Chicago – The head of United Airlines parent UAL Corp. said Tuesday that consolidation in the industry is overdue but remained silent on whether his company is pursuing a merger with another U.S. carrier.
UAL Chairman and CEO Glenn Tilton told analysts and investors that the company will take advantage of consolidation opportunities on merits, otherwise declining to comment specifically on one of the industry’s hottest topics.
Speculation that UAL might make a bid for Continental Airlines Inc. or Delta Air Lines Inc. proliferated last month after Tempe, Ariz.-based US Airways Group Inc. made an unsolicited offer for Delta. Analysts said the US Airways offer could touch off a long-expected round of consolidation among U.S. network carriers.
United’s stock jumped Monday following an analyst’s report suggesting that UAL could unveil a specific plan in conjunction with its first Investor Day in years, with about 75 analysts and investors gathering at a Chicago hotel to hear several hours of scheduled financial presentations Tuesday.
But Tilton doused the speculation in his opening remarks, delivering a familiar pitch on behalf of consolidation but without tipping his hand on the strategy of the Elk Grove Village, Ill.-based company.
“We think it (consolidation) is good and overdue for the industry, despite the fact that we acknowledge its difficulties,” he said in remarks broadcast on the Internet.
“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 that we are going to be attentive to opportunities as they present themselves, and on your behalf we will take advantage of one when we think it is to your benefit,” Tilton said.
United is considering selling tickets that would offer customers a bare minimum for air transportation that would not include in the price the ability to check bags, get frequent fliers and assigned seats. The “bare fare concept” would feature a basic promotional fare and the option to buy seat assignements, the ability to check bags and get a frequent flier mile credit.
United’s senior vice president of planning Greg Taylor said United thinks such a concept has “a lot of potential going forwrard” during United’s investor day presentations today.
United is also considering selling fare flexibility for customers that want to buy the right to change their ticket. The compay’s other ideas that Taylor said have some potential include selling a “premier for a day” for ordinary customers to pay for one day of benefits that certain elite customers get, and a one-day Red Carpet Club pass.
United has a hub in Denver.
After rising 3.7 percent in speculative buying a day earlier, United shares fell $1.85, or 4.2 percent, to $42.68 in morning trading on the Nasdaq Stock Market.
On the Net: www.united.com
Denver Post Staff Writer Kelly Yamanouchi contributed to this report
