Continental & United Merger

[Trae]

Well, i hope the same thing happens in Houston. Continental management takes over and adopts the United name, but has the HQ in Houston.

[LTAWACS]

good luck with that... UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!UGH!

[Subdude]

Well, i hope the same thing happens in Houston. Continental management takes over and adopts the United name, but has the HQ in Houston.

There hasn't been a single indication that the headquarters would be anywhere but Chicago. People can protest to their hearts' content, but it sounds like a done deal. It's not like at this date Continental management is going to stop and say "Wait! Houston wants us to stay here. We didn't realize! Let's renegotiate the deal!"

[Trae]

There hasn't been a single indication that the headquarters would be anywhere but Chicago. People can protest to their hearts' content, but it sounds like a done deal. It's not like at this date Continental management is going to stop and say "Wait! Houston wants us to stay here. We didn't realize! Let's renegotiate the deal!"

I posted this in the other thread:

I really don't see how Houston and Texas leaders could have been so blind to this. Of all people, Sheila Jackson-Lee had to get the ball rolling in the media. Now that's pretty sad. It's a shame and pretty embarassing that Continental won't even return any of the messages/calls that Mayor Parker has sent them (among other people). I guess being in Chicago really does mean that much to Smisek. They aren't leaving Houston with anything, except for some more Latin American flights.

Really is too bad. I wish our city officials were more like Dallas'. As much as people here rag on Dallas, they seem to be more prepared when it comes to corporate relocations. It's just that their suburbs like to get in the way.

[Subdude]

I posted this in the other thread:

I really don't see how Houston and Texas leaders could have been so blind to this. Of all people, Sheila Jackson-Lee had to get the ball rolling in the media. Now that's pretty sad. It's a shame and pretty embarassing that Continental won't even return any of the messages/calls that Mayor Parker has sent them (among other people). I guess being in Chicago really does mean that much to Smisek. They aren't leaving Houston with anything, except for some more Latin American flights.

Really is too bad. I wish our city officials were more like Dallas'. As much as people here rag on Dallas, they seem to be more prepared when it comes to corporate relocations. It's just that their suburbs like to get in the way.

Houston would have had to have been out there prepared weeks or months ago.

From Chicago Tribune:

Continental board to consider merger with United

Continental Airlines' board of directors is meeting Wednesday to review a potential merger with United Airlines, and the carriers are expected to decide within a matter of days whether to combine operations, say people close to the situation.

Continental directors also scheduled a second meeting for Friday, which suggests a vote on the deal could occur before this weekend, said a person close to the carrier.

The two carriers quickly reached an agreement on the social issues that typically upend mergers, and observers expected them to be able to resolve their differences on how to price the transaction

Tribune link

[Trae]

Why are our city and state leaders so unprepared?

[Hartmann]

Why are our city and state leaders so unprepared?

There was no real indication that Continental was interested in a merger, let alone moving the HQ until US Airways announced their talks with United.

I think there will be a decent sized office left in Houston due to IAH remaining a hub and maintenance base.

[Trae]

There was no real indication that Continental was interested in a merger, let alone moving the HQ until US Airways announced their talks with United.

I think there will be a decent sized office left in Houston due to IAH remaining a hub and maintenance base.

Even when Continental first announced a merger with United, there was still nothing from Houston until the next week, when it was rumored the HQ would be in Chicago. Houston and Texas leaders should have been on top of things once Continental entered merger talks again and not towards the end of it. They really dropped the ball.

[BryanS]

Even when Continental first announced a merger with United, there was still nothing from Houston until the next week, when it was rumored the HQ would be in Chicago. Houston and Texas leaders should have been on top of things once Continental entered merger talks again and not towards the end of it. They really dropped the ball.

Houston and Texas leaders do not work for, nor are they employed, by Continental Airlines.

I am sure that the management and employees at both CO and UAL know how to handle this.

Outside interference is not needed.

No one has dropped the ball.

Only CO... can be blamed when their deal with the devil burns them.

[wxman]

I completely disagree. The last thing United needs is another Hub. It is nothing but rhetoric from the top. They say that Houston will be this and that but I think we'll be forgotten about. It's just to keep the opposition quite long enough to pack up and leave. Once they do, Houston will be left with nothing but a funny walk and a jar of vaseline. So what other options will I have to fly out of IAH? I refuse to fly United. I'm mad as hell over this.

[plumber2]

Are there any former TIA employees left at Continetal, or have they just eased themselves out? I remember when Texas International acquired Continental way back when, the press likened it to David conquering Goliath.

Is it just greed, or is bankruptcy eminent for either if they decide not to merge?

