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Continental & United Merger

citykid09

By citykid09
in Planes

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Hartmann

Hartmann

Posted
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It may have already been addressed, but what happens to IAH if this happens? Do we become just a fly-by-night airport all of a sudden? Does anybody know what happened to DIA or DET after Continental pulled out and NW left respectively?

IAH will still be around and in full force. In fact, I'd predict IAH growth to the Middle East and South America. Two European routes I'm pretty sure we'll see are Houston-Munich (to connect to Lufthansa) and Houston-Brussels (to connect to Brussels Airlines and their amazing Africa routes).

The only airport that would really see a change would be Cleveland. It's traffic has already significantly dropped and trying to do business out of O'Hare and Cleveland is just not economically sound.

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LTAWACS

LTAWACS

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Actually we're closer to 6 MILLION people in the Houston area. Chicago has ~9 million and some experts believe Houston is on pace to become the 3rd largest city in the country by 2030. We have more fortune 500 companies (25 vs their 22) and home to headquarters of precious commodities that have gotten the airlines in trouble to begin with--OIL PRICES. Houston is clearly the better choice.

How can get make them understand this?

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Hartmann

Hartmann

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Actually we're closer to 6 MILLION people in the Houston area. Chicago has ~9 million and some experts believe Houston is on pace to become the 3rd largest city in the country by 2030. We have more fortune 500 companies (25 vs their 22) and home to headquarters of precious commodities that have gotten the airlines in trouble to begin with--OIL PRICES. Houston is clearly the better choice.

Personally, I think Houston is a better choice, but the statistics are on Chicago's side:

Chicago's 2009 MSA numbers: 9,580,567

Houston's: 5,867,489

That puts Houston at number six when using the metropolitan statistical area while Chicago is 3rd. Houston did see a 24% growth between 2000 and 2009.

The precious commodities and even the green energy markets are what make Houston a good choice, however, I think their minds are already made up.

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Trae

Trae

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Not to mention that Houston is growing much faster than Chicago. If they put the HQ here, they can grow with the city. Chicago is a stagnant market nowadays. Especially when compared to cities like Houston and Dallas, which are on their way up. Hell, even Houston's GDP is catching up to Chicago's.

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TheNiche

TheNiche

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Population and aggregate regional GDP are not compelling business reasons to decide between Houston and Chicago.

It's about the availability of specialized labor or the willingness of labor to relocate between cities, the cost of labor, the tax burden, economic development incentives, terms of existing leases, and potential special considerations granted to politicians, unions, or the corporate governance.

It's about factors that are important to their company, not to internet demographics nerds like us.

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LTAWACS

LTAWACS

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Personally, I think Houston is a better choice, but the statistics are on Chicago's side:

Chicago's 2009 MSA numbers: 9,580,567

Houston's: 5,867,489

That puts Houston at number six when using the metropolitan statistical area while Chicago is 3rd. Houston did see a 24% growth between 2000 and 2009.

The precious commodities and even the green energy markets are what make Houston a good choice, however, I think their minds are already made up.

We have to do something to change their minds. Ugh.

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TheNiche

TheNiche

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We have to do something to change their minds. Ugh.

I think...we all know...what needs to be done. The time has come for brave men to stand up and fight for their city's good name.

If we don't hear from you in a week, some of us shall vow to avenge you (maybe).

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BryanS

BryanS

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Actually we're closer to 6 MILLION people in the Houston area. Chicago has ~9 million and some experts believe Houston is on pace to become the 3rd largest city in the country by 2030. We have more fortune 500 companies (25 vs their 22) and home to headquarters of precious commodities that have gotten the airlines in trouble to begin with--OIL PRICES. Houston is clearly the better choice.

Not for them.

25 fortune 500 companies. Big deal. Which ones?

Not Boeing, not in Houston...

And while it is not the NYMEX...

There is the CME.

In Chicago.

They would be closer to the management of the best plane maker in the world and the financial markets.

Especially my favorite: the CBOE.

...and screw Airbus.

Maybe that is one good thing out of this: CO's preference for Boeing aircraft.

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lockmat

lockmat

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per local ABC news coverage...

The letter (from mayor and county judge) goes on to boast that Houston has over 3,000 international companies, 22 foreign banks and 92 foreign consulates.

I am sure Chicago has just as good or better numbers.

letter from Greater Houston Partnership

http://dig.abclocal.go.com/ktrk/ktrk_042710_continental.pdf

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citykid09

citykid09

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per local ABC news coverage...

I am sure Chicago has just as good or better numbers.

letter from Greater Houston Partnership

http://dig.abclocal.go.com/ktrk/ktrk_042710_continental.pdf

Do you think those somewhat lackluster reasons are good enough to have the HQs in Houston? I wounder what Chicago letter looks like? It just seems to me that they aren't trying hard enough. Maybe I'm exaggerating, but it seems like Chicago is trying harder.

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TheNiche

TheNiche

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Do you think those somewhat lackluster reasons are good enough to have the HQs in Houston? I wounder what Chicago letter looks like? It just seems to me that they aren't trying hard enough. Maybe I'm exaggerating, but it seems like Chicago is trying harder.

They're treating big issues pretty superficially and aren't driving the points home. I'd prefer to see direct comparisons between our data and Chicago's.

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Houston19514

Houston19514

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I think Houston should be the headquarters without a doubt, and I say this as a Continental stockholder, not just as a Houston booster. Further, my preference for Houston has nothing to do with my love of Houston. For this proposed merger to have any chance of succeeding, they have to do everything possible to adopt the Continental culture and get rid of the United culture. They cannot possibly accomplish that by adopting the United name and putting the HQ in Chicago. The name is less important and for the purpose of compromise, United should probably be the name. But the HQ MUST be in Houston.

