft will operate under the United Airlines brand but with Continental’s livery and logo.

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:astonished: :angry: :unamused:

http://content.united.com/ual/asset/interstit_u2_coldplay_575x526.jpg

Awful. At least keep the titles in all caps. And probably keep the United font.

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Does this mean I will get to see my beloved EMB 170 in Continental colors… Errrr… I mean the new United livery???

:mrgreen:

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unitedcontinentalmerger.com/

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:angry: :angry: :angry: :angry:

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I have been seeing the 787 all morning thinking it was nothing more than a shot from that airliners.net spinoff where they photoshop schemes onto aircraft. Then I see the logo at the top! That just doesn’t look right. Weird. I wish AA would’ve used this mentality in the mAAsacre of TW, and at least allowed that masterpeice (but only if they kept the name as well) gold red and blue to live on!
At any rate, It seems like it’d be alot less expensive to keep the UA colors as is. You’ve got print material that will all need to change, plus the UA fleet which has recently been updated…I dunno I’m an outsider, and an armchair CEO talking here so I obviously don’t have the info nor the power so I’m probably not getting the proper info.
Personal feeling though, just let the CO livery die honorably…this looks like some simulator virtual airline junk!

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I thought about that this morning. Out of all of these, Ch. 9 concerns me the most. I seriously hope they keep it. That has been a staple in UAL’s service, and one of the reasons why I like to fly with them.

Fleet
70 seat RJs?
Take A350s?
Retire 747s on same schedule?

The RJs are definitely a problem. Which to use? ERJ145s from BTA, E120s and CRJs from SKW… S34s from CJC… E170s from RPA… up in the air on that.

I would say that the B744s will remain on schedule to be retired, along with the B772s UAL has. Like I mentioned before, UAL has the oldest ones out of that model. Both ordered the B787-8, and COA is the launch customer for the B787-9 COAs are going to come in first, so depending on which part of whose fleet will be phased out first, those are going there. The A350s are going to replace the B744s, so I don’t see that changing soon.

Lounge
Free booze?

Good question there. Another thing to think about: Slots. and gates. Do all airlines belonging to some alliance get access to their respective lounges? For example… could LOT, by being a member of Star Alliance get access to ANZ’s lounge?

FFP
Elite tiers?
SWU: # and min fare basis?
CR1?
Lifetime mileage: BIS on metal or EQM?
MM tiers? Companions?

Good question here.

Network
9 US cities to NRT?
IAH-SBA? :smiley:

See the above for slots/gates. However… seeing how DAL just gained a bigger foothold at RJAA from the NWA merger, I could see this happening.

IAH-SBA? Don’t see why not. BTA did it, even though it was when they went out on their own, so their fleet would have the range. If the E145 could do a SMF-OKC run, IAH-SBA shouldn’t be hard. :slight_smile:

BL.

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Yes, Star Alliance gold elites on intl flights and biz/first customers can go to almost any *A lounge. In SFO I usually go to the Singapore Kris Lounge (when it’s open), in IAD the Club ANA, etc.

ExPlus (CRJ7/E170) or bust. I’d take the connection to avoid a CRJ2/E14x.
When did BTA do IAH-SBA? They had SAN-SBA-SMF for a while but not IAH.

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They used to have an IAH-BFL on the E145. Almost 4 hours…ugh.

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Looks like United’s retirement of the Boeing 737 a few months ago was a bit premature.

And as far as the paint scheme goes, don’t hold your breath on that, there’s still a lot of their fleet in the old gray and dark blue '90’s livery that hasn’t been painted yet, so we’ll still get to see the blue stripes on white for quite sometime.

Joe

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I haven’t flown United or Continental for over a decade… for a reason.

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Yes, the reason is that neither of them fly to Yakima.

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I was thinking the same thing.

The last COA flight I was on was PHX → EWR back in 2008. They fed us, even in coach. Did they kill off that little benefit over the past couple years? And if not, is UAL going to start feeding the masses on flights over 4 or 5 hours?

Joe

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I was looking at Priceline,and under the Continential name it says “operated by United Airlines”.

Doug

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That’s a codeshare.

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I got a question:

United’s 777 are [2-5-2] format while those of Continental are [3-3-3]. Keep both formats or reconfigure the 777 fleet?

Ok, more like two questions…

It’s all but official that the Cleveland hub will be pulled, due to Chicago’s close proximity. How about Washington Dulles vs Newark Liberty? Which of those two East-coast airports is going to give way and which will prevail?

Make that three questions. lol

With United’s hub in Los Angeles, why has there been the need for another California hub in San Francisco? Are they planning to consolidate in the west coast? What will happen to Guam and Tokyo?

So now we have eight different cities flying direct to London. Beijing and Tokyo are served by LAX, SFO, ORD, EWR, and IAD. Some of those routes may have to give?

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Don’t know how they could have said that when their fleet in the 1980’s and early 1990’s contain a fairly good sized fleet of A300’s.