Speculation Points to United-Continental Merger

United Airlines is not commenting on published reports that it is considering merger discussions with Continental. Combined, the carriers would become the nation's biggest airline. Speculation about a possible merger drove stock in both companies up, and down, on Tuesday.

Copyright © 2006 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, host:

We start with a few business stories we're following this morning.

(Soundbite of music)

United and Continental are not commenting on reports that the two airlines are in merger negotiations.

NPR's Jessica Smith has more.

JESSICA SMITH: Merger talks are going on among many airlines, and could lead to a consolidation wave not seen since the 1990s. David Field is U.S. editor for Airline Business Magazine.

Mr. DAVID FIELD (Editor, Airline Business Magazine): Basically, it's been a game of - not of musical chairs. It's been a game of who's going to dance with whom? The United Continental rumor - and I have to stress it's still a rumor - it's a little bit of a stretch in that Continental - of all the big U.S. airlines - doesn't want to merge, has the least reason to merge, has the most reason it want to stay independent. It makes money. It doesn't need to merge.

SMITH: Other analysts say industry consolidation is necessary to recoup losses since 9/11 and to compete with low-cost carriers. A United/Continental pair-up would still need shareholders and regulators approval. If the two were to combine, they would surpass American airlines and become the biggest carrier in the nation. Field says the move would likely not be good for consumers, as the number of flights and seats would fall and ticket prices would likely rise. Reports of United and Continental negotiating come four weeks after U.S. Airways made a hostile bid for Delta.

Jessica Smith, NPR News.

Copyright © 2006 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.