United Airlines is talking to Continental Airlines about a merger, the New York Times reported Tuesday evening.
Citing unnamed people involved in the negotiations, the article said United is holding preliminary talks with Continental. Discussions are “far from complete” but picked up pace after US Airways’ bid to buy Delta last month, the newspaper reported, adding that United chief executive Glenn Tilton and Continental chief executive Larry Kellner have met to discuss a combination.
In addition, United has contacted Delta for merger talks, the Wall Street Journal reported, citing unnamed sources.
Evergreen-based aviation consultant Mike Boyd said he doesn’t think a United-Continental merger would have a major effect in Denver, where United has a hub, “because there is no overlap in Denver.”
But nationwide, he said, “mergers always end up with less employees.”
In comments earlier Tuesday, Tilton did not discuss any specific deal.
Consolidation “is good and overdue for the industry,” Tilton said. “With respect to our company itself and our options, we clearly are not in a position today to comment on anything specifically, other than to say we are going to be attentive to opportunities as they present themselves.”
Responding to a question about a possible leveraged buyout, Tilton said, “There is a tremendous amount of liquidity and a tremendous amount of cash in the general marketplace today, looking to be put to good use.”
Stuart Klaskin, a partner at KKC Aviation Consulting in Miami, speculated that United could be acquired by another airline or broken up, with a possible spinoff of discount operation Ted.
“I get the sense the management largely looks at their time now at United as kind of a stewardship thing … in an interim period until it consolidates with someone else,” Klaskin said.
US Airways and America West finalized their merger in September 2005.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or kyamanouchi@denverpost.com.
