United seeks Northeast flights, southern hub
By Kelly Yamanouchi
Denver Post Staff Writer
Article Last Updated: 06/13/2007 09:07:23 AM MDT
United Airlines, which has been pushing for airline consolidation, wants to gain more northeast flights and a southern hub for flights to Latin America and the Caribbean.
In response to a question at a Merrill Lynch conference today about strategic objectives in an airline combination, United chief financial officer Jake Brace said, "Our network lacks a northeast presence. We also lack a southern tier hub," which he said is important for service to Latin America and the Caribbean.
Continental Airlines, which has a strong presence in Latin America and a strong hub in Newark, has been rumored as a potential merger partner for United.
But momentum for airline consolidation appears to have slowed, particularly after an attempt by US Airways to take over Delta Air Lines failed earlier this year.
Calyon Securities analyst Ray Neidl earlier this month reduced his rating on United parent UAL Corp. shares to ADD from BUY, saying, "In our opinion, there is no consolidation premium in airline share prices nor should there be at this time, since we believe there will be no major industry mergers this year."
Though UAL is interested in consolidation, it "is not something one company can do," Brace said. "Our position is very clear. Other people's is not."
He added that United does not believe that hostile takeovers in the airline industry are very successful.
"Our belief is you have to do something on a consensual basis," Brace said.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or at kyamanouchi
Dear friends, are you still waiting for those new uniforms, new routes, new aircrafts? Do you feel there's a lack of leadership at UAL? No meaningful PR announcements?
One airline analyst, and this one ONLY, wrote after getting acquainted with UAL's re-organization plan that it is a medium term plan. What if we don't find a "suitable" (dancing partner and we run out of time (reads money)?
Read on...
Safe travels...
Wednesday June 13, 3:59 pm ET
By Dave Carpenter, AP Business Writer
United Airlines Still Looking for a Merger, CFO Says
CHICAGO (AP) -- United Airlines remains interested in industry consolidation and would like to team up with a U.S. carrier with a strong presence in the Northeast and a hub in the South, its chief financial officer said Wednesday.
Jake Brace told analysts there are candidates for such a merger but indicated United has no intention of attempting a hostile takeover, citing the recent failed bid by US Airways Group Inc. to acquire Delta Air Lines Inc.
"Consolidation is not something that one company can do in isolation," he said at the Merrill Lynch Global Transportation Conference in New York. "We don't believe that ... hostiles in the airline industry are very successful. Our belief is that you have to do something on a consensual basis."
United, a unit of Chicago-based UAL Corp., publicly began touting the need for industry consolidation even before ending a three-year bankruptcy restructuring last year. But the nation's second-largest carrier has taken a lower profile on the subject in recent months with conditions less ripe for a merger.
Not only are U.S. airlines financially more stable than in recent years, both Delta and Northwest Airlines Corp. completed their restructurings this spring, thus eliminating rivals' ability to acquire them in bankruptcy and slash costs more readily in court.
Brace rejected a suggestion that United has downgraded consolidation as a priority and shed some light on what it has in mind if it can find a willing merger partner. He said it would like to combine with another airline that is strong in the Atlantic and needs a southern-tier hub to strengthen its service to the Caribbean and Latin America, where it has a smaller presence than other U.S. airlines.
"Our focus is on the Northeast, a southern-tier hub and helping us in Latin America," he said.
Delta, US Airways and Continental Airlines Inc. all have been mentioned as possible merger partners for United, although Brace didn't name names.
Airline consultant Robert Mann said Delta is the likeliest candidate, with strengths in both areas.
"If you're just taking the (Brace) hints, you'd say Delta," said Mann, who is based in Port Washington, N.Y.
"He's basically saying the same thing that (CEO Glenn) Tilton's been saying for a long time, which is 'Please, someone write us a big check.'"
Tilton and other advocates of consolidation say the industry would be financially stronger and more efficient by a merger that would eliminate excess capacity and help boost fares and revenue.
Delta CEO Gerald Grinstein disclosed last October that United had contacted the Atlanta-based airline about a possible merger in 2005, which Delta rejected. United also hired Goldman Sachs & Co. last year to explore strategic options.
