Contintnetal Merger

[2112]

Anybody read that article today in the Chronicle? What's the deal, are they speculating a move of Continental headquarters outside of DT, or the city entirely? Or is this just talk of downsizing as a product of the merger. I hope Contintnental stays put right where it is.

[LTAWACS]

I read it. The article is very vague and does not procide any details. It seems to me it's nothing but speculation at this point. More of a "what-if" article. I'll ask around at Continental HQ tomorrow.

[TheNiche]

Anybody read that article today in the Chronicle? What's the deal, are they speculating a move of Continental headquarters outside of DT, or the city entirely? Or is this just talk of downsizing as a product of the merger. I hope Contintnental stays put right where it is.

In a merger situation (not yet occuring), there are three likely outcomes:

1) Other company's hub is merged to Houston

2) Continental's hub is merged elsewhere

3) Each of the existing hubs are complimentary, and each is maintained.

The same outcomes apply to the locations of corporate headquarters, but I'd argue that the fact that we have a hub is of far greater consequence to the region. This is not a matter of suburban offices vs. downtown offices.

[Houston1stWordOnTheMoon]

As merger talk roils airline industry, Houston airport system must buckle financial seat belts, push for best outcome

Houston Chronicle

November 27, 2006

Houston aviation officials say the city's position as a major aviation hub is not threatened as speculation continues to mount about possible marriages, shotgun and otherwise, between the nation's major air carriers.

Having pumped billions of dollars into improvements at Bush Intercontinental Airport and in-town sister Hobby, they believe the city would keep its top tier status no matter what happens, largely due to its superior aviation facilities and strategic location.

[Edited by Editor. Please do not post entire articles on HAIF. It is a violation of copyright law.]

[Subdude]

I think IAH would remain a hub even after a merger. The strong Latin American route network would be hard to replicate. Continental is (for an airline) financially strong, so with luck, it would be the acquirer in any merger, so the headquarters and jobs would stay here too.

[Houston1stWordOnTheMoon]

I think IAH would remain a hub even after a merger. The strong Latin American route network would be hard to replicate. Continental is (for an airline) financially strong, so with luck, it would be the acquirer in any merger, so the headquarters and jobs would stay here too.

The high amount of business travelers Continental gets here is most attractive to them and any other airline. If they would leave i have no doubts another carrier will move in to fill the void. In a situation in which Continental is the buyer, they will remain right here.

[Houston1stWordOnTheMoon]

Fewer plane changes

For local business travelers, having a hub airport means nonstop service to many other domestic and international cities.

The hub service makes the city compelling to businesses whose executives or employees travel often.

Continental averages 798 departures on weekdays from Houston.

http://chron.com/disp/story.mpl/front/4374181.html

I didnt realize Continental had so many daily departures from Houston.

[KinkaidAlum]

The Chronicle is a horrible paper.

This article fails to mention all of the likely reasons that these mega airline mergers will not go through. This is all wild speculation on what MIGHT happen is US Airways goes through with their takeover of Delta.

Historically, the government has blocked mergers of similar scale in the recent past (United and US Airways) and Delta does not want to be taken over. They want to emerge from bankruptcy as an independent carrier.

Oh well, sensationalism and fear tend to sell papers.

[SunKing]

I work for Continental. IF a merger were to occur (and that's a BIG IF)...Houston would certainly remain as a major hub. The big talk right now is a United (2nd largest US airline) and Continetal (4th largest) merger - which would result in the largest US airline (and in the top 10 world-wide). Of course, the Houston Chronicle got it all wrong as United COULD NOT aquire Continental without NorthWest Airline's approval. See, Northwest holds a 'golden share' in Continental that basically prevents any other airline from aquiring us. However, that doesn't prevent us from aquiring United or another airline.

Continental has gone on record as saying we would prefer to remain independant - but will merge if market forces dictate that action. So, for example if US Air and Delta merge, there would be more incentive for us to merge in order to stay competitive.

But like I said, even if Continental did merge with United, the Houston hub would stay. The reason United and Continental make such a good pair is that we don't have much overlap in our routes - they compliment each other. Other airline mergers have more overlapping routes, which makes for a worse 'fit'. A United/Continental merger, in all probability, would result in very little changes to the hubs or routes - the big question IMHO, is where the corporate headquarters would be located. Personally, I'm not too keen on moving to Chicago.

[WesternGulf]

I am not feeling this merger either. I am sure both sides, Houston and Chicago, are looking at this. Yeah I know Houston has a hell of a more diversified economy than it had in the 80's, but I don't like the sign of anyone tampering or watering down the presence of Continental in Houston.

Edited December 14, 2006 by WesternGulf

[Pumapayam]

Continental has gone on record as saying we would prefer to remain independant - but will merge if market forces dictate that action. So, for example if US Air and Delta merge, there would be more incentive for us to merge in order to stay competitive.

And as the media reported back, which I agree too, is that the competition that drives ticket sales would drive prices up, since there would be less choices.

I for one, hope they stay independent.

[editor]

In the event of a United-Continental merger, I'd say that Cleveland is the city that should worry.

Continental's hubs are Houston, Cleveland, Neward.

United's hubs are Chicago, Denver, San Francisco (?)

Seems to me that Cleveland could easily be replaced by Chicago in terms of geography and capacity.

[jmancuso]

united is a mediocre airline where as continental is pretty decent...i am hoping continental absorbs united.

[MiDTOWNeR]

See, Northwest holds a 'golden share' in Continental that basically prevents any other airline from aquiring us. However, that doesn't prevent us from aquiring United or another airline.

The "golden share" could very easily be bought in order to facilitate another airline purchasing Continental.

Delta will most likely be seeking larger bids than the one offered up by USAirways (aka America West). Perhaps United will put in an offer for Delta. There would be little overlap in a combined Delta/United network....just like the case with a Continental/United merger.