We are as you have described. It seems to go unnoticed by many but we are not such a big player as we would like to believe-think Alaska without the balance sheet.
Leaked: US and UA in merger talks for over a month
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Ignacio
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What do you refer to as the ugly face? The Tempe management team? The Unions and employees? Bad reputation?
We are not big enough, contrary to what many believe, on any front to have the impact that many believe we have.
UAL Nears Merger Partner Choice
By SUSAN CAREY and MELANIE TROTTMAN
April 26, 2008 4:30 p.m.
New York (WSJ.com) - Less than two weeks after Delta Air Lines Inc. and Northwest Airlines Corp. unveiled their plan to merge, United Airlines parent UAL Corp. (UAUA) is nearing a decision about its potential merger partner.
The deliberations come as talks are heating up among carriers worried about being marginalized if they don't combine in a deteriorating industry climate.
UAL, which already has had detailed merger talks for at least a month with US Airways Group Inc., recently embarked on parallel discussions with Continental Airlines Inc., according to people familiar with those situations. United wants to come to a decision about its preferred outcome in early May, said one person familiar with the matter.
That would put a United transaction on the same timeline for regulatory scrutiny as the Delta-Northwest deal, with the goal of receiving clearance from the Justice Department before the White House changes hands in January. The thinking is that the government wouldn't approve one deal and block a second.
Analysts speculate that AMR Corp.'s American Airlines isn't sitting idly by, despite potential impediments including its sheer size, high costs and testy labor relations. One person with knowledge of the matter said American and Continental had brief, exploratory discussions in February, around the time that Delta and Northwest had first been expected to announce their deal. A second person said an alliance with another airline or an asset purchase might be more appealing to American. The company declined to comment.
Gerard Arpey, AMR's chief executive officer, recently said American "may or may not participate in consolidation." But he vowed the company would remain competitive either way.
Record high fuel prices led all the big U.S. carriers except Southwest Airlines Co. to report steep first-quarter losses. Worried about the softening economy, signs of a slowdown in demand for international flights and the heft Delta and Northwest would enjoy if their merger is approved, the other major U.S. airlines are actively soliciting dance partners.
Continental, the nation's fourth-largest carrier by traffic, has long been coveted by United, the No. 2 airline. If they combined, they would become the world's largest airline, eclipsing a Delta-Northwest pairing and significantly outdistancing American, which now is No. 1.
Continental and United have had exploratory conversations in the past. But Continental insisted it wanted to remain independent unless the competitive landscape changed. The day after Delta and Northwest announced their deal, Larry Kellner, Continental's chief executive officer, said the landscape had indeed changed and Continental would review its strategic alternatives.
The Houston airline also had been hamstrung until last week by a "golden share" of preferred stock that Northwest held in Continental. Northwest could use that stock to block Continental from merging. But once Northwest inked a merger agreement with Delta, Continental was able to redeem that special share and chart its own course.
Mr. Kellner said last week that Continental would reassess its continued participation in a marketing alliance with Northwest, Delta and the global SkyTeam group of airlines.
United is an anchor member of the rival Star Alliance international marketing group and American is a leader in a third grouping, oneworld.
Continental and United last week signed confidentiality agreements so they could engage in more focused discussions about a possible pairing, said two people familiar with the matter. A third person said Continental clearly is United's preferred partner. But if Continental doesn't do a deal with United, it knows United will find another partner, presumably US Airways, this person said.
This person dismissed industry rumors that Continental might remain independent but participate, in return for payments, in one of the industry's three global marketing alliances as a standalone company.
Poor industry conditions and tight credit markets make mergers more risky now, "but the environment says it's decision time," this person said. "Everybody has to make choices now."
More than a month ago, when the Delta-Northwest deal was hung up by pilot infighting and looked like it might not go ahead, United and US Airways, the nation's No. 7 carrier, began talking.
The two have done "a lot of work together" on what the synergies could be and discussed a number that could be at least as attractive as synergies in a United-Continental linkup, said three people familiar with the matter. The synergies would also be "meaningfully higher" than the $1 billion in annual revenue gains and cost savings that Northwest and Delta claim they could achieve by 2012, said two of these people.
