CHICAGO — Four major U.S. carriers, including United Airlines, appear closer to completing deals that would radically remake the airline industry, say people close to the airlines.
Chicago-based United is in merger talks with Continental and is poised to seal its deal if Delta and Northwest combine first, sources say.
United is the largest carrier at Denver International Airport and has about 5,200 employees in Denver. Denver is United’s second-largest hub. United, including its United Express regional flights, has about 420 daily departures from DIA.
The deals could be announced in rapid succession as soon as this month, provided carriers can resolve a host of issues, including how to share the executive suite and offering concessions to labor.
The sequence in which events unfold is crucial to United’s chances of finally doing the megadeal that chief executive Glenn Tilton has long craved, experts say.
A Delta-Northwest merger would command about 28 percent of the domestic market, according to CreditSights Inc. Northwest also would forfeit a “golden share” in Continental that grants it veto power over a merger by the Houston-based carrier.
That would eliminate a significant obstacle to a tie-up between United and Continental, which would create the nation’s largest carrier, with 36 percent of the market.
United, the nation’s second-largest airline, and Continental, the fourth- largest, have discussed melding operations several times during the past decade and were close to an agreement a year ago, say people close to the airlines.
Those talks ultimately collapsed over sticky issues, such as who would run the merged carrier and where the headquarters would be based, sources say. Egos are less of a concern in the current negotiations, sources say, as Tilton appears more open to ceding power. And some leaders within United’s powerful labor unions privately say they would welcome the chance to work with Continental managers, known for fostering healthy employee relations.
Tilton reiterated to United employees Tuesday that the carrier would participate in a merger only “when the opportunity and the time is right for all of our stakeholders. No one will be making our decisions for us.”
Denver Post staff writer Kelly Yama nouchi contributed to this report.
36% Domestic airline market share of a merger between second-ranked United and fourth-ranked Continental
28% Domestic airline market share of a merger between third-ranked Delta and fifth-ranked Northwest
1 U.S. rank of a United-Continental union, supplanting American as the top carrier
