Airlines Choosing Their Partners Ahead Of Delta
You could probably see this coming.
Just days after ANN reported Continental Airlines CEO Larry Kellner
was cool to the idea of pursuing a merger with another airline, a
report in the Financial Times of London suggests his earlier
comments may have been a head-fake.
The paper quotes unnamed sources close to the companies in
reporting United Airlines may be considering a new round of talks
to merge with Continental, if Delta spurns United and decides to
merge instead with Northwest.
United CEO Glenn Tilton, in a message to employees on the
subject Friday, continued advancing the notion of consolidation,
and said it's important for the company to remain in control of its
destiny. "Our position has always been that we control our
decisions; no one makes them for us. The advantage of our situation
is that we have choices that we continue to consider with our
board," Tilton said.
The FT's sources also reportedly said United and Continental
discussed merging a year ago, when it appeared a hostile US Airways
bid for then-bankrupt Delta might set off a wave of industry
consolidation. United and Continental have declined official
Record fuel prices, a slowing US economy and pressure from some
high-profile shareholders have moved airlines to find ways to cut
costs, reduce unprofitable routes, and extend global reach.
As ANN reported, as a
condition of Northwest's stake in Continental, the Houston-based
carrier can't proceed with any merger deal without the official
blessing of Northwest. One of the few exceptions is triggered if
Northwest itself merges with another airline. If that happens,
Continental can get out from under Northwest's thumb for a single,
Despite official contentions both carriers are in the running
for a merger with Delta, Northwest is seen by many as the odds-on
favorite over United. Northwest offers a more complimentary route
network for Atlanta-based Delta, and both airlines are members of
the SkyTeam alliance.
Kellner is quoted by the paper as saying he will "act
aggressively" to ensure the company does not lose ground to rivals