[TheNiche]

I completely disagree. The last thing United needs is another Hub. It is nothing but rhetoric from the top. They say that Houston will be this and that but I think we'll be forgotten about. It's just to keep the opposition quite long enough to pack up and leave. Once they do, Houston will be left with nothing but a funny walk and a jar of vaseline. So what other options will I have to fly out of IAH? I refuse to fly United. I'm mad as hell over this.

There is absolutely no reason to believe that Continental's hub is threatened. They may cut flights that duplicate service, but otherwise, neither United or Continental have a major presence at DFW...so I don't see that our region has much competition for hub operations.

Is it just greed, or is bankruptcy eminent for either if they decide not to merge?

It is a matter of business necessity, a response to the oligopolization of the industry.

[lockmat]

Any chance the HQ will be moved to Chicago but have Continental management running the show?

[Hartmann]

I completely disagree. The last thing United needs is another Hub. It is nothing but rhetoric from the top. They say that Houston will be this and that but I think we'll be forgotten about. It's just to keep the opposition quite long enough to pack up and leave. Once they do, Houston will be left with nothing but a funny walk and a jar of vaseline. So what other options will I have to fly out of IAH? I refuse to fly United. I'm mad as hell over this.

United most certainly needs IAH. Latin America cannot be adequately served by any of UA's other hubs except for Denver, which does not have the market for Latin America. They also need EWR (Newark) since without it, they would be unable to compete with Delta's extensive JFK and LGA network.

I should also point out that the Originating/Departing traffic out of Houston is very good and Continental has a very profitable captive market, and United isn't just going to drop IAH and all of the potential revenue, that would be extremely foolish.

Everyone hears the word "merger" and thinks the airline is going to be chopped up and sold for parts... It's just not true.

All we have to do is look at the Delta/Northwest merger to see what will happen. Delta has taken full advantage of the hubs that Northwest had and is playing with the route structures to maximize revenue. The only hub that has had issues is CVG (Cincinnati) but that's a Delta hub.

Lastly, if a merger is announced next week, I'm betting there will be stipulations in it that dictate that it depend on United's profitability for the next two quarters as that was one of the issues that made Continental back away from the table last time.

Any chance the HQ will be moved to Chicago but have Continental management running the show?

It has already been stated that Smisek will be the CEO with his management team if there is a merger and United's Tilton will be Chairman.

[LTAWACS]

I cannot believe this is happening.

[C2H]

call me an optimist, but nothing hass happened yet. People are already panicing. I'm just going to wait until the announcement is made. Either way, Chicago will eventually get what it wants at the end, even if it doesn't happen this time around.

[wxman]

Well, I'm thankful that there are many other airlines that touch down here in Houston. I'll fly any carrier but United. Living on the north side, I'll even drive to Hobby for a southwest flight. I'm telling you, I'll never be caught on a United flight. I wouldn't trust them with a potato gun.

[zandago]

Had a chat with a continental manager at the gym today and asked him about the continental-united talks. His take was that it was likely to happen but was still a toss-up for where headquarters would be. He was also certain that Houston would continue to be the Continental hub. The location is great for access to South America and the SW US plus it was pretty rare for a single airline like continental to be the primary air carrier for a city the size of Houston so leaving wouldnt make sense.

[GovernorAggie]

Well I for one have accepted that they'll move the HQ. If any city can handle it, it's Houston. I think we'll feel a little bit of civic sting for a little while because cities like us, Atlanta, and Charlotte enjoy playing superlative numbers games to show how we measure up with other cities--even though we don't need to IMO. They will take their philantropic dollars to Illinois too, but overall in reality we'll be fine and may not even experience a real difference in the long term.

Or my head could just be in the sand.

[RedScare]

Houston and Texas leaders do not work for, nor are they employed, by Continental Airlines.

I am sure that the management and employees at both CO and UAL know how to handle this.

Outside interference is not needed.

No one has dropped the ball.

Only CO... can be blamed when their deal with the devil burns them.

Then, why is Chicago promising so many incentives?

[Houston19514]

Then, why is Chicago promising so many incentives?

What is Chicago promising?

[Subdude]

What is Chicago promising?

Something on the order of $35m in incentives for United to move operations from the suburbs to the Sears Tower.

The whole HQ thing is a dead issue. They're not going to turn around and renegotiate it just days before a merger is announced.

[Trae]

The HQ won't be in Sears Tower though. They are just moving some offices there. 77 Wacker Drive would be the HQ if it is going to be in Chicago.

Edit: Or maybe I read that wrong.

