UA-CO Merger Rumors Now Surfacing on Wall Street

[lpbrian]

If UA and CO were to merge, some Pacific assets would half to be shed. Air Mike anyone?

 

[Bulscu]

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.

 

[NewHampshire Black Bears]

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.

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LGA(JFK),

Perhaps you'd be right about AA/NW, (perhaps),

But DL brings NOTHING to AA, that it does'nt have already, or could have had, or still could have !

(Oops, I forgot about the BOS/LGA/DCA shuttle.)

Also to consider is;

1. UA/CO happens

2. (Somehow) AA lets DL/NW happen

3. "THEN WHAT" ???

We(AA) dropped the (Asia) ball in the early 80's.
THAT mistake will NEVER be allowed to happen again !!

NH/BB's

 

[NewHampshire Black Bears]

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

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I'd suppose UA/CO.

AA would/could "cherry pick" NW, and sell other "assets" to other carriers, because I'd guess the FEDS would be more agreeable to a 3-way deal these days.

Another thing that's not "mentioned" in these hypothetical M/A theory's, is (sadly) NW, with their new (brutal) contracts , minus the AMT's, bring very few employees to the mix, considering their long route system.


NH/BB's

 

[Fly]

If UA and CO were to merge, some Pacific assets would half to be shed. Air Mike anyone?

I doubt that because of the complete lack of overlap between the two carriers.

 

[USA320Pilot]

It is my understanding that the proposed United-Continental deal cannot happen unless Northwest Airlines approves of a corporate transaction because the Eagan-based carrier holds a "golden share" in Continental per their alliance. This "golden share" allows Northwest to block any Continental deal that would threaten Northwest. Considering Northwest's precarious position do you think they would want a Continental/United merger?

Regards,

USA320Pilot

 

[Bulscu]

block 'any' Continental

Regards,

USA320Pilot

incorrect

 

[LGA Fleet Service]

It is my understanding that the proposed United-Continental deal cannot happen unless Northwest Airlines approves of a corporate transaction because the Eagan-based carrier holds a "golden share" in Continental per their alliance. This "golden share" allows Northwest to block any Continental deal that would threaten Northwest.

IIRC that only comes into play if Continental is being acquired not if they are the acquiring entity.

 

[Fly]

It's amazing what a couple of savy business partners may come up with. BUT, I'd suspect that if it's a merger, much like the US/AWA merger, then neither will be "aquiring" anyone and that golden share will not be worth much.

OR they just may be helping NW to emerge from ch 11 by themselves by throwing cash at them......a little ( a LOT ) of cash that would ensure that no one else gets to pick at the NW carcass which would also prove to be a great way to make UAL/CAL the strongest airline.

That would prove to be heart attack worthy to some DL customers.

 

[UnitedChicago]

It's amazing what a couple of savy business partners may come up with. BUT, I'd suspect that if it's a merger, much like the US/AWA merger, then neither will be "aquiring" anyone and that golden share will not be worth much.

OR they just may be helping NW to emerge from ch 11 by themselves by throwing cash at them......a little ( a LOT ) of cash that would ensure that no one else gets to pick at the NW carcass which would also prove to be a great way to make UAL/CAL the strongest airline.

That would prove to be heart attack worthy to some DL customers.

very good point fly. united is quite good at cutting deals. just walked through LAX in the 60 gates - continental sure parks close to united...

 

[LGA Fleet Service]

BUT, I'd suspect that if it's a merger, much like the US/AWA merger, then neither will be "aquiring" anyone and that golden share will not be worth much.

I didn't mean it as such Fly, I meant it would be legal semantics to render the 'Golden Share' into Iron Pyrite.

 

[whlinder]

Considering Northwest's precarious position do you think they would want a Continental/United merger?

If UA/CO were to pay NW to waive this clause, do you think NW, in their precarious position, would turn down cash?

 

[Vikedog64]

very good point fly. united is quite good at cutting deals. just walked through LAX in the 60 gates - continental sure parks close to united...

And NW parks close to DL in the majority of airports because of Skyteam. Your point is what??? :blink:

 

[767jetz]

I think someone who shall remain nameless, shivers at the thought of UA doing a deal with an airline that actually makes sense (ie:CO), and seeing his dreams of one day flying UA's widebodies go up in smoke permanently.

Personally, I think IF consolidation is inevitable, then CO is the best partner for UA. Speaking in relative terms (UA being the 2nd largest and CO the 5th) both sides bring a similar mix of aircraft, seniorities, and training cultures to the table with minimal overlap. Of all the possible combinations, this one would be the "least worst."

Bringing together such strong Asian and European markets would make a powerhouse, Regardless of what the combined airline is called or who runs it.

 

[JFK777]

About shedding Asia and other assets.

With UA recently transferring JFK-NRT to IAD-NRT they only have CAL's EWR to NRT service from New York, same for London since UA sold JFK to LONDON to Delta; Continental could now serve LHR with some of the UA slots.

Air Mike is unique and UA doesn't have anything like it, why couldn't it stay? Last I heard it made money too. Air Mike is really Guam's airline with little relationship operationally to CAL.

CAL brings Houston to NRT as well as EWR to NRT, those are cal's big Asian routes. UA's IAD, ORD, LAX, SFO & HNL - NRT service will mesh nicely with Houston and Newark . UA also has the SFO hub to Asia and Australia, a market I know many Continental people miss since CAL once flew there. I think UA has by stealth in moving JFK to IAD-NRT taken any asset sales or shuffling out of the regulators radar. Air MiKE should stay since tjere is really no reason to sell it.