CO backs out of merger, UA/US deal still on?

Elevation

Veteran
Oct 21, 2002
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EMPLOYEE BULLETIN NO. 6



Dear Co-worker,

We want you to know that our Board of Directors met today and has unanimously supported management’s recommendation that, in the current industry environment, the best course for Continental is to not merge with another airline at this time.

Our recommendation, and the Board’s careful and considered decision, followed a comprehensive review of our strategic alternatives, assisted by our senior officers and advised by Continental’s outside financial and legal advisors. The Board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental’s prospects on a standalone basis.

We have significant cultural, operational and financial strengths compared to the rest of the industry, and we want to protect and enhance those strengths -- which we believe would be placed at risk in a merger with another carrier in today’s environment. We will, however, continue to review potential alliances and our membership in SkyTeam. We are considering alternatives to SkyTeam as we carefully evaluate which major global alliance will be best for Continental over the long term.

While some would prefer to see Continental pursue a merger, we strongly believe we have made the right decision – one that is in the best interests of our stockholders, co-workers, customers and the communities we serve.

Every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar. In today’s harsh environment, we must continue to adjust our business model to ensure we successfully navigate through these difficult times, so that in the future we can once again grow and prosper. As we take actions, we will communicate them to you as soon as possible. In the meantime, we must all continue to concentrate on what we do so well: delivering clean, safe and reliable air transportation every day.

Even in these tough times, we have great strengths. We have an enviable position in the New York market, a powerful hub in Houston, and hubs in Cleveland and Guam. We have a solid trans-Atlantic route network, which has recently been enhanced by our access to London Heathrow. We also have a great Latin American network and a growing portfolio of routes to India and Asia. We fly the youngest, most fuel-efficient fleet and have the best new aircraft order book among the major network carriers.

Most importantly, we have our Working Together culture, and we will ensure it remains intact. We’ve achieved our industry-leading customer service reputation because of you – our co-workers. We will all work together to get through these tough times.

We are both proud to be on your team."


Will UA/US be a sure thing now? Will CO leave Skyteam and join Oneworld with AA?



Topic edited by moderator. Discuss merger issues here.
 
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Continental Air to Shun Mergers, Remain Independent (Update1)
By Mary Schlangenstein and Zachary Mider

April 27 (Bloomberg) -- Continental Airlines Inc., the fourth-largest U.S. carrier, has decided against merging with another airline and to remain independent.

EDITED BY MODERATOR: You may NOT post news stories from other sources on this site--you may post the lead, headline and a link to the actual story, but posting the entire story is a violation of terms of service.
 
Wow. What must it be like to work for a company where you're valued and communicated with?

Basically they're saying : We have a good relationship and we're not going to mess it up by inviting the Addams family to louse it up.

BRAVO!
 
Everyone keeps talking about how US does not bring much to the merger table for UA and AA in terms of routes and hubs, and I somewhat agree.

It seems to me that the CEO's of these airlines are not necessarily looking to merge because of better routes and hubs, but rather to be able to eliminate a lot of domestic capacity, and essentially "shrink" the combined airline. I know NW/DL said there would be no shrinkage, but if they don't downsize in the domestic market, what's the point of the merger? I thought a driver in an airline merge with todays fuel prices was the elimination of overcapacity in the domestic market place...... No?

In my opinion, if we merge with UA, they are going to park a lot of planes.
 
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Wow. What must it be like to work for a company where you're valued and communicated with?

Basically they're saying : We have a good relationship and we're not going to mess it up by inviting the Addams family to louse it up.

BRAVO!


Or could it be that United is so screwed up that the merger would be a bad financial idea. If they were so concern about there relationship with employees why were they looking to merge to begin with? Almost every merger is bad for morale and employees. I think its just spin from CO, and some people swallow it.
 
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Everyone keeps talking about how US does not bring much to the merger table for UA and AA in terms of routes and hubs, and I somewhat agree.

It seems to me that the CEO's of these airlines are not necessarily looking to merge because of better routes and hubs, but rather to be able to eliminate a lot of domestic capacity, and essentially "shrink" the combined airline. I know NW/DL said there would be no shrinkage, but if they don't downsize in the domestic market, what's the point of the merger? I thought a driver in an airline merge with todays fuel prices was the elimination of overcapacity in the domestic market place...... No?

In my opinion, if we merge with UA, they are going to park a lot of planes.

Hopefully it will be United parking those payed for 737's since we are almost at our min fleet count.
 
I want US Airways to issue the same letter CO just issued except the part where they talk about all the intl routes because then it would make everyone laugh.

US will be fine on our own !
 
I bet United and US will merge and I also highly think that Parker will be in charge...

Agree 75 percent. Apparently the reason why CO backed out was its concern over UA's financial position. US may have the same concern.
 
Doug Parker...is way over rated.

This airline is in disarray.

Why can't anyone else see that.

It would be a mistake to continue to employ DoUgIe..
 

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