Continental Redeems Golden Share, considers leaving SkyTeam

[Truckdriver]

Just having fun but what about this, United and US Airways merge. Then Continental, Alaska and AirTran merge. Would that be big enough? Looking at all these different scenarios, thought I'd throw out another one. Heck....I don't know what is going to happen!

Right now it would be a very poor move to merge with a domestic only airline. What CAL is looking for is international routes with the associated widebodies. Tacking on more low yield domestic flights would only hurt CAL at this time. Now down the road, I think these mega-airlines are going to need to stregthen their domestic operations to feed the international stuff. Right now they just need the cash generating international routes and the pricing power of having less big players. When they start making billions per year, then they can work on some of the smaller domestic operations.

 

[Mr.B]

If I were a betting man... I think they will join Star Alliance when they merge with UAL and the 2 of them will get anti-trust immunity with Lufthansa.

I'll second that bet. Done deal.

 

[Truckdriver]

If I were a betting man... I think they will join Star Alliance when they merge with UAL and the 2 of them will get anti-trust immunity with Lufthansa.

Something to think about is the Lufthansy investment in JetBlue. I kinda think whoever ends up with UAL will also end up with JetBlue. CAL/UAL/JBLU would be a hard sell to the DOJ with EWR and JFK. UAIR/UAL/JBLU might be easier and the seniority integration wouldn't be as difficult with the new USAPA representation and no representation at JBLU. Everyone was excpecting the DAL/NWA deal, but I kinda think the next one will surprise us.

 

[RJAA]

LH's JBLU investment is probably just to keep Delta's hands off of JBLU to protect a goldmine NYC market for its future partner. Because LH knows it needs a strong North Atlantic partner (whoever that may be) more than ever in the wake of AF/KL/NW/DL.

 

[Truckdriver]

LH's JBLU investment is probably just to keep Delta's hands off of JBLU to protect a goldmine NYC market for its future partner. Because LH knows it needs a strong North Atlantic partner (whoever that may be) more than ever in the wake of AF/KL/NW/DL.

You may be right. I did hear a Delta exec say that they were not interested in Jetblue because they did not want anymore domestic routes and almost all of Jetblue's routes overlap Delta routes. At one point they were considering it to remove competition and take control of JFK, but decided it would not be worth the investment. It would have added no value to Delta other than increase pricing power. I think UAIR is going to make a play for someone else, and I think the likely target will be UAL. With JetBlue having control of the domestic market out of JFK, I think that whoever ends up with UAL may also make a play for JetBlue. I guess we'll see.

 

[Flopgut]

They'll get it as soon as their check clears...

How about we give you one of our old 30 series 9s and we call it even? There's no gas it, sorry.

 

[Marko Ramius]

Something to think about is the Lufthansy investment in JetBlue. I kinda think whoever ends up with UAL will also end up with JetBlue. CAL/UAL/JBLU would be a hard sell to the DOJ with EWR and JFK. UAIR/UAL/JBLU might be easier and the seniority integration wouldn't be as difficult with the new USAPA representation and no representation at JBLU. Everyone was excpecting the DAL/NWA deal, but I kinda think the next one will surprise us.

This could turn out to be a very well played move by UA/LH and the 'DeathStar'. JBLU fits better with UAL than any other airline(NO employee personal feelings aren't considered here!). UA is small in the NY and BOS area outside of it's UsAirways codeshare, and beyond the obvious fleet match, United has proven to be the most committed of the network majors to the airline within an airline branding concept. Shuttle by United continued after the imitators went away and basically morphed itself into TED which still stands long after Song has gone away. JetBlue's inflight product seems like an obvious improvement to the TED product/concept at minimal cost.

However, to make an acquisition/merger ahead of industry consolidation would be shortsighted because of DOJ concerns. Letting LH get their hands in JetBlue's pockets to keep them out of play may turn out to be brilliant and may setup the weakest of the 'big three' in the NYC area to be the biggest. They could let JetBlue stay separate like DAL/NWA is doing with Midex and reap the codeshare revenue, secure in the knowledge that they will get first crack at the assets if they fail for some reason. Question is, does Star get greedy and try to keep UsAirways in as well if UA/CO merge? That would be quite an alliance, especially in the NY/BOS/DC areas if B6 gets included eventually....

 

[RJAA]

LH puts money into JBLU just so it keeps it going, and nothing more. Because if it falls apart, Delta would pick up the JFK slots and facilities for cheap and increase hub presence in JFK and overrun Continental in EWR. That cannot happen. LH is just playing its cards to preserve the future STAR presence in NYC.

 

[MJ42]

How about we give you one of our old 30 series 9s and we call it even? There's no gas it, sorry.

Only if it's not the one that landed gear up at IAH in '96!

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