UAL Head to Stay Until 2011 While Merger Rumors Swirl

United Airlines today extended the contract of its CEO, Glenn Tilton, until 2011, ending speculation about his departure (his previous contract expired next year).

Tilton joined United in September of 2002 and headed the airline during its long Chapter 11 bankruptcy process. But now that United's out of bankruptcy, Tilton is calling for 'more consolidation' in the industry - meaning mergers of some sort. "Deregulation has done its work," he told the Financial Times earlier this year. "It's time to recognise that we should compete on a grander scale. Should the opportunity present itself, we'll make sure we're in a position to take advantage."

Which airline would Tilton like to see United merge with? Most people think Continental, because the two airlines operate similar aircraft and don't generally fly the same types of routes. Continental has a strong Latin America and European presence and United's Asian route network is the best in the industry. Yet Continental's CEO, Larry Kellner, has repeatedly said that Continental wishes to remain independent.

Whether or not that happens we'll have to see, but I bet that two of the legacies will merge next year... probably a United/Continental combination


Anonymous said...

The failed policies of selling tickets at a loss to merely create cash flow in service of debt instead creating stock valuation from true profits will continue in the airline industry until a modest amount of regulation is applied to the the industry as a whole. Revenue creation is not the same as profit creation and until that reality is recognized the airlines over focus on cash flow and market share expansion will continue.