Delta Airlines

[BryanS]

There are almost six million people in the metro, and with Houston growing twice as fast, as well as Texas' business climate, why wouldn't they just keep it here? Like I said earlier, the United CEO will be chief of operations (something like that). Why not have him just stay in Chicago, and CO Management gets to operate from home (Houston).

Because, perhaps - we don't need them (CO) to (stay). Per your own statistics, we'll be just fine. What you suggest (split management between Houston/Chicago) may persist... for a while. But why duplicate your costs? Pick one city or the other. The whole point behind merging business is to capitalize on economies of scale, meaning put in place a streamlined management structure over a wider area of combined company assets (aircraft, routes, etc.). That's how you get your cost savings. Paying a light bill both in Chicago and Houston makes no sense.

[Subdude]

If you ask me they would be mad to keep the United name, since the public associates it with customer service that borders on the abusive. Inasmuch as anyone has positive feelings about any airline brand, Continental seems to have a somewhat decent reputation.

[NewMND]

Houston may not need CO to stay, but it seems like Continental has been a good citizen. It seems like they are always helping out with charitable events and giving to charities, giving back to the community.

[KinkaidAlum]

The much bigger problem is that United's unions are much more confrontational than CO's. Continental enjoys a somewhat respectful relationship with its employees. United decidedly less so. The fear by many is that the logistics of integrating labor from the two companies will be like oil and water.

BINGO.

As a 15 year loyal Continental flyer, I hate the idea of this merger. I spent 4 years connecting to upstate NY on United and I hope I never have to fly them again. The employees vs. management environment at UA makes flying a dicey prospect.

Bigger doesn't always = better.

My DREAM is for Continental to acquire Alaska Airlines creating a major West Coast presence and a Western Hub in Seattle. That would give CO a hub in Houston, Newark, Cleveland, and Seattle with major focus cities in Los Angeles and San Fran. Alaska is a quality carrier ala Continental and they have very similar all Boeing fleets. The corporate cultures at both companies are also way more positive than they are at United.

[CDeb]

Holy crap! I agree with KinkaidAlum on something. It feels so dirty.

Seriously, United is going ruin the best of the major carriers and the primary culprit is going to be goonionism.

[VicMan]

My DREAM is for Continental to acquire Alaska Airlines creating a major West Coast presence and a Western Hub in Seattle. That would give CO a hub in Houston, Newark, Cleveland, and Seattle with major focus cities in Los Angeles and San Fran. Alaska is a quality carrier ala Continental and they have very similar all Boeing fleets. The corporate cultures at both companies are also way more positive than they are at United.

Alaska has resisted attempts at consolidating with other airlines. AFAIK Alaska prefers to codeshare with everyone else...

I agree that I do not want to see CO merging. I'd rather let United and US Airways merge.

[Trae]

BINGO.

As a 15 year loyal Continental flyer, I hate the idea of this merger. I spent 4 years connecting to upstate NY on United and I hope I never have to fly them again. The employees vs. management environment at UA makes flying a dicey prospect.

Bigger doesn't always = better.

My DREAM is for Continental to acquire Alaska Airlines creating a major West Coast presence and a Western Hub in Seattle. That would give CO a hub in Houston, Newark, Cleveland, and Seattle with major focus cities in Los Angeles and San Fran. Alaska is a quality carrier ala Continental and they have very similar all Boeing fleets. The corporate cultures at both companies are also way more positive than they are at United.

I like that. Only thing is, United as a strong Asian presence. Something Continental does not have right now.

[BryanS]

My DREAM is for Continental to acquire Alaska Airlines creating a major West Coast presence and a Western Hub in Seattle. That would give CO a hub in Houston, Newark, Cleveland, and Seattle with major focus cities in Los Angeles and San Fran. Alaska is a quality carrier ala Continental and they have very similar all Boeing fleets. The corporate cultures at both companies are also way more positive than they are at United.

Keep dreaming. Domestic air travel is a BIG LOSER, for all the "major" airlines. Major airlines (excluding Southwest - to me, they are a major airline, but save that for later), typically lose money on domestic (because they are competing with Southwest) - but make up for those losses on international routes. CO doesn't need more money-losing domestic coverage, anywhere, including the northwest. They'd rather trade that option for more international connectivity; hence, United... Alaska would only mean they would ahve to grow their Asian presence; something they get "for free" with a United merger.

Whatever CO decides to do - they better do it quick. Because per their own former CEO: "You don't want to be the last one, stuck to pick the ugly girl at the dance." Or something like that. That is, pick your best merger partner now, or else you'll be stuck with less than an optimal solution.

