Continental held merger talks with American

[Hatu]

Continental Airlines (NYSE:CAL) has held merger discussion with AMR (NYSE:AMR) , parent of American Airlines, in addition to its previously reported talks with United Airlines.

People familiar with the matter described Continental's talks with AMR as preliminary and said the airline was not close to an agreement with United.

Continental and AMR both declined to comment.

http://us.ft.com/ftgateway/superpage.ft?ne...id=yahoofinance

 

[FA Mikey]

Interesting, but what does one offer the other?

 

[FWAAA]

A combination of CO and AA would give the combined airline four daily China frequencies, CO's HKG rights plus fairly good NRT strength.

It would strengthen the stranglehold on Central America and Texas, where both are already strong. That overlap would permit some rationalization (maybe resulting in higher fares).

Oh, that and a fairly strong presence in NYC, no matter which side of the Hudson you prefer.

I dunno if AA should pursue CO, but it wouldn't be the worst acquisition.

If UA combines with CO, it might have to divest some China frequencies due to its already-dominant position. Same for some Japan slots. It would give UA a strong Texas beachhead.

 

[eolesen]

Serious expansion potential?...

Whittle away some of the duplicity between JFK/EWR and DFW/IAH, and you'd wind up with a carrier that owns the NYC market, the Texas market, and a lot of Boeings....

But I don't see it happening.

 

[flyastrojets]

I don't see this one happening. But I'm not surprised that AA is looking at every option.

 

[whino]

CO's best quality is not necessarily their routes. They are the only other major besides AMR to not have undergone a recent bankruptcy. They are the strongest financially and would present comparably good payscales with upside potential.

 

[nbmcg01]

CO's best quality is not necessarily their routes. They are the only other major besides AMR to not have undergone a recent bankruptcy. They are the strongest financially and would present comparably good payscales with upside potential.

There is nothing written in stone that says the surviving company has to take the employees. I was very surprised when AA agreed (in front of Congress) to fair and equitable treatment for the former TWA employees. The only union employees not "taken" were former AA employees who left under less than "good" circumstances or failed to give notice. It is funny how the terminated move from Company to Company. Our former employees that were terminated and now flying for AA had the last laugh I suppose..they are senior to their former "peers". Ah, the irony.

As for seniority merger, not to worry, the IAM represents them and we ALL know how well they negotiated our integration..lol The new law only speaks to fair and equitable (now where have I heard that phrase before?) not DOH.

 

[Hopeful]

There is nothing written in stone that says the surviving company has to take the employees. I was very surprised when AA agreed (in front of Congress) to fair and equitable treatment for the former TWA employees. The only union employees not "taken" were former AA employees who left under less than "good" circumstances or failed to give notice. It is funny how the terminated move from Company to Company. Our former employees that were terminated and now flying for AA had the last laugh I suppose..they are senior to their former "peers". Ah, the irony.

As for seniority merger, not to worry, the IAM represents them and we ALL know how well they negotiated our integration..lol The new law only speaks to fair and equitable (now where have I heard that phrase before?) not DOH.

I believe Continental's mechanics are represented by IBT teamsters.

 

[1AA]

I believe Continental's mechanics are represented by IBT teamsters.

Yea and the Teamsters have officially stated that they are not interested in representing AA AMT's.
If this dream merger should happen (Long Shot) what position will the teamsters take then?
Too many variables and too many questions to be asked and answered. That is why this merger will more than likely not happen. Labor again will be a big issue.

 

[Bob Owens]

Yea and the Teamsters have officially stated that they are not interested in representing AA AMT's.
If this dream merger should happen (Long Shot) what position will the teamsters take then?
Too many variables and too many questions to be asked and answered. That is why this merger will more than likely not happen. Labor again will be a big issue.

I dont think that Labor, in as far as merging the workforces is an issue. The government and the banks that own the airlines and make a lot of money off the airlines like things the way they are. Lots of airlines competing with the employees in a race to the bottom. As long as the planes fly "they" make money.

Consolidation gives workers an advantage at the bargaining table, the larger the group of workers the harder it is to replace them. With mechanics, pilots and other workers with specialized skills where the "pool" is even smaller this becomes even more of a factor. The government, which probably makes more money off airline operations than any other entity will block consolidation because our paycuts makes it easier for them to increase their share by charging rediculous rates for departure taxes, fuel taxes, landing fees, rents etc. Either that or they will put in legislation that inhibits us from gaining back our losses after consolidation occurs by reviving bills such as McCains s-1327.

