United and Continental officialy merge

cnn.com says that United bought Continental for 3 billion dollars making it the largest airline in the world!!

It will be the United brand based at chicago

With the CO management team. Unlike the DL/NW merger, this one should result in an improvement in the product (at least on paper). Of course, it's not a done deal until the fat ladies at the U.S. Government Antitrust Department sing.

I'm not worry at all re the longhaul widebody inflight product stds of UA+CO post-merger. Both hv been progressing well in upgrading the cabins of their entire longhaul widebody fleets pre-merger. In particular, their latest premium cabin stds are not only similarly high but are truly among the best designs in the world today IMHO<Just to give U a flavor, I consider the best longhaul cabins fm LH Group,AFKLM Group and quite a few top Asian carriers are actually a bit inferior to the latest fm UA/CO>......I simply could not hv imagined this about any U.S. carriers 10yrs ago.

However, there could be real issues re inflight product+service level consistency between UA and CO shorthaul/domestic ops.

How do you think the European and Far Eastern airlines will react to this announcement ? Should it give them cause for concern or will they regard it as purely a matter for continental USA ?

There was talk some time ago about some EEC transport official talking to major European carriers about a mass merger of a number of European carriers under a United European Airlines banner to combat the threat as he saw it from the USA, Delta in particular, but as the various  National Carriers  within Europe still value their autonomy it came to nothing. We do have the AF/KL and BA/IB groups and also LH with their subsidiaries but I don't think at this time we will see a United European force. Any thoughts.

They should not care, at least in my opinion, US airlines are too introverted.

But those doing the paint jobs should be happy.

In Europe we had:
KL+AF (+AZ)
BA+IB
LH eating up all smaller airlines :)

Now in the US:
DL+NW
UA+CO

Who/what is next?

More details re UA+CO merger plan:
http://www.flightglobal.com/articles/2010/05/03/341417/united-and-continental-agree-stock-swap-merger.html

Some interesting stuff<i.e. Unusual for the U.S. airline industry> is happening here about branding of the new entity:
1) The new holding company will be registered as United Continental<a la AFKLM>. Previous M&As in the U.S. typically meant 1 of the 2 brands vanished completely fm any legal or mkting use.
2) Trading/Mkting name will be United and I assume IATA code will be UA as well meaning the CO code will disappear.
3) CO's current corp logos+livery schemes will remain or to be applied across the combined fleet of the new entity......this means for CO's current fleet, they'll just simply hv to replace <Continental> with <United> letterings on the fuselage.

As some believe CO enjoy perhaps a more successful mkt image than UA, the above seems like a perfect compromise. Even though the CO name will be pretty much gone fm the mkt, large visible elements of that brand will stay with us.

Compare with previous U.S. mergers such as DL+NW, the approaches announced so far for this one are very even-keel IMHO: Nearly equal amount of stuff/intangible assets fm each side get carry over to the new entity.

captain bill:
AFKLM started it all a bit earlier. Then LH became LH Group and very recently, we've IAG. For the foreseeable future, I fully expect these 3 independent giant-carrier groups will remain separate within EU. It's an econ zone big enough for 3 seriously large players to share domination. Most importantly, each is so big now that not only they can't credibly threaten each other, neither can any huge competitors fm outside EU to threaten them. If U checkout any top 10 airlines of the world list, U'll basically see these 3 groups are always there along with the top3 U.S. mega carriers.

Mrtnw:
Due to similar longterm mkt reasons, 3 independent giant-carrier groups are also emerging in the U.S...1st with DL, now with UA....neither was a really surprising outcome for most professional industry observers. Again, this is an econ zone big enough for 3 seriously large players to dominate. Logically, AA will be forced to act pretty soon. However, the tricky party is how will AA act? It's not that obvious any more like DL+NW or UA+CO. Look around the U.S. mkt today, there're no more <national-scale> network carrier left for merger except USAirways<Well, semi-national is probably more accurate due to USAir's very limited network size>. What remain are either regional players<i.e. RJ/Turboprop kingdoms>, niche specialists<e.g. HawaiianAir,AlaskaAir>, or LCCs<Merging completely diff biz models may yield disastrous result>.

If AA is heading for a merger, its target will be quite diff/smaller than what we've seen in the 2 previous giant mergers.....so perhaps AA+Alaska? AA is quite weak on the W.coast except LAX and a merger with Alaska, basically a W.coast specialist, will give them pretty much the entire W.coast corridor mkt all the way fm the Canadian to the Mexican border.