US Airways declined to comment. But its CEO, Doug Parker, is an outspoken proponent of consolidation and in late 2006 he made an unsuccessful hostile bid for Delta. Mr. Parker last week didn't deny a report in The Wall Street Journal that his company was holding talks with United.
J.P. Morgan airline analyst Jamie Baker, in a research note earlier this week, said he sees more merit in a tie-up between United and US Airways than in a combination of United and Continental. Wages at United and US Airways are closely aligned and relatively low, their fleets mesh well and both already are in the Star Alliance. US Airways is much smaller than Continental, suggesting that regulators might be more likely to approve a United-US Airways combination -- despite the fact that the Justice Department rejected an earlier merger plan between them in 2001. US Airways, after two bankruptcies, merged with America West Airlines in 2005.
Mr. Baker also said because of UAL's slumping share price, it may be reluctant to do a share swap -- the preferred structure these days, and one that Delta and Northwest are proposing -- with Continental because Continental shareholders would end up with a greater proportion of the combined company. A deal with US Airways would give United shareholders more ownership of the merged entity.
But the preferences of the powerful pilot unions can't be ignored. Continental, which hasn't been through a recent bankruptcy and pays its pilots much higher wages, is seen as the preferred partner by United pilots.
UAL endured a long bankruptcy earlier this decade and cut its pilots' wages deeply and
terminated their pensions.
The United aviators see a Continental deal as a way of raising their pay to come into alignment with Continental pay rates. A deal with US Airways could have the effect of slightly bumping up those pilots' pay, giving United pilots no gains. Leaders of the United and Continental pilots, members of separate branches of the Air Line Pilots Association union, last week vowed to fight against a merger of their employers if their interests weren't taken into account.
Write to Susan Carey at [email protected] and Melanie Trottman at
[email protected]
See Story
By SUSAN CAREY and MELANIE TROTTMAN
April 26, 2008 4:30 p.m.
New York (WSJ.com) - Less than two weeks after Delta Air Lines Inc. and Northwest Airlines Corp. unveiled their plan to merge, United Airlines parent UAL Corp. (UAUA) is nearing a decision about its potential merger partner.
The deliberations come as talks are heating up among carriers worried about being marginalized if they don't combine in a deteriorating industry climate.
UAL, which already has had detailed merger talks for at least a month with US Airways Group Inc., recently embarked on parallel discussions with Continental Airlines Inc., according to people familiar with those situations. United wants to come to a decision about its preferred outcome in early May, said one person familiar with the matter.
That would put a United transaction on the same timeline for regulatory scrutiny as the Delta-Northwest deal, with the goal of receiving clearance from the Justice Department before the White House changes hands in January. The thinking is that the government wouldn't approve one deal and block a second.
Analysts speculate that AMR Corp.'s American Airlines isn't sitting idly by, despite potential impediments including its sheer size, high costs and testy labor relations. One person with knowledge of the matter said American and Continental had brief, exploratory discussions in February, around the time that Delta and Northwest had first been expected to announce their deal. A second person said an alliance with another airline or an asset purchase might be more appealing to American. The company declined to comment.
Gerard Arpey, AMR's chief executive officer, recently said American "may or may not participate in consolidation." But he vowed the company would remain competitive either way.
Record high fuel prices led all the big U.S. carriers except Southwest Airlines Co. to report steep first-quarter losses. Worried about the softening economy, signs of a slowdown in demand for international flights and the heft Delta and Northwest would enjoy if their merger is approved, the other major U.S. airlines are actively soliciting dance partners.
Continental, the nation's fourth-largest carrier by traffic, has long been coveted by United, the No. 2 airline. If they combined, they would become the world's largest airline, eclipsing a Delta-Northwest pairing and significantly outdistancing American, which now is No. 1.
Continental and United have had exploratory conversations in the past. But Continental insisted it wanted to remain independent unless the competitive landscape changed. The day after Delta and Northwest announced their deal, Larry Kellner, Continental's chief executive officer, said the landscape had indeed changed and Continental would review its strategic alternatives.
