We still don’t have an official announcement about a merger, but numerous news stories hint that an agreement has been reached and a formal announcement is imminent.
Many in Houston are moaning about losing jobs if the new airline is based in Chicago, but Loren Steffy of the Houston Chronicle puts a nice spin on the changes that will come to Houston and in doing so points out the one potential upside to a merger:
As difficult as it is to accept, if this deal happens, Houston will benefit from having Continental CEO Jeff Smisek and perhaps other members of his executive team running the combined airline, even if they’re doing it from Chicago.
Continental’s management is the envy of the industry. It simply runs a better airline, has better dealings with labor and is more responsive to customers than its United counterpart.
The home team, in other words, offers the best hope of making this deal work, even if it must go on the road. Our city is better off if Smisek runs the airline from Chicago than if United’s management runs it from here.
We lose a headquarters, but, if this plan lives up to its rationale — a big “if” to be sure — we may gain expanded air service and an airline that ultimately thrives and creates jobs. Profitability, which has long eluded the major airlines, is the key for Continental employees to win back some of the concessions they’ve sacrificed over the years.
As much as it hurts our civic pride, if this deal is inevitable, then the best way to keep Continental here may be to let it go.
I don’t think a merger in the interests of consumers and even in the interest of the two airlines. It is in the interest of the fatcats like Glen Tilton who stand to reap a huge profit if a merger occurs. But Steffy’s analysis is good: CO is run well and UA is not. Ideally, the new airline run by Jeff Smisek will finally lead to UA being run correctly.