[Trae]

Add to that, United has hubs in San Francisco (SFO), Denver (DEN) and Los Angeles (LAX) already. Add to that United's strong Asian service, and that is the best choice for Continental. Just hope the HQ stays in Houston (have heard from someone highly-placed, that works in the HQ Downtown that Continental would like to stay in Houston every way possible, but business is not 100% guaranteed).

[KinkaidAlum]

Asia is a great market to get into but I would much rather see CO grow into that market indepedently.

CO just ordered two more 777s and have 25+ 787s on order. CO already flies to Tokyo, Hong Kong, Beijing, Delhi, Mumbai, and Tel-Aviv. Shanghai is coming on-line soon too. CO also has Air Mike operating a hub in Guam all over the Pacific Rim.

I just don't see how adding an ENORMOUS airline with multiple blemishes (recent bankruptcy, labor issues, credit rating issues, horrible public reputation for service, etc...) is the answer.

CO's biggest issue with Asia service is that some of the largest markets to Asia are found on the West Coast. Sure, "merging" with United would get them into those markets, but so would acquiring Alaska Air and creating their own Asian hub in the Pacific Northwest.

Continental has been working hard and flying right for years. They are about to that motto if they go ahead with the UA merger.

[BryanS]

Asia is a great market to get into but I would much rather see CO grow into that market indepedently.

CO just ordered two more 777s and have 25+ 787s on order. CO already flies to Tokyo, Hong Kong, Beijing, Delhi, Mumbai, and Tel-Aviv. Shanghai is coming on-line soon too. CO also has Air Mike operating a hub in Guam all over the Pacific Rim.

I just don't see how adding an ENORMOUS airline with multiple blemishes (recent bankruptcy, labor issues, credit rating issues, horrible public reputation for service, etc...) is the answer.

CO's biggest issue with Asia service is that some of the largest markets to Asia are found on the West Coast. Sure, "merging" with United would get them into those markets, but so would acquiring Alaska Air and creating their own Asian hub in the Pacific Northwest.

Continental has been working hard and flying right for years. They are about to that motto if they go ahead with the UA merger.

If they don't do "something" ... or should I say, they elect to do "nothing" and stay independent, then they will get squished like a little bug, in this post-merger environment. The new DL+NWA airline, and AA, will eat CO's lunch.

Just think of a merger with UAL as a home foreclosure type of deal: damaged goods, at a discounted price - something that once you acquire - you can go in and fix up, to your liking. Why build a new house (creating their own Asian hub), when you get a fixer-upper, in the exact location you're looking for (leveraging UAL's existing Asian network) at a "lower cost." This could be a gem of a deal.

[Trae]

Just don't move the HQ .

[H-Town Man]

Perhaps this would be a good time for Gov. Perry to use his $200 million Texas Enterprise Fund. Of course, he really only seems to care about Dallas.

[bcnet]

Seattle may work for a hop to Asia but wouldn't work well for domestic destinations as a feeder hub. From a travelers perspective, I would look forward to having a more western hub like Denver (and SFO to a lesser extent) as you can fly Houston through Denver to many small and mid markets out west staying on CAL/UAL. CAL's current route map our west is pretty spartan with IAH being the western-most hub.

[editor]

Seattle may work for a hop to Asia but wouldn't work well for domestic destinations as a feeder hub. From a travelers perspective, I would look forward to having a more western hub like Denver (and SFO to a lesser extent) as you can fly Houston through Denver to many small and mid markets out west staying on CAL/UAL. CAL's current route map our west is pretty spartan with IAH being the western-most hub.

With IAH, a combined CO-UA would make the DEN redundant. I think it's too close to Houston to keep it.

Of course, I've never understood why United waters down its SFO hub with all the SEA traffic, especially to Asia. But with the Delta-Northwest merger, United-Continental would probably get squeezed out of Seattle anyway. And possibly Tokyo, too.

[editor]

Ran across these today:

[VicMan]

I'm not particularly sure how a merger of other airlines would crush CO. How would this happen?

If they don't do "something" ... or should I say, they elect to do "nothing" and stay independent, then they will get squished like a little bug, in this post-merger environment. The new DL+NWA airline, and AA, will eat CO's lunch.

Just think of a merger with UAL as a home foreclosure type of deal: damaged goods, at a discounted price - something that once you acquire - you can go in and fix up, to your liking. Why build a new house (creating their own Asian hub), when you get a fixer-upper, in the exact location you're looking for (leveraging UAL's existing Asian network) at a "lower cost." This could be a gem of a deal.