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Trae

Trae

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per local ABC news coverage...

I am sure Chicago has just as good or better numbers.

letter from Greater Houston Partnership

http://dig.abclocal....continental.pdf

I know for a fact that Houston has more foreign consulates than Chicago. Not sure on foreign banks or international companies though. But, I think they need to try a little harder. Start comparing facts between Houston and Chicago and why Houston is the better choice. They're just getting started though. And an article from the Chron:

City leaders eager to hold on to Continental

By JENALIA MORENO and PURVA PATEL

Houston Chronicle

April 27, 2010, 10:01PM

http://www.chron.com...ss/6978844.html

Houston leaders said they want a chance to offer incentives to encourage Continental Airlines to keep its headquarters here if it merges with Chicago-based United Airlines.

There are indications that if the two carriers merge, the new company would be based in Chicago. Two years ago, the airlines discussed merging, and Chicago was planned as the headquarters of the new company until Continental ended those talks.

While no incentive package has been assembled yet, state and city officials said they were willing to match anything Chicago has to offer and simply want a seat at the table.

“We may be a little bit late to the dance because we weren't aware these talks were going to suddenly go on to the front burner, but we're definitely reaching out and we feel the board and chairman of Continental know what a great place Houston is and how much we have to offer them,” Parker said during a news conference also attended by state Sen. Rodney Ellis, D-Houston.

On Tuesday, Mayor Annise Parker, County Judge Ed Emmett and the Greater Houston Partnership sent a letter to Jeff Smisek, Continental's chairman, president and CEO, and Glenn Tilton, United's chairman, president and CEO.

As soon as news of merger talks hit the media, Parker said, she left messages for Smisek to let him know the city was willing to work with a merged company in order to keep its headquarters in town.

She said a potential merger was a business decision and that the city doesn't need to sell leadership at Continental about Houston's assets, but does need to persuade the leaders of United.

Gov. Rick Perry made a similar call, said Aaron Demerson, director of the governor's economic development and tourism division. If the merged company leads to job creation in Texas, the state could consider an award from the Texas Enterprise Fund among incentives, he said.

More at the link.

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citykid09

citykid09

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If Houston loses Continental it loses a fortune 500 company plus more. If it can get the merged company to HQ in the city, it will be home to the World's largest airline! In addition, it would continue to be one of the World's busiest airports and I wouldn't be surprised if becomes a top 5.

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lockmat

lockmat

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If Houston loses Continental it loses a fortune 500 company plus more. If it can get the merged company to HQ in the city, it will be home to the World's largest airline! In addition, it would continue to be one of the World's busiest airports and I wouldn't be surprised if becomes a top 5.

If we lose the HQ, how many people would we actually be losing? Many job functions cannot be done remotely, but I'm not sure how many office jobs that can be moved they have.

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LTAWACS

LTAWACS

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If we lose the HQ, how many people would we actually be losing? Many job functions cannot be done remotely, but I'm not sure how many office jobs that can be moved they have.

Lots. I know tons of ppl in their downtown HQ.

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JJVilla

JJVilla

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Looks like someone is trying to keep the HQ in Houston...

http://www.chron.com...ss/6976389.html

Just one analyst's quote from the above article but positive:

“It's just price,” said Roger King, an airline analyst with CreditSights. “Who is willing to pay what? Investment bankers have been doing merger deals for years, and they'll figure out something soon.”

Continental's stock price rose 98 cents to close at $22.99 on Monday, and United's fell 63 cents to $22.36.

King expects a deal within the week, and he thinks the airline should be based in Houston and run by Continental leaders because “the management team is better.”

So better quality of the company should prevail not who thinks their city is bigger or better. I would also be fine with the United name as long as it's managed mainly by CO and based in Houston. I'll be thinking about this as I fly tomorrow night to Buenos Aires/Montevideo for vacation on CO flight!

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C2H

C2H

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The leaders of Continential will be stupid if they do this. Messing up Continential's rep by merging it into a crappy Airline carrier like United? If they do this, then it proves how inadequate Continential really is and maybe they should lose their name.

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TheNiche

TheNiche

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The way this thing looks, it is Not a merger, but a buy out. Continental goes away, so there is no way that the HQ will be here.

Unless you happen to be an accountant computing a deal's impact on corporate tax liability, a merger or buyout is pretty much the same thing. At the end of the day, management from each company negotiates the terms and conditions, including who gets to manage the new company. And the management team most willing to walk away from the deal will probably prevail (or get sweet severance packages/incentives). They may try to mix the management team, but that usually results in a blood-bath as corporate cultures collide.

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VicMan

VicMan

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The idea is that the CO management will be in control of the new carrier. If the union issues and logistics can be merged with few problems and infighting, and if the finances of both carriers are okay, then as long as the CO management is in charge, the carrier will be okay.

The prevailing idea is that "United" will be the new name of the carrier anyway.

The leaders of Continential will be stupid if they do this. Messing up Continential's rep by merging it into a crappy Airline carrier like United? If they do this, then it proves how inadequate Continential really is and maybe they should lose their name.

Remember US Airways and America West? The America West management team became the leader, and the HQ moved to Phoenix, but the carrier used the name US Airways.

The way this thing looks, it is Not a merger, but a buy out. Continental goes away, so there is no way that the HQ will be here.

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