CAL Talks Merger with AMR

[Furloughed80]

Continental also held talks with American
By Justin Baer in New York
Friday Feb 15 2008 14:30
Continental Airlines (NYSE:CAL) , the US carrier that has had merger discussions with United Airlines, also has held talks with another rival, AMR (NYSE:AMR) , parent of American Airlines.
A person familiar with the matter described Continental's talks with AMR as preliminary, and said the airline was not close to an agreement with United.
Continental and AMR spokesmen both declined comment.
Record fuel costs and an expected slump in demand for air travel have driven many of the biggest US carriers to consider merging with a rival. Delta Air Lines is nearing an agreement with Northwest Airlines, people famliar with the negotiations say. The deal is expected to touch off a wave of consolidation within the industry, as carriers seek to lower costs and extend their service networks.
American has been largely left out of many of the consolidation scenarios pondered by industry executives, bankers and investors. The conventional wisdom was that American's status as the world's largest airline made any proposed deal a tough sell to antitrust regulators.
American and its pilots also appear far from an agreement on a new contract. A testy relationship with organised labour may make it impossible to secure support for a major merger, and leaders of the pilots union have already said they would be against such a move.
Nevertheless, some industry insiders were never convinced that American, feared by its peers in the years that followed deregulation in 1978 as the most aggressive and, at times, most ruthless competitor, would stand idle as its four biggest competitors merged around them.
Continental and Chicago-based United had held talks a year ago, after US Airways had launched a hostile bid for Delta, then still in bankruptcy. While Delta did fend off that bid to emerge from credit protection as an independent company, Continental and United executives kept in touch on a potential tie-up, the people said.
As Delta's talks with Northwest turned more serious, Continental and United's also gained steam.

 

[General Lee]

Headquarters in IAH or DFW? Both have a large presence in NYC (CAL in EWR and AA in JFK with that new terminal). That would be an interesting mix.

Bye Bye--General Lee

 

[Furloughed80]

This may have more to do with what assets a combined CAL/UAL would be giving up to AMR. I don't see how this merger would get past the DOJ.

 

[LJDRVR]

I'd much rather see CAL on it's own. If we do have to merge with somebody, I'd much rather see us with a company like AMR, where the folks in charge are reasonably competnet executives and not M&A con-artists who couldn't run a large organization well if you held a gun to their head.

I remember listening to somebody in management once who said when Delta or United make an unusual business decision, they're ignored. When AMR does something out of the ordinary, we send folks to DFW on the next jet to find out what's going on.

 

[General Lee]

I'd much rather see CAL on it's own. If we do have to merge with somebody, I'd much rather see us with a company like AMR, where the folks in charge are reasonably competnet executives and not M&A con-artists who couldn't run a large organization well if you held a gun to their head.

I remember listening to somebody in management once who said when Delta or United make an unusual business decision, they're ignored. When AMR does something out of the ordinary, we send folks to DFW on the next jet to find out what's going on.

We all know AMR management types are rewarded generously for their hard efforts--in the tune of $200 million. Look how happy the AA employees are. Wow, they just love each other over there. Where have you been?

Bye Bye--General Lee

 

[flatspin7]

I'd much rather see CAL on it's own. If we do have to merge with somebody, I'd much rather see us with a company like AMR, where the folks in charge are reasonably competnet executives and not M&A con-artists who couldn't run a large organization well if you held a gun to their head.

I remember listening to somebody in management once who said when Delta or United make an unusual business decision, they're ignored. When AMR does something out of the ordinary, we send folks to DFW on the next jet to find out what's going on.

I honestly disagree.. AMR would be the worst match for CAL... the route maps are very similar in TX and NY/NJ there would be massive job loses and AMR doesnt have the best track record when it comes to mergers...At least with UAL 2 + 2 might come close to equaling 4 opposed to AMR where 2 + 2 will equal just a little more than 2

 

[Palomino]

APA vs. CALALPA? Yikes.

I'd be on the street for a decade.

 

[johnsonrod]

UAL is like the ugly chick at the prom - nobody wants to dance with her...

 

[aa73]

... and AMR is the prom bully, everyone (tries) to stay away.

At least any future merger is in the hands of an arbitrator, thanks to the new law. As it should be.

73

 

[Habib]

CAL+UAL Is it possible to have that many SCABS on ONE list, sound like a bullet-proof group, oh wait.

 

[Yuppyguppy]

it'll happen if DAL/NWA happens

 

[Andy]

UAL is like the ugly chick at the prom - nobody wants to dance with her...

Geez, I hope so. I've got no desire to go through a merger. They do not benefit the rank and file employee.

 

[dollacrackho]

this is the airline apocalypse. every legacy airline is trying to merge right now. where is the bottom to this cycle. what if dal/nwa and continental/united happen? huge reduction in capacity every flight is 98% full then a couple years down the road hmm we're not making enough money we need to merge dal/nwa and continental/united oh and why not throw in us air and american. now there is one enormous us airline which still can't make enough money and there are 6 pilot groups trying to integrate and no one can decide who took over who and who should get stapled. then microsoft buys the whole thing and designs a computer program to eliminate pilots altogether. this whole thing is nauseating someone needs to put this industry out of its misery.

 

[flygirlqt]

I am surprised that no one has brought up the potential that if one of these mega carriers would fail, it would leave a huge vacuum of unemployment, service and lift.

Habib, I was flying with an old cal scab (actually he was a crawlback) who said something that made me think.

"I am a scab, but I am also figured out what alpa was truly all about 25 years before people today are realizing
what they represent".

That led into a fairly interesting and heated conversation and reflection of alpa transgressions onto their own membership which are undeniable. I don't agree with his decision to cross a picket line and said so. His reply?

"It is hard to honor a union that doesn't honor it's own commitments and value it's own membership"

P.S. REZ, yes alpa national salaries did come into the discussion.

 

[AAflyer]

I am surprised that no one has brought up the potential that if one of these mega carriers would fail, it would leave a huge vacuum of unemployment, service and lift.

Habib, I was flying with an old cal scab (actually he was a crawlback) who said something that made me think.

"I am a scab, but I am also figured out what alpa was truly all about 25 years before people today are realizing
what they represent".

That led into a fairly interesting and heated conversation and reflection of alpa transgressions onto their own membership which are undeniable. I don't agree with his decision to cross a picket line and said so. His reply?

"It is hard to honor a union that doesn't honor it's own commitments and value it's own membership"

P.S. REZ, yes alpa national salaries did come into the discussion.

Just rationalizing his mistakes in life. He could dislike ALPA, or APA IPA NPA etc. He could make valid arguments for how unionism has failed, or how these entities have become political money making machines.

He could quit, and vow never to join a union again. He could win that conversation he had with you on the evils of ALPA...... However non of it will ever make it acceptable for him to ******************** over his fellow pilots by crossing a picket line.


AAflyer