[Trae]

I'm not sure it would crush Continental either. They would just be larger than CO.

[BryanS]

I'm not sure it would crush Continental either. They would just be larger than CO.

MUCH larger. The only airline out there, not really talking merger, is AA. They're going to get boxed into a corner, and just eviscerate CO in Latin America. DL already has strong presence in Europe. CO has "worked hard and flown right" for too many years to get absolutely molested by bigger, combined airlines, on International routes. Southwest has already ruined their world on the domestic front. Even Gordo is pushing consolidation, big time...

[TxDave]

MUCH larger. The only airline out there, not really talking merger, is AA. They're going to get boxed into a corner, and just eviscerate CO in Latin America. DL already has strong presence in Europe. CO has "worked hard and flown right" for too many years to get absolutely molested by bigger, combined airlines, on International routes. Southwest has already ruined their world on the domestic front. Even Gordo is pushing consolidation, big time...

A Continental-United pairing would create the world's largest airline (although bigger is not always better!)

CO has successfully repositioned itself over the last few years. A UA merger could damage that progress.

Perhaps CO should follow the AA independent lead (for now) and see how this first merger (assuming Delta-NW) plays out

[Trae]

A merge with Alaska would be fine, then CO would expand in Asia over the next few years after the merger.

[KinkaidAlum]

MUCH larger. The only airline out there, not really talking merger, is AA. They're going to get boxed into a corner, and just eviscerate CO in Latin America. DL already has strong presence in Europe. CO has "worked hard and flown right" for too many years to get absolutely molested by bigger, combined airlines, on International routes. Southwest has already ruined their world on the domestic front. Even Gordo is pushing consolidation, big time...

This is not necessarily true.

While Delta has expanded wildly into Europe and Latin America over the last 2 years, their yields are HORRIBLE compared to Continental. Continental's yields to Asia, Latin America, and Europe are quite high compared to the other legacies. One reason for that is that Continental has a stable product. Liveries are the same. Interiors match. Planes are new (Continental isn't flying M80s, AB3s, DC9s, etc...). Food is served at meal times. Service is almost always decent. Business folks who pay higher fares tend to like these things and are willing to pay for them to be assured they will get where they need to go with their bags in tow.

Also, Delta and Northwest will make a HUGE airline. That said, early indications show that Wall Street isn't too impressed by this merger and the details outlined last week.

[Subdude]

The track record of mergers in delivering value to shareholders is spotty at best. From a profit viewpoint there are a lot of potential advantages to remaining relatively small and nimble. Mergers are especially hard to execute with respect to getting different corporate cultures to mesh. Southwest has been very successful and avoided any mergers that would only dilute its business model. Continental should follow the same route, instead of rushing in a panic into United's arms because Delta and Northwest are merging. I'm sure there are i-bankers egging them on, but often the wisest course is to stand back.

[RedScare]

MUCH larger. The only airline out there, not really talking merger, is AA.

Umm, actually, Continental is also mulling the possibility of merging with American. United is getting all of the pub, but AA is in the mix as well.

[H-Town Man]

Umm, actually, Continental is also mulling the possibility of merging with American. United is getting all of the pub, but AA is in the mix as well.

Wow, a Houston vs. Dallas fight for HQ. That would be something.

[RedScare]

Wow, a Houston vs. Dallas fight for HQ. That would be something.

HAIF would set a record for closed threads/flame wars.

[editor]

Wow, a Houston vs. Dallas fight for HQ. That would be something.

Outside of Texas, how much overlap is there in Continental/American routes?

[TheNiche]

Outside of Texas, how much overlap is there in Continental/American routes?

Continental Route Maps: Domestic; International

United Route Maps: Domestic; International

American doesn't have their act together. Route maps are only available broken out by hub, and even then, provided by a third party website. ____ing Dallas.

[CALMSP]

the last thing we would want to do is join up with AA who offers us absolutely nothing except some more LHR slots. Bring on AA and we lose everything we have bragged about the last couple years in regards to our fleet. AA has nothing, UA has LHR, ASIA, SFO, ORD and LHR.

[BryanS]

Now I am hearing that perhaps AA and CO will feast on the carcass of UAL. That is, UAL gets divided up and split between CO and AA. This keeps CO and AA intact (but larger), allowing both airlines to get around union labor contract issues. It will absolutely ensure the destruction of UAL, of which CO and AA get to pick over the parts and pieces for themselves.