Looks like CAL won't be Merging

[SoCalAprch]

Continental Airlines Chooses Not To Merge

HOUSTON, April 27, 2008 – Continental Airlines (NYSE: CAL) released the following message to its more than 45,000 employees from Larry Kellner, Chairman and Chief Executive Officer, and Jeff Smisek, President.

Dear Co-worker,

We want you to know that our Board of Directors met today and has unanimously supported management’s recommendation that, in the current industry environment, the best course for Continental is to not merge with another airline at this time.

Our recommendation, and the Board’s careful and considered decision, followed a comprehensive review of our strategic alternatives, assisted by our senior officers and advised by Continental’s outside financial and legal advisors. The Board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental’s prospects on a standalone basis.

We have significant cultural, operational and financial strengths compared to the rest of the industry, and we want to protect and enhance those strengths -- which we believe would be placed at risk in a merger with another carrier in today’s environment. We will, however, continue to review potential alliances and our membership in SkyTeam. We are considering alternatives to SkyTeam as we carefully evaluate which major global alliance will be best for Continental over the long term.

While some would prefer to see Continental pursue a merger, we strongly believe we have made the right decision – one that is in the best interests of our stockholders, co-workers, customers and the communities we serve.

Every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar. In today’s harsh environment, we must continue to adjust our business model to ensure we successfully navigate through these difficult times, so that in the future we can once again grow and prosper. As we take actions, we will communicate them to you as soon as possible. In the meantime, we must all continue to concentrate on what we do so well: delivering clean, safe and reliable air transportation every day.

Even in these tough times, we have great strengths. We have an enviable position in the New York market, a powerful hub in Houston, and hubs in Cleveland and Guam. We have a solid trans-Atlantic route network, which has recently been enhanced by our access to London Heathrow. We also have a great Latin American network and a growing portfolio of routes to India and Asia. We fly the youngest, most fuel-efficient fleet and have the best new aircraft order book among the major network carriers.

Most importantly, we have our Working Together culture, and we will ensure it remains intact. We’ve achieved our industry-leading customer service reputation because of you – our co-workers. We will all work together to get through these tough times.

We are both proud to be on your team.

http://www.co-industryconsolidation....s/pr042708.php
Discuss...

[Maximillian_Jenius]

Neva say die!

Richard Anderson

"I did not take the helm at Delta to facilitate a Delta merger."


*Paraphrased, but ya get the point!

[PCL_128]

Nah, I think UAL/CAL is done. The real merger will be UAL/LCC. Doogie is coming for UAL. Get ready to watch uSAPa get crushed by UAL-ALPA. I for one will enjoy the show.

[SoCalAprch]

Who would be doing the buying in a UAL/USAir merge?

[meyers9163]

Originally Posted by PCL_128

Nah, I think UAL/CAL is done. The real merger will be UAL/LCC. Doogie is coming for UAL. Get ready to watch uSAPa get crushed by UAL-ALPA. I for one will enjoy the show.

Wouldnt watching the USAPA guys get crushed mean you are hoping to see these guys and their union fall? I for one do not wish the airways guys any illwill. In addition not all those guys voted for USAPA.... We all know there are good and bad guys at USAPA as there are at ALPA.... I dunno.... Personally if it were to happen hey fine... we'll see what happens... But it'd be an interesting time. I mean who buys who is the first question.... and you never know... Perhaps the UAL guys could get a 50/50 split and therefore USAPA wins? Wouldnt that be a kick in the rear...

[PCL_128]

Originally Posted by SoCalAprch

Who would be doing the buying in a UAL/USAir merge?

In these sorts of mergers, it's always hard to define a "buyer." Most of the mergers of this size are financed by outside investors (usually the huge banks like Chase Manhattan and B of A) and the new combined company takes on the new debt.

Originally Posted by meyers9163

Wouldnt watching the USAPA guys get crushed mean you are hoping to see these guys and their union fall?

Yes. USAPA isn't a real union. It's simply a tool that the East is using to rape the West. The quicker it falls, the better.

[Velocipede]

Agree. First order of business UAL/LCC: Representation election. uSAPa relegated to the dustbin of Union history and becomes a trivia question.

[calcapt]

Getting drug into merger mayhem would be painful for all parties. I applaud our management for making what had to be a difficult decision.

I think a UAL / USAirways merger will demonstrate to us all how ugly these things can get.

[Maximillian_Jenius]

Originally Posted by calcapt

Getting drug into merger mayhem would be painful for all parties. I applaud our management for making what had to be a difficult decision.

I think a UAL / USAirways merger will demonstrate to us all how ugly these things can get.

I could be wrong. But, I think they're wanting another dance partner.

If DAL/NWA, UAL/AAA merger AA & CAL have to merger just to compete, and stay alive.

So, maybe a AA+CAL merger is in the wind. At the least, AA & CAL starting a partnership agreement.

[EDUC8-or]

Originally Posted by calcapt

I think a UAL / USAirways merger will demonstrate to us all how ugly these things can get.

America West/US Airways is STILL ugly and the merger was how long ago? If the 2 companies do merge it's going to be a mess.

[Velocipede]

Or CAL could be looking to ACQUIRE. Someone like Air Tran or Alaska. Either would be complimentary for their system.

[PCL_128]

Originally Posted by Maximillian_Jenius

I could be wrong. But, I think they're wanting another dance partner.

If DAL/NWA, UAL/AAA merger AA & CAL have to merger just to compete, and stay alive.

So, maybe a AA+CAL merger is in the wind. At the least, AA & CAL starting a partnership agreement.

I don't think so. I think they'll just start an "alliance." For one thing, the combination of AMR and CAL would just be too massive even for the Shrub DOJ to approve it. But I don't think CAL would be interested, anyway. It seems that Kellner and the board believe that they're ok on their own, and I think they're right.

I expect an announcement of some sort of partnership agreement between AMR and CAL within the next month or so. And I've been getting this gut feeling lately that AMR will be coming after AirTran. AMR has a history of gobbling up LCCs to reduce competition, and they're probably eager to put a dent in the "new" Delta's armor. A significant presence in ATL could be something they are interested in.

[kellwolf]

CAL and AAL would OWN South America and the Carribean if they merged. Not to mention the state of TX. Personally, I agree with Velo. If CAL's going to do anything, they're probably gonna snap up a smaller carrier like Alaska or AirTran.

And yeah, if US Airways/UAL goes through, it's gonna be a friggin bloodbath when it comes to integration. At the end of the line, they're either gonna be the strongest airline in the free world or cease to exist. I don't see any inbetween.