As workers we have to examine the value of our labor and not tie it into the ability of the airline to make money, after all it doesnt really matter. Arpey and his ilk dont care what the airline loses when they get their bonuses, why should we? Whether there are a lot of airlines or a few airlines, the industry could "lose" billions every year and planes would still be flying. As long as we show up "they" make money. That is the key for us. We have to build unions where we can be portable and move from company to company without penalty, that can be done by having no progressions, and very high shift and weekend premiums so that the basic Monday to friday day shifts not neccisarily the most desired shift. As nmbgc01 brought up, the same people keep showing up at different airlines, the only thing is every time they move they pay a severe financial penalty and the only ones who benifit from that are the airlines.

 

[Skymess]

I dont think that Labor, in as far as merging the workforces is an issue. The government and the banks that own the airlines and make a lot of money off the airlines like things the way they are. Lots of airlines competing with the employees in a race to the bottom. As long as the planes fly "they" make money.

Consolidation gives workers an advantage at the bargaining table, the larger the group of workers the harder it is to replace them. With mechanics, pilots and other workers with specialized skills where the "pool" is even smaller this becomes even more of a factor. The government, which probably makes more money off airline operations than any other entity will block consolidation because our paycuts makes it easier for them to increase their share by charging rediculous rates for departure taxes, fuel taxes, landing fees, rents etc. Either that or they will put in legislation that inhibits us from gaining back our losses after consolidation occurs by reviving bills such as McCains s-1327.

As workers we have to examine the value of our labor and not tie it into the ability of the airline to make money, after all it doesnt really matter. Arpey and his ilk dont care what the airline loses when they get their bonuses, why should we? Whether there are a lot of airlines or a few airlines, the industry could "lose" billions every year and planes would still be flying. As long as we show up "they" make money. That is the key for us. We have to build unions where we can be portable and move from company to company without penalty, that can be done by having no progressions, and very high shift and weekend premiums so that the basic Monday to friday day shifts not neccisarily the most desired shift. As nmbgc01 brought up, the same people keep showing up at different airlines, the only thing is every time they move they pay a severe financial penalty and the only ones who benifit from that are the airlines.

Unfortunately, I feel the power of labor is dead in this country. It was on a downward spiral before 2003 but all of our unions accepting that garbage they threw our way was the nail in the coffin. We're fighting an uphill battle. We have no leverage to demand anything at this juncture. It's just going to be a shell game of what we can move from this side of the pie to the other. What's worth more to you sick time accrual or hourly pay? Those being only an example.

Unlike you, I don't believe consolidation will give us any power. I think consolidations will cause labor overages. When there are a million people out there wating for a chance to do your job, and who are qualified to do your job, your power diminishes. Just ask the NWA mechanics who were replaced by the scabs who were then unionized by the same union that took them out on strike.

Then there are the people fooling themselves that a democrat in office is going to be supportive of labor injustices. Just ask the AA pilots how willing Bill Clinton was to let them strike.

I don't know what the answer is other than sticking together with your own airline employees from each work group. I'm not sure lobbying with other unions from different airlines is such a great help. Look how well the APFA did by sticking with that garbage union AFA. We got that nice little piece of junk seniority integration legislation included in the aviation omnibus bill. Why'd AFA want it? Because they wanted to make sure that any future mergers would be 'fair and equitable' to the dozens of airlines they have under their umbrella and, most importantly, they wanted to ensure they kept getting their union dues from those airlines should a merger or acquisition occur.

 

[NewHampshire Black Bears]

We ALL might be pleasantly(labor) surprised, if Barack gets in !!

 

[Connected1]

If CO is serious about talking with UA, then they'll need a reasonable negotiating chip in order to get the best financial deal. I'm not surprised that they would be shopping themselves around. With DL and NW heading towards a tie-up very soon, I'm not surprised that they would have approached American. They really don't have many options.

 

[Hopeful]

NH/BB's, how are you buddy?

I think airline merger mania will get fast tracked this year because of the state of some airlines and the industry itself. If many seats are removed from the market, load factors rise, but fuel costs must be absorbed into the price of a ticket.

I do agree with Skymess about the labor overage following the mass consolidation. I know for a fact that Delta, especially at JFK, cannot hire experienced mechanics for what they are paying. They have resorted to hiring right of out the aviation schools. This, coupled with the fact that enrollment in these schools has declined year over year is forcing the airlines to scramble for qualified mechanics. Any mechanic who has been laid off for a few years or more hopefully has found employment elsewhere and has found it outside the airline industry.
American Airlines will be facing this issue over the next few months. Right now they are in the process of recalling the ex TWA mechanics who were laid off in 2001. Once the recall list is exhausted, AA will have
to hire off the street and face the same problems.

Let the mergers begin!

 

[Vortilon]

We ALL might be pleasantly(labor) surprised, if Barack gets in !!

You're kidding.... right?