Leaked: US and UA in merger talks for over a month

[Elevation]

Anything can happen here. Last month it was reported in the LA Times that SW was kicking the tires at US. Today they report that they're not going to merge. I'm starting to think there is a good possibility of US being split up.. Also a good chance for that to happen to UA. One thing about Parker, he will do what ever it takes to become a part of the merger process and make a S*&t load of money for the stock holders. Hold on to your hats!

Do you even know what you're talking about? When's the last time you saw a company not in bk get split up when they have 3 billion in the bank? How would this be good for stock holders. why would the board approve it? Stop listening to the high school flunkies.

 

[FlightChic]

Article

Reuters
American Airlines in talks with Continental, US Air
Friday April 25, 7:43 pm ET
By Jui Chakravorty Das


NEW YORK (Reuters) - American Airlines (NYSE:AMR - News) has had early-stage merger talks with US Airways (NYSE:LCC - News) and is in advanced talks for an alliance with Continental Airlines (NYSE:CAL - News), sources briefed on the situation said on Friday.
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News of the talks comes after Delta Air Lines' (NYSEAL - News) and Northwest Airlines' (NYSE:NWA - News) announced nearly two weeks ago they planned to merge to become the world's largest airline, seeking to counter skyrocketing fuel prices, a weak economy and a growing competitive threat from European carriers as trade barriers fall on trans-Atlantic travel.

American Airlines' talks with Continental are focused on forming an alliance that could share passengers, much like the SkyTeam partnership that includes Air France-KLM (Paris:AIRF.PA - News), Alitalia (Milan:AZPIA.MI - News), Czech Airlines, Delta Air Lines (NYSEAL - News), and Northwest Airlines (NYSE:NWA - News), the people said.

Alliances have flourished in the industry because they generate profits through marketing programs and flight code-sharing without the headaches of combining operations.

But Continental is also in advanced talks with United Airlines (NasdaqGS:UAUA - News) for a full merger, the sources said. Continental will choose either the merger or the alliance, not both, sources said.

Meanwhile, United Airlines is also in serious merger talks with US Airways, and will choose to merge with either Continental or US Airways soon, the people said.

American's talks with US Airways were not serious at this point, one person said.

Aviation consultant Bob Mann said a US Airways-American Airlines merger would not be a marquee matchup and would give American, currently the largest U.S. carrier, little extra depth overseas.

"It doesn't match Northwest-Delta and it would not match the global presence of a Continental-United, if that were going to happen," Mann said. "But I think if Delta-Northwest does happen and Continental (and United) does happen, about the only thing left on the board is US Airways."

All of the airlines declined to comment.

MEGA-MERGER?

Continental, which has said it would prefer to remain independent unless the competitive landscape changes, had laid most of the groundwork for a merger with United even before Delta and Northwest announced their deal, the sources said.

Under the terms being negotiated, Continental Chief Executive Larry Kellner would be CEO of the combined airline and UAL CEO Glenn Tilton could be chairman, the people said. Other details are still being negotiated in what would be another all-stock deal.

Combining United with Continental would create a company with a combined $35 billion in revenue and nearly 100,000 employees, surpassing the Delta-Northwest combination.

But that merger may not happen. United Airlines, whose shares plunged 40 percent when it reported a quarterly loss earlier this week, is also talking to US Airways.

Analysts have said a merger of United and US Airways would be less complex than a United/Continental combination.

JP Morgan analyst Jamie Baker said earlier this week a deal between United and US Airways could be easier when it comes to aligning pilot pay, combining fleets and cutting flights and seats.

Baker also said the merger would be easier because United and US Airways already have code-share agreements and are part of the Star Alliance.

"United was interested in America West in 1998, US Air in 2000. Today, both are available under one roof," Baker said. America West and US Airways merged in 2005.

REGULATORY APPROVAL

After racking up $35 billion in losses and finally emerging from a 5-year slump in 2006, U.S. airlines are hoping mergers could give them greater market power to reduce flights and raise fares.

