Many travelers are concerned whether cheap airplane tickets and cheap vacation packages may be in short supply as a result of a proposed merger between United and Continental Airlines. Apparently their negotiations are heating up, with Continental Airlines directors meeting Wednesday, 4/28, to discuss a possible combination with United.
Such a merger would create the worlds largest airline based on passenger traffic. Executives from both carriers have been meeting for over a week concerning a possible merger.
At present, talks appear to be stalled over the value that should be placed on each companys shares in the event of a stock swap deal. The fact that Continental management briefed its board on Wednesday suggests that negotiations remain active. One of the executives close to the talks said the airlines may have a deal to announce by the beginning of next week.
Travel experts believe that these two airlines complement each other particularly well. Uniteds hubs in Chicago and San Francisco would work well with Continentals hubs in the New York City and Houston. Overseas, United has well developed routes in Asia, whereas Continental has a strong network in Europe and Latin America.
Currently United is Americas third biggest carrier, behind Delta Air Lines who is number one and American Airlines. Continental is the countrys fourth largest carrier.
Advocates of airline consolidation argue that bigger U.S. airlines will be more efficient, more competitive with large foreign carriers, and help reduce excess seat capacity.
Consumer advocates counter that typically when airlines merge customers often lose because ultimately there tend to be fewer flights and higher prices.
www.cheapfares.com