Thoughts on the United and Continental merger – as quoted in the press
Last weekend, as United and Continental announced their plans to merge, I was answering a flurry of emails from journalists on quotable quotes about the merger. Some of them made it to leading newspapers like USA Today and FinanceAsia. Thanks to Dan Reed and Ed Russell respectively for the quote.
Though, too often, quotes in the press are either truncated, or lost in translation. Hence, here I share with you many more quotes I had been asked for, and sent out to various press outlets. I think they give a unique insight into the United/Continental merger.
On the brand change to United: Though both brands are globally recognized, I personally would have preferred to see the Continental brand survive, because they’ve done a fantastic job of resurrecting the brand over the years, while United has struggled with its re-branding efforts. As long as the name change doesn’t degrade Continental’s product or service, I think customers would be happy to move on.
On the executive appointments: It’s good for the airline in the long term, that Jeffery Smisek becomes the key executive, because he has a proven record as someone who can improve the airline, and please customers as well as shareholders. Moreover, Glen Tilton had publicly stated that his aim was to successfully lead an exit strategy for United Airlines, which this deal accomplishes. Hence, it’s only natural that he gradually shifts into a non-executive role.
On the HQ move to Chicago: A lot of Continental employees may be forced to move from Houston to Chicago, and many may forgo that option. It will also be difficult to retain the Texas culture at the company, which is cherished internally. There’s hard work ahead for the management in order to please the internal stakeholders.
On the impact on the passenger: Customers are likely to see fares rise on overlapping routes, like Houston to Chicago or Washintong DC. Ancillary fees may increase too, in the long term. Though, the frequent fliers wouldn’t have to worry much, as due to Star Alliance, both United’s and Continental’s frequent flier programs are quite similar now.
On what this means for future airline mergers in the US: The second merger of this scale in 24 months in the US is bound to put pressure on other independent airlines, like American and US Airways. Though, I don’t foresee these two merging, because of the huge overlap in routes. I wouldn’t be surprised if we see mergers in the low-cost arena, like Southwest getting in bed with AirTran, or even American Airlines cozying up further to JetBlue!
On impact on Asia: United already has a strong network in Asia-Pacific, and Continental’s presence in key markets like Japan and India will only make it a strong competitor against rivals like Delta. Though, in order to have any chance of acing against Asian carriers, the new airline will have to drastically up its game in terms of service, product and brand strategy.
So, what do you think about the merger? Would it be beneficial to the flying public? Would the combined airline be able to turn a profit? Let’s discuss in the comments or over on Twitter (@simpliflying)