Very recently, I hv also been hearing moves by AA trying to work closer with JetBlue<No doubt a big LCC with excellent customer reputation> on the E.Coast. Could this also be a prelude to something more substantial? Possibly.

Interesting time ahead and I'll keep my eye on AA re what's the nex big industry merger.

A320 Monster:
Saying CO is being BOUGHT by UA is perhaps not exactly accurate. The deal is done through a stock swap and the nature of it is more like a equal-merger as opposed to an outright acquisition by 1 side. These 2 airlines will actually merge and form a new company registered and trade in the stock mkt as United Continental.

Here is the new United look!

http://2nd2none.com/united.html

I agree with FLX re AA potentially being interested in AS. AS would fill AA's major geographic void in the West Coast, Alaska and Hawaii, has fleet commonality with AA (AS is a major 738 operator), and has been one of the few consistently profitable U.S. carriers in recent years. I personally would be glad to see AS go, as they quickly went from being one of the best U.S. airlines to one of the worst in terms of service/inflight product. In fact, I've had so many bad experiences with AS and its feeder affiliate Horizon Air that it's the only U.S. airline I refuse to fly with.

The 1st major UA/CO casualty since their recent merger annoucement:

http://www.flightglobal.com/articles/2010/05/07/341723/continental-and-united-lose-in-haneda-slot-contest.html

To those here who are unfamiliar with the situation, intercon access to HND<Haneda airport> in downtown Tokyo is a HUGE deal for any airlines serving or want to serve Tokyo. HND is only 20mins away fm the Corp offices and financial districts via the Tokyo monorail or subway system. It's sort of like LCY for London....but imagine a LCY that is BIGGER than LHR, has been routinely handling 773/744-sized airliners and WITHOUT any night curfews.

I can't help but thinking that this route award decision of the U.S. DOT has got something to do with the UA+CO merger plan. U see, if the new gigantic UA holds access to HND, together with its well-managed Japanese StarA buddy NH<All Nippon>, they'll easily dominate the U.S.-Japan mkt by feeding directly fm the enormous Japan domestic air traffic already exist @ HND.

FLX; I believe U got it right, come and join our strategic team!

I agree, the UA/CO merger and the new UA/CO wanting to serve HND probably raises anti-trust red flags at the USDOT. As FLX points out, UA/CO/NH would create a near monopoly and unfair competition on the US-Japan market. Awarding HND slots to AA and DL (both of whom do not have a partnership with a Japanese airline as yet) makes sense from an antitrust standpoint. HA is a bit more perplexing as it is such a small airline and all of its traffic to/from HND would be limited to Japan-Hawaii as HNL is an impractical transit point for Japan-US flights.

Mabel:
I think that's how the DOT award decision re HND access stacks up:
DL:
Basically gains only the Tokyo OD traffic to/fm U.S. It doesn't and will continue not having any local SkyTeam partner to facilitate feeding to/fm Japan domestic traffic @ gigantic HND nor any DL airports in Japan.
AA:
Will somewhat benefit fm local OneWorld buddy JL re domestic traffic feed @ HND. However, JL's survival as an airlines is still an open question @ least in the near term....NH, on the other hand, appears as a much more solid and already slightly larger<May become significantly larger soon IMHO> local partner for UA+CO.
HA:
Has never been a player in the scheduled U.S.-Japan mkt yet Hawaii is the #1 U.S. destination for Japanese/Tokyo travellers. Therefore, awarding the islands' home carrier seems fair game and @ the same time promote Hawaii interisland connections to more Japanese due to HA's Honolulu hub....who knows, may even encourage some heading to Tier2 U.S. WCoast cities to fly HA by connecting @ HNL.......a more pleasant/relaxing hub than the chaotic LAX or the clinical SFO<Except its Int'l terminal>.

A couple of points....

1. Don't sell short the value of the HNL route to Hawaiian Airlines. Delta has TWO DAILY 747-400's on the HNL-NRT route, Both FULL with O&D traffic!

2. Delta's new LAX-HND route is the #1 Japan-USA route in traffic. It will be a winner too!

3. Delta's new Skyteam alliance with China-Eastern... who is now a larger airline than JAL. More Pacfic possibilities for sure. Additional focus on hub operations away from TYO. Look for more SEL and China operations.

4. CO can only help UA. The Pacfic route combinations will prove more valuable. The major problems the merger will encounter is UNIONS and corporate headquarters staffing/locations!! Maybe a bloodbath regarding personnel. And.. the US DOT will probably make them sell off routes/slots to  even the playing field  and bolster the LCCs presence.

5. No doubt friction will result on the future UA/CO Boeing & Airbus orders. The CO CEO will now be in charge.