United and Continental consider alliance

What many airline industry analysts have long speculated has now been confirmed: United and Continental Airlines are currently in talks aimed at creating an alliance, or possibly even merging the operations of these two carriers. This comes only a few weeks after Northwest’s decision to merge with Delta Air Lines. If United and Continental were, indeed, to form an alliance, the US airline industry would be dramatically reshaped, as four of the largest American carriers would have either merged, or forged another union with a rival. The difference between what United and Continental proposal, however, is that they are looking to become partners, without having to fully merge all of their operations. As such, the two carriers are likely to maintain a degree of independence even if they reach a consensus.

Some analysts have also reported that United is still attempting to merge with US Airways, although the success of these efforts is sometimes doubted. Yet it is generally understood that the alliance with Continental would only go ahead if the potential merger fails. This suggestion was then confirmed by an anonymous source, close to the company. A third option for United would be to remain fully independent, and the firm is likely to discuss all three possibilities in the coming days.

Mary Clark, a Continental spokesperson, remained relatively tight-lipped, simply saying that the firm is “examining its alliance relationships.” Jean Medina of United Airlines said even less, declining comment altogether. Bob Mann, a commercial aviation consultant, however expressed some doubt as to whether a Continental-United alliance would actually go through. According to his calculations this may not end up happening, because the cost savings for the two carriers may not be that significant.

www.continental.com