The Houston airline also had been hamstrung until last week by a "golden share" of preferred stock that Northwest held in Continental. Northwest could use that stock to block Continental from merging. But once Northwest inked a merger agreement with Delta, Continental was able to redeem that special share and chart its own course.
Mr. Kellner said last week that Continental would reassess its continued participation in a marketing alliance with Northwest, Delta and the global SkyTeam group of airlines.
United is an anchor member of the rival Star Alliance international marketing group and American is a leader in a third grouping, oneworld.
Continental and United last week signed confidentiality agreements so they could engage in more focused discussions about a possible pairing, said two people familiar with the matter. A third person said Continental clearly is United's preferred partner. But if Continental doesn't do a deal with United, it knows United will find another partner, presumably US Airways, this person said.
This person dismissed industry rumors that Continental might remain independent but participate, in return for payments, in one of the industry's three global marketing alliances as a standalone company.
Poor industry conditions and tight credit markets make mergers more risky now, "but the environment says it's decision time," this person said. "Everybody has to make choices now."
More than a month ago, when the Delta-Northwest deal was hung up by pilot infighting and looked like it might not go ahead, United and US Airways, the nation's No. 7 carrier, began talking.
The two have done "a lot of work together" on what the synergies could be and discussed a number that could be at least as attractive as synergies in a United-Continental linkup, said three people familiar with the matter. The synergies would also be "meaningfully higher" than the $1 billion in annual revenue gains and cost savings that Northwest and Delta claim they could achieve by 2012, said two of these people.
US Airways declined to comment. But its CEO, Doug Parker, is an outspoken proponent of consolidation and in late 2006 he made an unsuccessful hostile bid for Delta. Mr. Parker last week didn't deny a report in The Wall Street Journal that his company was holding talks with United.
J.P. Morgan airline analyst Jamie Baker, in a research note earlier this week, said he sees more merit in a tie-up between United and US Airways than in a combination of United and Continental. Wages at United and US Airways are closely aligned and relatively low, their fleets mesh well and both already are in the Star Alliance. US Airways is much smaller than Continental, suggesting that regulators might be more likely to approve a United-US Airways combination -- despite the fact that the Justice Department rejected an earlier merger plan between them in 2001. US Airways, after two bankruptcies, merged with America West Airlines in 2005.
Mr. Baker also said because of UAL's slumping share price, it may be reluctant to do a share swap -- the preferred structure these days, and one that Delta and Northwest are proposing -- with Continental because Continental shareholders would end up with a greater proportion of the combined company. A deal with US Airways would give United shareholders more ownership of the merged entity.
But the preferences of the powerful pilot unions can't be ignored. Continental, which hasn't been through a recent bankruptcy and pays its pilots much higher wages, is seen as the preferred partner by United pilots.
UAL endured a long bankruptcy earlier this decade and cut its pilots' wages deeply and
terminated their pensions.
The United aviators see a Continental deal as a way of raising their pay to come into alignment with Continental pay rates. A deal with US Airways could have the effect of slightly bumping up those pilots' pay, giving United pilots no gains. Leaders of the United and Continental pilots, members of separate branches of the Air Line Pilots Association union, last week vowed to fight against a merger of their employers if their interests weren't taken into account.
Write to Susan Carey at [email protected] and Melanie Trottman at
[email protected]
See Story
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InternationalShannon
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More merger blah blah blah
United also has explored merger possibilities with US Airways and American Airlines, deals that would be difficult to consummate, say people familiar with the talks. A tie-up with US Airways would draw serious opposition from United's unions, which don't want to get drawn into the labor wars of the Arizona-based carrier, sources said.
United also has explored merger possibilities with US Airways and American Airlines, deals that would be difficult to consummate, say people familiar with the talks. A tie-up with US Airways would draw serious opposition from United's unions, which don't want to get drawn into the labor wars of the Arizona-based carrier, sources said.
Go ahead. Say "I told you so." Oh wait, you were wrong.......h34r:
see current article...
co will stay independent in current market...
http://biz.yahoo.com/prnews/080427/lasu004a.html?.v=1
see current article...
co will stay independent in current market...
http://biz.yahoo.com/prnews/080427/lasu004a.html?.v=1
Right, that's why I said 767jetz was wrong.
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