[Deut28Thirteen]

I don't like when huge companies merge to form larger companies, which results in an oligopoly, then when they mess up we got to bail them out. Hey Fed goverment what are you doing to help the consumer these companies are limiting competition. I get tired of hearing these banks, airlines, telecommunications companies ask for (and get) huge tax breaks just to to keep or move the company after they merger. But on that note, Annise Parker WTF are you doing, how do you let Chicago, Illinois out tax break cut Houston, Texas?!?! Heres what the city of Chicago needs to worrie about; when you are considering to bring in the National Guard to stop violence and murders, and it is not the first time this idea has come up, then you should handle that problem right away. IMO it is not a good look to have your world headquarters in a city that can not get its crime rate under control and has to call in the national gauard. Houston needs to get its oil companies to stop polluting the Gulf and other bodies of water around the world and stop plant explosions! Ms. Parker get more alternative energy companies to the city. Oil does not last forever. And Continental United sounds so much better than the other way around. Any airline would take a Houston winter over a Chicago winter anyday. It's a no brainer come to Houston!

[VicMan]

The Continental pilots could veto the ATI.

Also the Obama administration (not as friendly to mergers as the Bush administration was) is in charge, and Eric Holder, the head of the US DOJ, is sympathetic to unions. So we still have a lot of time before anything is finalized.

[GovernorAggie]

I thought about this yesterday and maybe people with more expertise could enlighten me...

Isn't it odd that we're talking about a merger to create the world's largest airline--an industry with a proven faulty business practice--at a time when the federal government has been REDUCING the size of banks (also an industry that has been shown overall to have faulty business practices).

How can the Feds on one hand slash big banks but then allow airlines (who have already been at the bailout bin) to follow the opposite pattern?

[VicMan]

They feds may not allow the opposite pattern to happen. The merger of Delta and Northwest was completed when Bush was still in office.

I thought about this yesterday and maybe people with more expertise could enlighten me...

Isn't it odd that we're talking about a merger to create the world's largest airline--an industry with a proven faulty business practice--at a time when the federal government has been REDUCING the size of banks (also an industry that has been shown overall to have faulty business practices).

How can the Feds on one hand slash big banks but then allow airlines (who have already been at the bailout bin) to follow the opposite pattern?

[Houston19514]

Something on the order of $35m in incentives for United to move operations from the suburbs to the Sears Tower.

The whole HQ thing is a dead issue. They're not going to turn around and renegotiate it just days before a merger is announced.

Oh that. I thought he was talking about some incentives for keeping the HQ in Chicago. The incentives you speak of are not related to the merger or to the Headquarters.

How certain can we really be that the HQ issue is a dead issue? No announcements whatsoever have been made by either Continental or United. So far as we know, the whole "HQ will be in Chicago, United will be the name" meme might be nothing more than the results of creative journalism by the Chicago Tribune, picked up in turn by the rest of the media. I am not giving up hope, for the simple reason that, from a purely business point of view and having nothing to do with my preference for one city or another, putting the merged companies HQ in Chicago would be bone-headed.

[Trae]

Oh that. I thought he was talking about some incentives for keeping the HQ in Chicago. The incentives you speak of are not related to the merger or to the Headquarters.

How certain can we really be that the HQ issue is a dead issue? No announcements whatsoever have been made by either Continental or United. So far as we know, the whole "HQ will be in Chicago, United will be the name" meme might be nothing more than the results of creative journalism by the Chicago Tribune, picked up in turn by the rest of the media. I am not giving up hope, for the simple reason that, from a purely business point of view and having nothing to do with my preference for one city or another, putting the merged companies HQ in Chicago would be bone-headed.

I agree. I can see why they would move to Chicago over Houston even five or six years ago, but not now. United culture will most likely continue if you have the merged HQ in Chicago. Continental culture would if it is in Houston. The only thing Chicago offers that Houston doesn't (right now) is the prestige of being in the city. Maybe that's all Smisek needs. Would be shortsighted, though.

[citykid09]

Oh that. I thought he was talking about some incentives for keeping the HQ in Chicago. The incentives you speak of are not related to the merger or to the Headquarters.

How certain can we really be that the HQ issue is a dead issue? No announcements whatsoever have been made by either Continental or United. So far as we know, the whole "HQ will be in Chicago, United will be the name" meme might be nothing more than the results of creative journalism by the Chicago Tribune, picked up in turn by the rest of the media. I am not giving up hope, for the simple reason that, from a purely business point of view and having nothing to do with my preference for one city or another, putting the merged companies HQ in Chicago would be bone-headed.

Thats what I was thinking. Maybe some of those Chicago journalist wishfully want the HQs to be in Chicago, so they made up the fact that they heard from an insider that the HQ would be in Chicago.

These may not have been an option, but why not merge with American or US Airways? If merged with American the HQ would stay in Texas (Fort Worth or Houston) and if merged with US Airways, I'm sure Houston would have a better chance of keeping the HQ. I know business deals like these are made for the better good of the company's stakeholders, but IDK, I don't think it will workout that well.

I wonder what the city would be like if uncorrupted Enron was still in Houston, or if Compaq choose to stay in Houston or if HP moved the HQs to the city. I also wonder what it would be like to have the largest airline in the world. Thats something to boost about!