Continental Air to Shun Mergers, Remain Independent (Update1)

[Nutmegger]

Source: Bloomberg

April 27 (Bloomberg) -- Continental Airlines Inc., the fourth-largest U.S. carrier, has decided against merging with another airline and to remain independent.

Continental disclosed the decision by its board in a letter today to employees of the Houston-based airline. The board unanimously approved a recommendation by Continental's executives following a ``comprehensive'' review that included outside financial and legal advisers, the letter said.

U.S. carriers are feeling more pressure to merge as they face further financial losses, continued high fuel prices and slowing demand. Delta Air Lines Inc. announced this month that it would acquire Northwest Airlines Corp. Continental earlier had merger talks with UAL Corp.'s United Airlines.

``The risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis,'' Chief Executive Officer Larry Kellner said in the letter. ``While some would prefer to see Continental pursue a merger, we strongly believe we have made the right decision.''

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aK7mFLTLJh3g&refer=home

[babylonsister]

1. Thank you for this!

My DH works there, and we've been sweating the outcome of comprehensive talks.
The prospect of moving to Chicago and dealing with the winters wasn't sitting well.

[dysfunctional press]

4. if they merged with ual, could the houston hub have possibly stayed?

United has some of the worst hub-cities, weather-wise, especially winter-weatherwise. i would think that if they did a merger and could gain a nice warm-weather hub, they'd try to keep it going.

[liberal N proud]

2. If reports are correct, Continental is one of the only airlines

that is still in the black.

I was reading their magazine on a flight tonight and despite the fuel costs, they have done a good job on cutting where they could and buying newer more fuel efficient planes.

But that is the story they are telling. Hope it is true, I prefer Continental over other domestic carriers.

[Angleae]

3. Their profits are hit and miss

Currently miss

http://www.continental.com/web/en-us/apps/vendors/default.aspx?i=http%3A%2F%2Fphx%2Ecorporate%2Dir%2Enet%2Fphoenix%2Ezhtml%3Fc%3D85779%26p%3Dirol%2DnewsArticle%26ID%3D1131326