Shares in United rose 10 cents to $34.70 in afternoon trading, down from $44 at the start of the year
United seeks Northeast flights, southern hub
By Kelly Yamanouchi
Denver Post Staff Writer
Article Last Updated: 06/13/2007 09:07:23 AM MDT
United Airlines, which has been pushing for airline consolidation, wants to gain more northeast flights and a southern hub for flights to Latin America and the Caribbean.
In response to a question at a Merrill Lynch conference today about strategic objectives in an airline combination, United chief financial officer Jake Brace said, "Our network lacks a northeast presence. We also lack a southern tier hub," which he said is important for service to Latin America and the Caribbean.
Continental Airlines, which has a strong presence in Latin America and a strong hub in Newark, has been rumored as a potential merger partner for United.
But momentum for airline consolidation appears to have slowed, particularly after an attempt by US Airways to take over Delta Air Lines failed earlier this year.
Calyon Securities analyst Ray Neidl earlier this month reduced his rating on United parent UAL Corp. shares to ADD from BUY, saying, "In our opinion, there is no consolidation premium in airline share prices nor should there be at this time, since we believe there will be no major industry mergers this year."
Though UAL is interested in consolidation, it "is not something one company can do," Brace said. "Our position is very clear. Other people's is not."
He added that United does not believe that hostile takeovers in the airline industry are very successful.
"Our belief is you have to do something on a consensual basis," Brace said.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or at kyamanouchi
Dear friends, are you still waiting for those new uniforms, new routes, new aircrafts? Do you feel there's a lack of leadership at UAL? No meaningful PR announcements?
One airline analyst, and this one ONLY, wrote after getting acquainted with UAL's re-organization plan that it is a medium term plan. What if we don't find a "suitable" (dancing partner and we run out of time (reads money)?
Read on...
Safe travels...
Wednesday June 13, 3:59 pm ET
By Dave Carpenter, AP Business Writer
United Airlines Still Looking for a Merger, CFO Says
CHICAGO (AP) -- United Airlines remains interested in industry consolidation and would like to team up with a U.S. carrier with a strong presence in the Northeast and a hub in the South, its chief financial officer said Wednesday.
Jake Brace told analysts there are candidates for such a merger but indicated United has no intention of attempting a hostile takeover, citing the recent failed bid by US Airways Group Inc. to acquire Delta Air Lines Inc.
"Consolidation is not something that one company can do in isolation," he said at the Merrill Lynch Global Transportation Conference in New York. "We don't believe that ... hostiles in the airline industry are very successful. Our belief is that you have to do something on a consensual basis."
United, a unit of Chicago-based UAL Corp., publicly began touting the need for industry consolidation even before ending a three-year bankruptcy restructuring last year. But the nation's second-largest carrier has taken a lower profile on the subject in recent months with conditions less ripe for a merger.
Not only are U.S. airlines financially more stable than in recent years, both Delta and Northwest Airlines Corp. completed their restructurings this spring, thus eliminating rivals' ability to acquire them in bankruptcy and slash costs more readily in court.
Brace rejected a suggestion that United has downgraded consolidation as a priority and shed some light on what it has in mind if it can find a willing merger partner. He said it would like to combine with another airline that is strong in the Atlantic and needs a southern-tier hub to strengthen its service to the Caribbean and Latin America, where it has a smaller presence than other U.S. airlines.
"Our focus is on the Northeast, a southern-tier hub and helping us in Latin America," he said.
Delta, US Airways and Continental Airlines Inc. all have been mentioned as possible merger partners for United, although Brace didn't name names.
Airline consultant Robert Mann said Delta is the likeliest candidate, with strengths in both areas.
"If you're just taking the (Brace) hints, you'd say Delta," said Mann, who is based in Port Washington, N.Y.
"He's basically saying the same thing that (CEO Glenn) Tilton's been saying for a long time, which is 'Please, someone write us a big check.'"
Tilton and other advocates of consolidation say the industry would be financially stronger and more efficient by a merger that would eliminate excess capacity and help boost fares and revenue.
Delta CEO Gerald Grinstein disclosed last October that United had contacted the Atlanta-based airline about a possible merger in 2005, which Delta rejected. United also hired Goldman Sachs & Co. last year to explore strategic options.
Shares in United rose 10 cents to $34.70 in afternoon trading, down from $44 at the start of the year
