United’s chief executive reiterated his support for consolidation, and Continental said it is considering its strategic alternatives Tuesday as speculation mounted that the two carriers would join up in the wake of the merger of Delta Air Lines and Northwest Airlines.
United CEO Glenn Tilton said in a message to employees that “the economic realities of today’s marketplace make the case for consolidation more compelling than ever.”
“As the industry evolves, we will take the actions we need to strengthen our global competitiveness, and we will participate in consolidation when and if it is the right choice and provides the right benefits for employees, customers and shareholders,” Tilton said.
Continental CEO Larry Kellner and president Jeff Smisek said in a message to employees Tuesday that the Delta-Northwest merger “will change the competitive landscape for Continental and the entire airline industry.”
But the pilots unions at United and Continental on Tuesday voiced resistance to a merger, saying, “Our concerns will be addressed before we ever agree to allow our airlines to merge.”
Other unions at United echoed the sentiment.
The Delta-Northwest merger and talk of a potential United-Continental combination come as U.S. airlines try to improve their competitive standing internationally.
The route networks of United and Continental have limited overlap, including out of Denver. United flies to 112 cities from Denver, while Continental flies to Cleveland, Houston and Newark, N.J., from Denver.
A United-Continental merger might mean more connectivity for passengers flying out of Denver, airline-industry observers said. For example, a passenger could fly from Denver to a Continental hub and connect to international routes that aren’t currently available from United.
But a United-Continental deal could also eventually mean a cutback in flights out of Denver from a combined carrier.
“The hope for consolidation is partially to withdraw capacity,” airline consultant Darryl Jenkins said. “So at a certain point … I do think airlines will start pulling back capacity.”
Denver International Airport spokesman Jeff Green said airport management has considered a number of merger scenarios as it looks toward future growth.
“You can forecast, but until we know what the facts are, you can’t real ly say for sure,” Green said.
Kelly Yamanouchi: 303-954-1488 or kyamanouchi@denverpost.com
