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UA-CO merger collapses; CO hints at leaving Skyteam for BA/AA alliance

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  • UA-CO merger collapses; CO hints at leaving Skyteam for BA/AA alliance

    http://www.nytimes.com/2008/04/28/bu...526&ei=5087%0A

    Continental Airlines said Sunday that it had abandoned merger talks with United Airlines and was planning to remain an independent carrier, a blow to lengthy efforts by United to find a merger partner.

    ...

    Continental decided to drop the discussions after UAL announced worse-than-expected earnings, which sent shares falling last week. On Tuesday, United said it lost $537 million during the first quarter, on sharply higher costs for jet fuel. The airline, which spent more than three years under bankruptcy protection earlier this decade, said it would cut flights and eliminate a further 1,000 jobs.

    Directors at Continental, who met Sunday afternoon, feared that a merger with United could put their company in peril.

    ...

    With the United-Continental deal scrapped, a new set of pairings is likely to take place. UAL is expected to push to reach a deal with US Airways, with which it had also been discussing a merger, people involved in the talks said.

    ...

    Meanwhile, Continental is expected to press ahead with preliminary talks to create a three-way alliance — short of a full merger — with American Airlines and British Airways.

    ...

    Meanwhile, Continental’s next steps are far from clear. Although it planned to pursue discussions with American about joining its alliance with British Airways, the corporate cultures of Continental and American differ significantly. American, as the nation’s biggest airline until the Delta-Northwest deal is completed, is likely to want to dictate the terms under which the much-smaller Continental comes on board.

    ...
    CO-AA - yes please!

    On a more serious note - there's massive overlap with an AA/CO alliance - namely the NYC and Texan markets. But I guess an alliance rather than merger is easier to get past the competition regulators?
    All opinions shared are my own, and are not necessarily those of my employer or any other organisation of which I'm affiliated to.

  • #2
    I fly mostly CO , since i live 15 minutes from EWR, and have mixed feelings about this possible alliance. If im near ORD,SFO , or LAX it UA to earn SQ miles.
    The only positive for me would be to earn and redeem miles on AA to EZE from JFK to avoid connection in IAH, or QF redemption if CO somehow joins OW.
    Im not a AA or BA hater , i just never really fly them.

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    • #3
      An AA/CO merger = lots of layoffs.

      I think VX should buy them all and return the US carriers to better products/services.
      HUGE AL

      Comment


      • #4
        Oooh...

        http://www.dallasnews.com/sharedcont....b53568de.html

        American Airlines Inc. is talking about a partnership with Continental Airlines Inc. and British Airways PLC, American and British Airways said Wednesday.

        The talks don’t involve any plans for a merger, but possible ties on frequent-flier programs, code-sharing and possibly a renewed attempt to get antitrust immunity for American’s and British Airways’ existing trans-Atlantic alliance.

        The airlines gave little detail of what is being discussed.

        “British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines,” British Airways said in a terse announcement. “Further details will be announced when appropriate.”

        American spokesman Charley Wilson confirmed that the Fort Worth-based carrier has been having conversations with British Airways, its partner in the Oneworld global alliance, and Houston-based Continental.

        ...
        Also carried in various other news sources.
        All opinions shared are my own, and are not necessarily those of my employer or any other organisation of which I'm affiliated to.

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        • #5
          How much will VS , and Branson fight this thing
          dont forget CO tried to prevent Virgin America to ever fly in the US.

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          • #6
            This is big for CO who will otherwise be somewhat dwarfed in a world of mega carriers, mega alliances & revenue sharing. Currently, United & Lufthansa are to enter greater co-operations including revenue sharing I beleive, as well as the big 4 Skyteam players Delta/Northwest/Air France/KLM who were given approval to cooperate fully a week or so before the merger announcement. BA/AA have always wanted to get in & are heavily dominant in the TATL market, parrticularly from London, although in recent years, after Delta's expansion into overseas territory, BA has lost it's largest TATL airline status.

            I fail to see what AA gets out of it. BA gets more hubs to feed traffic & a potentially huge frequent flier base to IAH which is a very high performer in the system. On a side note, non-Londoners will be able to fly to EWR given CO's large regional UK presence.

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