UA-CO Merger Rumors Now Surfacing on Wall Street

[JAMAKE1]

Read all about it here:

http://www.marketwatch.com/News/Story/Stor...o&dist=yhoo

 

[UnitedChicago]

Very interesting. Anything imminent?

Here's a link to the Business Week article http://www.businessweek.com/magazine/conte...htm?chan=search

So "Continental hasn't given up..." is interesting and leads one to believe Continental is chasing United?

 

[Fly]

'Inside Wall Street' notes fresh UAL-Continental deal rumors


WASHINGTON (MarketWatch) -- Business Week says there's renewed market buzz going around that UAL Corp. might make for a good merger, particularly from the strategic standpoint of international travel. UAL, having gone public after emerging from Chapter 11 last winter, is the parent of No. 2 U.S. carrier United Airlines. United's strong on overseas routes serving Asia, while Continental's international service is geared toward Europe destinations. A combined UAL-Continental would have revenue of about $30 billion, or some 50% higher than AMR Corp. (AMR : AMR Corporation, parent of market leader American Airlines, according to the report in Business Week's "Inside Wall Street" column. Business Week said neither UAL nor Continental would comment on merger rumors.

INSIDE WALL STREET

United And Continental?

After coming out of bankruptcy on Feb. 1 much leaner, United Airlines' parent, UAL (UAUA ), is drawing fresh attention for its turnaround efforts. There's also buzz of a merger with Continental Airlines (CAL ). The two have talked in the past, and some pros think the effort will be rekindled. One money manager who owns UAL shares, has close ties with executives, and asked not to be named, says Continental has not given up. "The strategic fit [would] be great," he argues. A merger would make UAL-Continental tops in the U.S. In passenger revenues, UAL is second only to AMR (AMR ), parent of American Airlines. Combined, UAL and Continental, now No. 5, would have sales of $30 billion, vs. AMR's $20.7 billion. Since March, UAL stock has fallen from 43 to 23.83. Helane Becker of investment firm Benchmark, who rates UAL a "buy," says the rumored merger is "entirely possible." Apart from the fit, she says, a merger would remove "overlapping capacity" from the system. Since Chapter 11, UAL's labor costs are competitive with those of low-cost airlines, notes Becker. She has a 12-month price target of 43, based on eight times her estimated 2007 profit estimate of $5.32 a share. For 2006, she expects a loss of 25 cents. Roger King of CreditSights.com notes in a report that UAL is strong in Asia, while Continental is strong in the Atlantic. That suggests that a merger would strategically benefit both. UAL and Continental both declined comment on merger rumors.

UA/CAL


This rumor has been circulating on the line for quite a while. With the recent drop of international flying out of JFK coming in October, this possibility is sounding more like a potential reality.

 

[LGA Fleet Service]

I declare this "Interesting Corporate Transaction" thread invalid until a certain Airbus pilot gives it the 'Project Minnow' seal of approval.

 

[coolflyingfool]

I think that CO would be better off going it alone until UA has been out of BK for a while longer and proves that the ship is running in the right direction. If the boat goes straight, then CO and UA can get together. just my thoughts.......

 

[Fly]

Hasn't Gordo publicly stated that he'd like to run the UA/CAL combo platter? I believe that if there is a merger, CAL will be running this company.

 

[UnitedChicago]

Hasn't Gordo publicly stated that he'd like to run the UA/CAL combo platter? I believe that if there is a merger, CAL will be running this company.

I'd welcome CAL management to run the combined company...you all know my lack of affection for Tilton and crew.

However, of course I'd like the combined company airline to be United with HQ in Chicago.

 

[NewHampshire Black Bears]

I'd welcome CAL management to run the combined company...you all know my lack of affection for Tilton and crew.

However, of course I'd like the combined company airline to be United with HQ in Chicago.

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Ala US/HP, that VERY well could happen.

The pilots would wind up ALPA(not sure what CO pilots are)?

F/A's would be AFA.

FSC's and Agents would be IAM

AMT's would be AMFA

Mega hubs...EWR/ORD/SFO
Large FOCUS cities...IAD/IAH/DEN !

It WOULD work, and work quite well, I think.

If it happened, it would FORCE DL, to "go it alone", because AA would be "in the sack"(in a NY minute), with NW!

"VETTY INTA..ESTIN"G" !!!!!!!!!!!!!!!!!!

NH/BB's

 

[WorldTraveler]

You knew I would show up to throw a little cold water on things so here goes:

You do realize that CO and UA were at the bottom end of the scale of operating margins by network carriers during the last quarter, don't you? It's hard to convince investors to loan you billions of dollars knowing that you will surely incur losses during the process of combining the companies when your peers are running their airlines better than you are.

At least Doug Parker has managed to generate top tier financial results, even if he has a bunch of disenfranchised employees and he's sacrificing US' long term viability for short term results.

 

[Fly]

You do realize that US was days from ch 7 too? Now look at them.

Your visions of Delta grandeur would be thrown out the door with a merger like this. Imagine how strong this combo would be!! Amazing route structure with these two together. I guess Delta would be the first airline fatality of the majors then. Is that why you are freaking out?

 

[UnitedChicago]

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Ala US/HP, that VERY well could happen.

The pilots would wind up ALPA(not sure what CO pilots are)?

F/A's would be AFA.

FSC's and Agents would be IAM

AMT's would be AMFA

Mega hubs...EWR/ORD/SFO
Large FOCUS cities...IAD/IAH/DEN !

It WOULD work, and work quite well, I think.

If it happened, it would FORCE DL, to "go it alone", because AA would be "in the sack"(in a NY minute), with NW!

"VETTY INTA..ESTIN"G" !!!!!!!!!!!!!!!!!!

NH/BB's

Very interesting indeed! Who'd be bigger in a UA+CO and AA+NW?

 

[StraaightTaalk]

Yes! We'll be seeing 747s in Continental colors again!

 

[UnitedChicago]

You do realize that US was days from ch 7 too? Now look at them.

Your visions of Delta grandeur would be thrown out the door with a merger like this. Imagine how strong this combo would be!! Amazing route structure with these two together. I guess Delta would be the first airline fatality of the majors then. Is that why you are freaking out?

Now now, why waste time engaging WT? Let him worry about his new world Delta order and let's focus on UA+CO.

 

[FlyUs]

You knew I would show up to throw a little cold water on things so here goes:

You do realize that CO and UA were at the bottom end of the scale of operating margins by network carriers during the last quarter, don't you? It's hard to convince investors to loan you billions of dollars knowing that you will surely incur losses during the process of combining the companies when your peers are running their airlines better than you are.

At least Doug Parker has managed to generate top tier financial results, even if he has a bunch of disenfranchised employees and he's sacrificing US' long term viability for short term results.

sacrificing US' long term viability for short term results??? according to who, you? Keep drinking that delta koolaid, man. You know how they make it, right, lol? How are things over there on the front line? I bet not a great place to be these days. Especially now with the industry again on shaky ground. You guys will hopefully make it out of BK.. Hang in there..

 

[LGA Fleet Service]

UAL/CAL with Gordo steering the ship would be a kick ass combination and a fierce competitor.

It would be the kind of thing that would bring AA off the sidelines and into ATL.

I don't think Arpey is willing to roll the dice on NW at this point.