Chicago is My Home

15
May

United Airlines Weighs Possible Merger, Alliance Options at Latest Meeting

Author: Adam Fendelman, Category: Travel

CHICAGO – UAL Corp.’s board of directors will meet on Thursday and industry insiders say there will be three options up for discussion: pursue a full-blown merger with US Airways, negotiate an alliance with Continental Airlines or continue to operate on its own.

Embattled with rising fuel prices and fierce competition, the airline industry has anticipated a United merger since Delta Air Lines and Northwest Airlines announced on April 15, 2008 that they would join together.

Led by CEO Glenn Tilton (a strong proponent for consolidation in the airline industry) United has courted various potential partners. Top on its list was said to be Continental, but the Houston-based carrier backed out of talks on April 27, 2008. United then turned to its less-compelling second choice – US Airways – and negotiations for a potential deal are ongoing.

In the hours leading up to Thursday’s board meeting, however, various news sources reported that United has not completely abandoned hope of creating some sort of operational relationship with Continental.

Citing unnamed and inside sources, Bloomberg and the Associated Press have reported that United may now try to form an alliance with Continental that would allow the two carriers to increase revenue without the headaches of a formal merger. An official decision is not expected to be made at Thursday’s board meeting.

By Megan O’Neil