New Leadership At Continental May Lead To Possible Merger

With the recently-announced resignation of Continental CEO Larry Kellner, some are speculating that Continental and United may again look at merging when Jeff Smisek takes over the reins of Continental next year.

Kellner had resisted a merger with United, a move some say was his most important business decision. Reuters reports that the two airlines had been in merger talks, but concerns over the long-term health of United led Continental to break off negotiations in April of 2008. But the talks did lead to Continental joining the Star Alliance, in which United is also a partner.

Industry analysts continue to say Keller did the right thing by not merging with United. While Justin Buchman noted in Business Week that United would have given Continental access to Asian markets it does not currently serve as well as the western U.S., industry consultant Darryl Jenkins told the Associated Press that Continental has a "much better" product, and integration would have been difficult.

USA Today says other analysts see the a merger as at least a possibility. Hunter Keay, an analyst with Stifel Nicolaus, told the paper that while the new alliance between Continental and United means they are, in all reality, merging their networks over the next few months, any formal merger between the two would most likely be "years away."

FMI: www.ual.com, www.continental.com