The airlines also face a renewed sense of urgency to cut costs as jet fuel prices have more than doubled since the start of last year.

The carriers will be forced to make decisions in the coming weeks as they would like to have any mergers approved under the administration of President George W. Bush, which is considered more merger-friendly but ends in January.

All talks have been ongoing since January this year, after people heard that talks between Delta and Northwest had become serious. Delta and Northwest announced their merger April 14 in an all-stock deal then valued at just above $3 billion.

The Justice Department has said it would, if necessary, weigh multiple merger proposals in the airline industry and try to complete any reviews before the Bush administration leaves office.

While there is broad industry belief that the Northwest/Delta combination stands a good chance of being approved, some competition experts believe a follow-on deal could face a tougher challenge due to a further narrowing of competition that could lead to higher fares and fewer choices for travelers.

(Additional reporting by John Crawley in Washington; Editing by Richard Chang and Tim Dobbyn)

 

[Ignacio]

Edit; Nevermind. Misconception on my behalf.

 

[US1YFARE]

Well according to the NY Times, CO/UA may announce next Thursday.

http://www.nytimes.com/2008/04/26/business...agewanted=print

 

[Harry Callahan]

Getting more interesting by the minute.

 

[UAL_TECH]

Great...
We all deserve each other.
We hate our unions, hate our management, and hate each other.
We have been demoralized, and abused. :down:
We are ‘ALL’ a bunch of disenfranchised employees that a merger will make it right as we implode. :blink:

Yea, I see a winner here!!! :down:

 

[AIRBORN1]

Great...
We all deserve each other.
We hate our unions, hate our management, and hate each other.
We have been demoralized, and abused. :down:
We are ‘ALL’ a bunch of disenfranchised employees that a merger will make it right as we implode. :blink:

Yea, I see a winner here!!! :down:

I will be so happy when next friday comes and the CAL-UAL merge is done with... I waited all day todaytoo hear this USair SPECIAL announcement and didn't see shi*t..
waste of time..... As stated last week first week of May UAL will make the decision with CAL. Nobody want's USAIR. Not saying we have better management but you guys have a mountain to deal with already with America West and the only way to correct this problem would be to undo the merge and
sell usair off alone. sorry guys.... USAIR is a disaster........ it's very sad... I remember the days USAIR was on top of the world.

 

[StewGuy86]

sell usair off alone. sorry guys.... USAIR is a disaster........ it's very sad... I remember the days USAIR was on top of the world.

Um just when the heck was THAT?? While it's certainly worse now than it was prior to the AWA merger, I don't ever remember it being on top of the world exactly....and I was an employee!!

 

[Ignacio]

sell usair off alone. sorry guys.... USAIR is a disaster........ it's very sad... I remember the days USAIR was on top of the world.

Why not sell off United? US Airways offers nothing in terms of International destinations... But did not lose anywhere near the amount United has. Obviously United is doing somthing very wrong.

Like their is any American based airline on top of the world?

 

[InternationalShannon]

I agree , UAL put us out of your misery and just tell us who you're getting in the sack with so we can continue the east vs west pissing match

 

[TheLarkAscending]

Why did US Airways place the Webcast link onto the US Airways employee website tonight?

Regards,

USA320Pilot

Sigh......it was probably placed there as a test as preparation for the presupposed actual announcement date, time and event. No, I don't have any idea what, when, where or how that announcement is or where it will be made and I'm comfortable in my own skin knowing no more than anyone else, and extremely secure in saying so.

 

[Elevation]

This thread is missing only one thing...RalphCramden.

 

[RowUnderDCA]

I don't think that execs know what they should do: combine for market reach (UA and CO are perfect), or the new fad, merge to eliminate capacity: US and anybody but NW.

 

[PhillyFlyGuy]

The new Fall Line up


Kinda sounds like we are the UGLY girl at the dance with some good assets but a UGLY face :unsure:

 

[etops1]

it's funny how they have a pic of blair underwood and heather locklear when they were in that show LAX.