The news about a merger deal between Delta and Northwest airlines did't go any further than rumors, and now United and Continental are expressing renewed interest in a pairing-up that would become the world's largest air carrier
The news about a merger deal between Delta and Northwest airlines didn't go any further than rumors, and now United and Continental are expressing renewed interest in a pairing-up that would become the world's largest air carrier.
Wall Street analysts and other airline experts see another attempted pairing of large U.S. airlines as almost inevitable but indicated the industry's future under two mega-carriers would remain volatile amid record fuel prices and economic weakness.
Marrying UAL Corp.'s United to Continental Airlines Inc. would create a company with a combined 35 billion U.S. dollars in revenues and nearly 100,000 employees. Between them they would have eight U.S. hubs and an impressive domestic and worldwide network.
Letting their two big competitors combine without a challenge would bump them down to the third- and fifth-largest U.S. airlines, respectively, and pose a threat to their business on numerous domestic and international routes. AMR Corp.'s American Airlines, currently No. 1, also would slip but appears to have fewer consolidation options, according to industry experts.
Teaming up would enable them to top the size and scope of a combined Delta Air Lines Inc. and Northwest Airlines Corp., with its 32 billion dollars in revenue and 87,000 employees.
In a statement to employees, Continental's CEO Larry Kellner and President Jeff Smisek said the Houston-based airline's preference has been to remain independent, "as long as the competitive landscape remained the same." However, the executives noted, "the landscape is changing."